By Summons filed on 8 May 2019, the Plaintiff, No 1 Victoria Dragons Pty Ltd ("1VD"), seeks a declaration that it is entitled to specific performance of a document described as the "Nomination Deed" and an order, by way of specific performance of that Nomination Deed, that the Defendant, AEN Developments Pty Ltd ("AEN"), direct a firm of solicitors, Thomson Geer, to release from its trust account an amount of $1,419,736 plus GST to 1VD pursuant to cll 2.2 and 24.1 of the Nomination Deed or, alternatively, that AEN pay 1VD that amount. 1VD seeks a further order that AEN pay the amount of $200,000 plus GST to 1VD pursuant to cl 24.7 of the Nomination Deed. 1VD also seeks equitable compensation, damages, interest and costs.
By an Amended Cross-Summons filed on 10 May 2021, AEN seeks a range of relief based on claims for, inter alia, an implied term in the Nomination Deed, rectification, and misleading and deceptive conduct. AEN seeks a declaration that it is entitled to specific performance of the Nomination Deed, on the basis that cll 24.2 and 24.11 did not cease to be enforceable on rescission, and that it was entitled to rescind the Nomination Deed on 6 November 2018 and seek a release and refund of the Final Instalment (as defined in the Nomination Deed) of the Nomination Fee (as defined) under the Nomination Deed. It also seeks a declaration that 1VD was not entitled to raise certain tax invoices and seek payment of the Final Instalment amount, on the basis that 1VD and the Second Cross-Defendant, Mr Coulston, breached the Nomination Deed and failed to perform obligations under it by 26 November 2018. AEN also raises other claims, which I address below.
The basic facts are uncontested and emerge from the parties' pleadings and documentary evidence. At the time of the relevant transactions, the State Environmental Planning Policy No 65 ("SEPP 65") (July 2015) (Ex P2, Vol 2, Tab 1) dealt with the design quality of residential apartment developments and incorporated the "Apartment Design Guide" (17 July 2015) (Ex P2, Vol 2, Tab 2) by reference. The objectives set out in SEPP 65 include, in cl 2(3)(b), "to achieve better built form and aesthetics of buildings and of the streetscapes and the public spaces they define" and, in cl 2(3)(c), "to better satisfy the increasing demand, and changing social and demographic profile of the community, and the needs of the widest range of people from childhood to old age, including those with disabilities". Clause 6A provides that development control plans cannot be inconsistent with the Apartment Design Guide in respect of, inter alia, apartment size and layout. Clause 28 provides for the determination of development applications, which are to take into account, inter alia, the Apartment Design Guide. Schedule 1 sets out design quality principles relating, inter alia, to context and neighbourhood character, built form and scale, amenity, and, in Principle 8, housing diversity and social interaction. That principle provides, inter alia, that:
"Good design achieves a mix of apartment sizes, providing housing choice for different demographics, living needs and household budgets.
Well-designed apartment developments respond to social context by providing housing and facilities to suit the existing and future social mix."
[4]
Affidavit evidence - the applicable principles
Both parties lead evidence of oral conversations, and AEN particularly relies on such conversations for its representational and rectification cases. I should first identify the principles which I should apply in dealing with that evidence. Even apart from the particular difficulties which arose with Mr Yang's and Mr Ngo's evidence, which I address below, I have regard to the fallibility of human memory which increases with the passage of time, particularly where disputes or litigation intervene: Watson v Foxman (1995) 49 NSWLR 315 at 318-319; Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810 at [41]; Varma v Varma [2010] NSWSC 786 at [424]-[425]. I also have regard to the fact that objective evidence, where available, is likely to be the most reliable basis for determining matters of credit that arise as to the affidavit evidence: Armagas Ltd v Mundogas SA [1985] 1 Ll R 1 at 57; Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789 at [10] ("Colorado").
The principles applicable to assessing claims for representations in oral form were also helpfully summarised by Slattery J in Ventouris Enterprises Pty Ltd v Dib Group Pty Ltd [2010] NSWSC 963 at [87] as follows:
"The principal conduct of the defendants that [the plaintiff] alleges was misleading or deceptive was the speaking of words in the course of a series of conversations. Special considerations apply when assessing alleged misleading and deceptive conduct in such a context. It is necessary that the words spoken be proved with a degree of precision sufficient to enable the Court to be reasonably satisfied that they were in fact misleading in proved circumstances: Watson v Foxman (1995) 49 NSWLR 315 at 318 per McLelland CJ in Eq In assessing whether spoken words were misleading the Court may have to examine relatively subtle nuances flowing from the use of one word, a phrase or a grammatical construction rather than another or the presence or absence of some qualifying word, phrase or condition: Watson v Foxman (1995) 49 NSWLR 315 at 31. The fallibility of human memory and the overlaying of memory with perceptions of self interest leading to sub conscious reconstruction are all hazards of ordinary human experience to which a Court must be alert in assessing whether particular spoken words are misleading or deceptive: Watson v Foxman (1995) 49 NSWLR 315 at 319. Ultimately each element of the cause of action must be proved to the reasonable satisfaction of the Court which means that the Court "must feel an actual persuasion of its occurrence or existence". Such satisfaction is "not obtained or established independently of the nature and consequences of the fact or facts to be proved", including the "seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding": Helton v Allen (1940) 63 CLR 691 at 712."
[5]
The evidence led by 1VD
Turning now to the affidavit evidence, 1VD tendered documents to establish its case in chief (Ex P2) and also read, in chief, the affidavit dated 5 March 2021 of Mr Robert Dickson, who has extensive experience as an architect, urban designer and planner and was engaged by 1VD to work on the development. Mr Dickson identified relevant requirements to which he had regard in preparing the development application including the LEP, the Apartment Design Guide and SEPP 65 and the DCP, and referred to the "Housing Choice" objectives and controls in cl 14 of Pt E4 of the DCP.
Mr Dickson outlined the history of the lodgement of the development application with Council on 2 June 2017, the LEC proceedings, the lodgement of the Amended DA on 13 April 2018 and the ASFC filed by Council in the LEC proceedings in response to the Amended DA. His evidence (admitted with a limiting order under s 136 of the Evidence Act 1995 (NSW) as identifying the topic of the discussion) was that, on 8 August 2018, he telephoned Mr Coulston:
"To discuss an idea for further revisions to the amended development application which would see the height of the building being reduced by 2 storeys to meet the height restrictions, but would still deliver the apartment mix required, specifically clause 14 of Part E4 of the DCP Controls, as well as Council's contentions regarding the amenity of the design expressed in the [ASFC]."
Mr Dickson's evidence was that he then advised Mr Coulston that:
"The apartment mix in the Nomination Deed could be satisfied by adjusting the apartments such that there were 15% of one-bedroom apartments, 70% of two-bedroom apartments, 7% of three-bedroom apartments and 18% of another type of apartment which was not specified but could be studio apartments, which is a specific type of apartment sought in the DCP."
Mr Dickson's evidence was that Mr Coulston instructed him to proceed on that basis and he referred to the exchange of amended sketches including studio apartments in the apartment mix.
Mr Dickson then referred to the steps taken which led to the lodgement of the Further Amended DA with Council in early September 2018, which provided a gross floor area of 7,284 sqm consisting of 96 apartments, being 17 studio apartments, 21 one bedroom apartments, 54 two bedroom apartments and 4 three bedroom apartments, comprising 18% studio apartments, 22% one bedroom apartments, 56% two bedroom apartments and 4% three bedroom apartments, and reducing the building height by two floors from 11 to 9 floors. Mr Dickson refers to a further meeting on 5 March 2021 when a representative of Council agreed that the plan was suitable but sought an offset of the building from the side boundary, and to the approval of the Final DA by the orders made by the Land and Environment Court on 23 October 2018.
[6]
Mr Yan's evidence
AEN read affidavits of its director, Mr Yan, and its solicitor, Mr Ngo, in the proceedings, and also sought to read an affidavit of Mr Yan's former personal assistant, Ms Wang, but was not permitted to do so where she was not available for cross-examination. AEN also read, by leave, three late affidavits of Ms Chen. I first address the detail of this evidence, before turning to a wider issue affecting both Mr Yan's and Mr Ngo's evidence.
AEN read Mr Yan's affidavit dated 7 August 2020, and reaffirmed on 1 October 2021, which was lengthy, comprising 376 paragraphs over 63 pages, although Mr Yan had limited personal involvement in the dealings which were in issue. Substantial parts of that affidavit were not admissible and were not admitted; as I will note below, large parts of that affidavit were identical, word for word, with Ms Wang's affidavit dated 7 August 2020 which was not permitted to be read where Ms Wang was not available for cross-examination; and, as I will also note below, other parts of that affidavit were identical to parts of Mr Ngo's affidavit dated 7 August 2020. Mr Yan and Ms Wang made substantially the same errors in substantially the same terms as to what had occurred at several meetings, a matter that I address below, and sought to correct those errors when they became apparent at substantially the same time in substantially the same terms.
Mr Yan's evidence is that he was and is the director and shareholder and the only decision-maker for AEN. Mr Yan referred to being approached about the Kogarah project in August 2016, prior to the incorporation of AEN, through a migration agent known to him, Ms Chen, who was Mr Overton's wife. Mr Yan referred, in an error which also occurred in Ms Wang's affidavit in identical words, to his and Ms Wang attending the Kogarah site in early 2016 and having been introduced to Mr Coulston by Mr Overton and his wife. Mr Yan attributed a lengthy explanation of the project to Mr Coulston, in identical words to those which appeared in Ms Wang's affidavit, and set out his equally lengthy reply, which he says Ms Wang translated for Mr Coulston and Mr Overton as follows:
"I do not want the childcare facility, that has to come out, I want more units, I want no units to be less 50 square metres internally in the project, I want no less than 96 units, so if the childcare facility comes out they can include more units and increase it to 96. I do not want less than 96 units within the development and more 1 bedroom apartments on the upper levels and no unit less than 50 square metres internally. I don't want more than 19, 1-bedroom units that will preserve a greater number for two bedroom and three-bedroom units. This will affect the price, if they can't achieve this their fee is to be paid in instalments, more smaller units mean more construction cost and less sales price, people will not buy them and are harder to sell and banks will not lend on smaller apartments. I don't want any units less than 50 square metres in internal size and no more than 19 units that provide for one bedroom. As I said, this will affect the price if they do not get this. The fee is to be released in stages." (Yan 7.8.20, reaffirmed on 1.10.21, [44])
[7]
Mr Ngo's affidavit evidence
AEN also read two affidavits of its solicitor, Mr Ngo, which dealt with contested factual matters, although he continued to act for AEN in the proceedings. By his first affidavit dated 7 August 2020, Mr Ngo's evidence was initially that he was not involved in any meetings prior to 22 December 2016 (Ngo 7.8.20, [15]), although he subsequently corrected that evidence in his second affidavit. He referred to the instructions which he received from AEN, which I set out in the chronology above, and to his "understanding" that no apartment was to be smaller than 50 square metres (Ngo 7.8.20, [29]) and to the drafting of cl 24.11 of the Nomination Deed. He also addressed events after 22 December 2016 in terms that substantially corresponded to Ms Wang's and Mr Yan's affidavits concerning those events, as I will note below. By his second affidavit dated 1 April 2022, Mr Ngo addressed Mr Coulston's affidavit dated 5 February 2022 and gave evidence, for the first time, that he recalled being present at the meeting at 1VD's solicitors' office on 8 December 2016, although his evidence was that he did not do any interpreting at that meeting and knew little about what was happening, where this was the first occasion on which he was asked to attend a meeting in the matter. Mr Yan also took issue with Mr Coulston's account of a meeting in April 2018 in that affidavit.
Mr Ngo was cross-examined. He accepted that he did not have records of, inter alia, the meetings that he attended in relation to the matter in December 2016, or any telephone conversations he had with Mr Yan in December 2016 about the development site, or the meeting that he attended at the offices of 1VD's solicitors on 8 December 2016, or the dinner at the Golden Century Restaurant on 21 December 2016 (T321, 323). He accepted that his initial recollection, set out in his first affidavit, as to when he first attended meetings in the matter was incorrect (T322). He accepted that he attended the 8 December 2016 meeting at 1VD's solicitors' office, although he did not recall it and had not referred to it in his first and second affidavits (T321), and he had also not referred to the 21 December 2016 dinner meeting in those affidavits (T323). He accepted that he had no record of any written instruction given by Mr Yan that apartments smaller than 50 square metres were to be excluded from the development, although he approached that question in cross-examination in a somewhat argumentative fashion, as follows:
"Q. You understand there's a difference between a document which says there could be one bedroom apartments, not smaller than 50 square metres; two bedroom apartments, not smaller than 70 square metres; and three bedroom apartments, not smaller than 90 square metres, and a document that records that there are not to be any apartments at all smaller than 50 square metres. You see the difference?
A. That - that was part of the oral instructions." (T324)
"Q. Mr Ngo, there are no records of Goh Lawyers from your file concerning the nomination deed from 2016, which record any instruction from Mr Yan to you that there were to be no apartments smaller than 50 square metres in the development. Do you agree?
A. The reason is that there wasn't a need to because it's a straightforward issue.
Q. Mr Ngo, you were agreeing to the proposition I put to you. Correct?
A. I agree but I - as I said, there wasn't a need to because at all times it is a common understanding from all parties that no studio is to be - or no apartment is to be less than 50 square metres." (T327-328)
[8]
Ms Chen's evidence
AEN also read, by leave, two affidavits of Ms Chen dated 30 August 2022 and a third affidavit dated 6 September 2022. In her first affidavit, Ms Chen's evidence was that she introduced Mr Yan to Mr Overton, who was then working as a real estate agent, and attended with Mr Overton and Mr Yan at the Kogarah site at the end of 2016, presumably at the October 2016 meeting to which I have referred above. Ms Chen's evidence is that she also attended a lengthy dinner "meeting" in early December 2016, lasting several hours, at the "Beijing Restaurant". She referred to having observed Mr Coulston and Ms Wang in conversation "regarding" the project at that dinner and that she observed Ms Wang "interpreting things" for Mr Yan, from what Mr Yan was saying in Mandarin and from English to Mandarin. Her evidence was that she "saw nothing wrong" with the interpretations and saw "now [sic] difficulty in the interpreting". Ms Chen also referred to her understanding that Ms Wang had qualifications in English.
Ms Chen disagreed with Mr Coulston's evidence that the first meeting at the restaurant was "casual" and referred to a "casual" meeting later that month at the "Neptune restaurant", which she then corrected in her second affidavit to refer to the Golden Century restaurant. Ms Chen also recalls Mr Yan saying to Ms Wang that he did not want apartments less than 50 square metres in the development application and wanted more larger apartments, and Mr Yan saying he wanted no less than a number (which she does not recall) of apartments in the mix and wanted more 2 and 3 bedroom apartments and that "if you achieve a better result then I will pay you more". Plainly, that statement could only have been made by Mr Yan in Mandarin to Ms Wang, since he does not speak English; Ms Chen then says that she "saw" Ms Wang repeating these things in English to Mr Coulston; and she then refers to other things which she said she heard in the conversation, and recalls reference to one bedroom, two bedroom, and three bedroom apartments in the conversation and the fact that the word "studio" was not mentioned. That evidence is consistent with the evidence given by Mr Yan in cross-examination that there was no consideration of, or reference to, studio apartments at this time, although that evidence is not consistent with Mr Yan's and Ms Wang's affidavit evidence to the contrary.
Ms Chen was cross-examined at some length. I am inclined to think that she was trying to give honest evidence in difficult circumstances, where she has a close relationship with Mr Yan's wife and her husband had a business relationship with Mr Coulston in respect of this transaction. Regrettably, I am also comfortably satisfied that her memory of events is unreliable, although this is understandable where she only agreed to give evidence in the course of the hearing, her evidence was prepared over a short period, and her attempt to recall events of over five years ago was unsuccessful.
[9]
The identical evidence in Mr Yan's, Ms Wang's and Mr Ngo's affidavits
I now turn to a wider issue as to the affidavit evidence. Mr Yan and Ms Wang made the same errors as to several matters in their first affidavits, and corrected them in the same way in their second affidavits, in respect of their incorrect reference in their first affidavits to Mr Coulston having attended the meeting at the Kogarah site in October 2016, and in the absence of reference in their first affidavits to the meeting at Mr Yan's restaurant on 7 December 2016, at 1VD's solicitors' office on 8 December 2016 and at the Golden Century restaurant on 21 December 2016. Large parts of the lengthy affidavits of Mr Yan and Ms Wang were also identical, with only cosmetic changes between corresponding paragraphs.
Since AEN does not accept either the extent or the significance of the now admitted fact of the copying between Ms Wang's affidavit and Mr Yan's affidavit, or vice versa, I set out the corresponding passages (omitting some that are less material) in the table that occupies the next 45 or so pages of this judgment, adopted from Ex P4 and from Ms Wang's affidavit (Ex P5, tendered with a limiting order under s 135 of the Evidence Act as proof of what was said and not proof of the truth of its content). I do so on the basis that this table and the extent of the copying between the two affidavits will demonstrate the nature and significance of this issue more clearly than any evaluative statement by me could do:
Comparison of the affidavits of Mr Yan and Ms Wang dated 7 August 2020
Para Wang affidavit Para Yan affidavit
In discussions with Tim, he said in answer to a question from Mr Yan: In discussions with Tim, I asked Tim what his fees were and Angela interpreted for me what Tim said and Angela said to me.
24 Tim: "You do not have to pay me; I get my commissions from Walt". 38 "You do not have to pay him; he gets his commissions from Watt".
This made me understand that he, Tim was Walt's employee or agent. As I said it was Tim that approached me, I never asked him to do anything
25 From this I understood that he was an agent for Walt 38 This made me understand that he, Tim was Walt's employee or agent.
26 As such it was Tim that approached Mr. Yan and in turn, on behalf of Victoria Dragons and Mr Walt Coulston, not the other way around, as Walt Coulston claims. 39 It was Tim that approached me, on behalf of Victoria Dragons and Walt, not the other way around.
27 As I recall, prior to signing of the Deed, which was dated 22 December 2016, and as I recall was signed on or around that date, we had meet Mr Walt Coulston, at least two times and inspected the project area at least once. 40 As I recall, prior to signing of the Deed, which was dated 22 December 2016, I recall signing on or around that date, meet with Walt, at least two times and inspected the project area once.
31 Mr Coulston, after the formalities and showing us the site area, explained the project. 42 Walt, after the formalities and showing us the site area, explained the project.
I recall at the first meeting Mr Coulston, saying words to the effect:
"There will be a childcare facility within the building, we have provided for a mix of 1-bedroom units, 2-bedroom units and 3-bedroom units only. The 1-bedroom units generally have minimum size of 50 square meters. The 2-bedroom have a general size of 70 meters and the three- bedroom 90 square meters. I have not allowed for any studio apartments their minimum size is 35 square meters, I am 100 per cent certain we can achieve this mix. There will be about 17, 1-bedroom units, 60 plus 2-bedroom and the balance 3 bedrooms and if not, we can reach an agreement between us as to price reduction, if that is not the case. At present we have allowed for 88 apartments in the mix. We are still trying to see if other properties can be included and this will mean a higher and larger building opportunity." I recall at the first meeting Walt, saying a lot of words in English and Angela repeated those words to me in Mandarin therefore understood Walt had said the following in English, in part confirming what Tim had said to me through Lili:
I recall the largest quantity was to be 2-bed room units, then 1-bed room units and then 3-bed room units. I clearly recall the childcare centre being mentioned and studio apartments being mentioned in passing as not being included. I recall the smaller apartments as that was a big issue for Mr Yan as he wanted nothing less than 50 square meters in internal size in the mix, these were my instructions. I also recall Mr Coulston making reference to things such as: "He said, there will be a childcare facility within the building, they have provided for a mix of 1-bedroom units, 2-bedroom units and 3-bedroom units, only no smaller. The 1-bedroom units generally have minimum size of 50 square meters internally. The 2- bedroom have a general size of 70 meters internally and the three- bedroom 90 square meters internally. He has not allowed for anything smaller than 50 square meters so no studio apartments their minimum size is 35 square meters internally. He is certain they can achieve this mix. There will be about 17,1-bedroom units, 60 plus 2-bedroom and the balance 3 bedrooms. At present they have allowed for 88 apartments in the mix all up. They are still trying to see if other properties can be included and this will mean a higher and larger building opportunity."
32 "The area will change soon and the FSR will be 4:1, so any agreement will be conditional on that happening. If what we say we can achieve is not achieved within 18 months of the FSR coming in, then the fee will be less as the fee will be released in instalments, so if we do not achieve what we are saying, then the balance can be refunded, to compensate you for the holding costs and delay." 43 I recall the largest quantity was to be 2-bedroom units, then 1-bedroom units and then 3-bedroom units. I had seen this on the drawings Tim had provided. I recall the reference to studio apartments as that was a big issue for me, as I wanted nothing less than 50 square meters in internal size and wanted to limit the number of 50 square meter apartments so that preserved a larger number of apartments. I also recall Angela saying in Mandarin Walt says:
He also said: "The area will change soon and the FSR will be 4:1, so any agreement will be conditional on that happening. If what he says is not achieved within 18 months of the FSR coming in, then the fee will be less as the fee will be released in instalments, so if they do not achieve what they are saying, then the balance can be refunded. He has allowed for 122 car parking spaces".
"We have allowed for 122 car parking spaces". I recall these things as they were important to me and became the focal point of the negotiations. They were important to me because if things proceeded, I would not only need to pay Walt his fees, which I recall were in excess of $1.5 million all up. I also had to pay $20,000 to have the legal documents prepared. At some point I would also have to buy the land which was $15 million and then arrange for all the construction costs and therefore I wanted to understand what I was buying and also wanted to understand the feasibility of it so at to arrange the transfer of funds to Australia, as I had the cash reserves in China to be able to fund the project, rather than to borrow money in Australia. I recall figures being mentioned and formed the view that the expected profit margin was not large and so the mix of apartments and their certainty was an issue for me.
I recall these things and details clearly, as I translated it to Mr Yan and vice a versa, as he sought clarification and were matters that were an issue for Mr Yan, as they became the focal point of the negotiations that followed. I recall the building size been mentioned and the land size being mentioned. I am also certain of these figures and details as I saw and Mr Yan explained drawings that had been provided by Mr Coulston or Tim, that Mr Yan studied and explained to me and in which I in part translated the English words thereon. I refer to these below and I have used these to refresh my memory as to the events, at these two meetings, before the Deed was signed.
I was to translate for Mr Yan, who instructed me to say the following, which I did after being told in Mandarin. As Mr Yan is not accustom to stopping, I have learned to take everything in overtime. After being told what to say, I repeated it in English and this was the process that unfolded at the two meetings and at other meetings during the period. I then said to Mr Coulston and Tim during the first meeting:
Myself: "Mr Yan does not want the childcare facility, he wants that out he wants more units and no small apartments at all, that is no units is to be less than 50 square meters internally, he wants no less than 96 units so if the childcare facility comes out you can include more units and increase it to 96 using the area you have allowed for the childcare centre. He does not want less than 96 units within the development and more 1-bedroom apartments on the upper levels and no unit less than 50 square meters internally. He does not want more than 19,1-bedroom units in the mix. He says this will have a bearing on the price agreed, if it cannot be achieved. More smaller units mean more construction cost and less sales price, people will not buy them and are harder to sell in his opinion and banks will not lend on smaller apartments. So, he does not want any units less than 50 square meters in internal size and no more than 19 units that provide for one sleeping arrangement and being 50 square meters in internal size and no less. No more than 19 units of these and clearly if more than 22 that will have a bearing on the price to be paid." After Angela said these things to me in Mandarin. I instructed Angela to reply and said to Angela to translate the following to Walt and Tim, which was consistent with my earlier instructions to her:
33 I came to understand that 1-bedroom apartments were not less than 50 square meters internally. I also recall commenting on more car parking spaces also, as that was important for Mr Yan, he wanted 130 car parking spaces. This would mean the 3 and some of the 2-bedroom units would get more than 1 car parking space and hence making it more marketable and having a better price for less construction cost. I translated these details also for Mr Yan, to Walt and Tim, such they would understand the Development Application that Mr Yan had in mind, as the minimum he wanted, from them. I also said as asked by Mr Yan, 44 Me: "I do not want the childcare facility, that has to come out, I want more units, I want no units to be less than 50 square meters internally in the project, I want no less than 96 units, so if the childcare facility comes out they can include more units and increase it to 96. I do not want less than 96 units within the development and more 1-bedroom apartments on the upper levels and no unit less than 50 square meters internally. I don't want more than 19, 1-bedroom units that will preserve a greater number for two bedroom and three-bedroom units. This will affect the price, if they can't achieve this their fee is to be paid in instalments, more smaller units mean more construction cost and less sales price, people will not buy them and are harder to sell and banks will not lend on smaller apartments. I don't want any units less than 50 square meters in internal size and no more than 19 units that provide for one bedroom. As I said, this will affect the price if they do not get this. The fee is to be released in stages."
"This will preserve the mix of the larger apartments, so by having 96 units, and 22 to be no less than 50 square meters, the other 74 will need to be made up of the larger apartments." I knew this already however the things Angela translated and interpreted, confirmed that one-bedroom apartments were not less than 50 square meters internally. So, I was very clear in my instructions, that I did not want any apartments less than 50 square meters internally and no more than 19 units of that size and none less. I also recall being specific about the carpark spaces that I wanted and recall instructing Angela to ask for 130 car parking spaces. This would mean the three and some of the two-bedroom units would get more than one carparking space and that would make it more marketable and having a better price for less construction cost. Once I said these things to Angela, I saw her speak in English to Walt and Tim. I saw them nodding their heads and I saw them write things down. I have no reason to doubt Angela did not translate everything I said. This was later confirmed when I had the documents translated to me. I then saw Walt reply and speak and when he finished Angela said the following to me in Mandarin:
My recollection is that prior to the first meeting I was involved in, Mr Yan had changed his position and did not want childcare centre but rather more units as such I received instruction to that effect and hence why I was instructed to say what I said. I recall that Mr Yan had changed his mind about the child care centre by the time I was involved in the meetings. That is why other written instructions exist that are different to those at pages 5 to 6 of AEN-1.
34 As the meeting continued, Mr Coulston replied: 45 Angela said, Walt said:
"We have the drawings, but we can change them we can exclude the childcare centre and convert that area to more apartments, we will also push for two extra levels and if that works that will increase the nomination fee payable, for every apartment above the 96 and no apartment will be less than 50 square meters internal, that sounds achievable." "We have the drawings, and they can change them as you want, by excluding the childcare centre and convert that area to more apartments, they say they can push for two extra levels and if that works that will increase the nomination fee payable, for every apartment above the 96. They said the studio standard is about 35 square the smallest apartment in meters, and the one bedroom as I have said are about 50 square meters or more, so no apartment will be less than 50 square meters internal, so studios are out, he said for the 19 one bedroom that is not an issue the balance will be two and three bedrooms, that sounds very achievable. All that needs to happen is for the change to 4:1 in the FSR to be approved."
I was instructed to reply for Mr Yan as follows: Once Angela finished, I asked her to reply as follows:
36 "No apartment less than 50 square meters in internal area otherwise he is not interested, and he wants at least 96 apartments no less. He has no issue if you get more, then we can agree on a price per apartment in additional nomination fees, but if you do not get the minimum he wants in apartment number and mix and size, then the nomination fee comes down so it is to be released in stages and refunded if the result is not achieved by the agreed date and mix that he wants." 46 "No apartment less than 50 square meters in internal area otherwise I am not interested, and I want at least 96 apartments no less and of those, not more than 19 one-bedroom apartments. I am happy to pay more and we can agree on a price per apartment in additional unit, but if I do not get the minimum I want, then the nomination fee comes down so it is to be released in stages and refunded if that is not achieved and we need to work out the time period as to when all this needs to be achieved by."
My instructions were from Mr Yan, that he wanted the DA application to be approved to be defined in writing in any agreement that was signed, hence why I was specific as to the number of units he wanted and the mix and specific number within the mix he wanted, as that would have a bearing on the nomination fee to be finally paid.
37 Mr Coulston, then said: 47 I then saw Angela speak and in turn Walt speak, then Angela said and translated to me, what Walt said:
"As I said, we can change the drawings, to meet Mr Yan's needs. The staged release of the nomination fee is generally how it works, we want that, to at least cover some of our costs and time and that part that is released at the start is not refundable, if we do not achieve the agreed results by the due date. The agreed results can be defined in the agreement and they are the minimum but you need to understand that we may need to change some things, so other things other than the minimum that Mr Yan wants, can be changed if we are forced to do that, if we don't achieve the minimum the balance of the nomination fee is either reduced or refunded, depending on the results. That can be defined in the agreement." "He said, the drawings can be changed, to meet your needs. That can easily be done. The nomination fee is released in staged, they need that to cover some of their costs and time and that part that is released is not refundable, if they don't achieve the agreed results by the due date. The agreed results can be defined in the agreement and that's the minimum, some minor things may need to change some if we are forced to do that that has to happen. However, if we don't achieve the minimum, the balance of the nomination fee is either reduced or refunded, depending on the end results."
After translating that, I was then asked to translate for Mr Yan: When Angela translated that to me, I was happy and asked her to translate the following:
38 "Ok, give Mr Yan some drawings to look at and we will talk some more on the minimum Mr Yan wants, that will need to be set out in the agreement." 48 "Ok, tell him to give me the drawings so we can talk more about what I want, and we can then set out the agreement."
The meeting concluded and we left. In this meeting I also recall that the land cost was mentioned at about $18 million and the expected construction cost was more than $30 million as best I recall. The meeting concluded and we left. In this meeting I also recall that the land cost was mentioned at about $15 million and the expected construction cost was at $30 plus million as best I recall.
51 I recall Mr Coulston saying: 57 I then saw Walt speaking some more and when he finished Angela also said to me:
'We can provide for those changes and create a formula, so if there is less than 96 units the nomination fee is reduced for every unit less than 96 and include a clause that likewise increase it for every unit above 96 units and also allows for a staged nomination fee, so it is payable in stages on certain events occurring and if those events do not occur then it is reduced or otherwise refundable if the event is of such importance to Mr Yan, though I need part of it paid on signing so at least to cover some of my costs and cover my expenses and help with cashflow, if the other events do not occur then the other stages are refundable. There will be certain critical dates and sunset dates and if things are not achieved by those dates by Victoria Dragons then the nomination fee will be refundable in full or the balance of the nomination fee will be refunded or reduced depending on what happens. It will be a matter for Mr Yan, if he wants to proceed with the purchase of the properties the subject of the options, but if the things I say are not achieved by the dates set, then the balance of the nomination fee as still not paid at that stage, will be in part refunded or refunded in full, so its payment depends on what is achieved by me by that relevant sunset date. " 'They can provide for these changes and create a formula, so if there is less than 96 units the nomination fee is reduced for every unit less than 96 and include a clause that likewise increase it for every unit above 96 units and also allows for a staged nomination fee, so it is payable in stages on certain events occurring and if those events do not occur then it is reduced or otherwise refundable. As they said they need part of it paid on signing so at least to cover some of their costs and cover expenses and help with cashflow, but if the other events do not occur, the other stages are refundable. We will work out critical dates and sunset dates and if things are not achieved by those dates by Victoria Dragons the nomination fee will be refundable in full or the balance of the nomination fee will be refunded or reduced. So, the balance of the fees and its payment of the fees are dependent on what is achieved by them by the sunset date the solicitor wilt hold it."
After Angela translated that to me, I asked her to say:
52 I translated this to Mr Yan and then was instructed to say: 58 "Ok, tell them to put the proposal in writing and we will agree on the figures and dates and go from there and I want to see the drawings, to ensure they have provided for what we have agreed. So, make sure they understand no childcare centre, no less 96 units, no more than of 19 units of 50 square meters internally the balance 70 square meters and then 90 square meter apartments nothing less than 50 square meters as I have said and 130 car park spaces. I want 2 carpark spaces for the three bed room units and at least 2 for some of the two bed room units. About 70 per cent of the 2 bed-room apartments and the balance to be three-bedroom apartments. If they can guarantee this we can proceed."
"Ok, put the proposal in writing and we will agree on the figures and dates and go from there and provide some drawings, that do not include the childcare centre and provide for 96 units and only the fixed number of 19 units of one sleeping facility that is not less than 50 square meters internally and the car parking of 130 car parking spaces. Mr Yan wants 2 car parking spaces for the three bedroom units and at least 2 for some of the two bedroom units. He wants about 70 per cent of the 2 bedroom apartments and the balance to be three-bedroom apartments. If it is 22 or more in units that are 50 square meters in internal size or any smaller in size, then the price is reduced." I saw Angela speak to Walt and then she said,
'They understand what you want and they say it can be done, they are very confident in getting approval."
At no stage did Mr Coulston, nor Tim, nor anyone else at these meetings, say anything that suggested that Mr Coulston and these others viewed studio apartments any different to one-bedroom apartments. The claims they are making now were never raised nor stated. I viewed them the same they provided for a one sleeping facility. To my understanding they provided for one sleeping facility and were smaller in size and did not know the industry viewed or made a distinction. Anyway I made it clear by saying that: At no time during these meetings did Walt or Tim, nor anyone else with them at these meetings, say anything about studio apartments being any different to one bedroom apartments. I viewed them the same they provided for a one sleeping facility. To my understanding they provided for one sleeping facility and were smaller in size namely 35 square meters and at no time was I told in Australia the industry viewed or made a distinction. I made it clear to Angela and asked he to repeat the following a number of times:
57 "Mr Yan does not want any unit to be less than 50 square metres in the mix and if you cannot guarantee that, Mr Yan is not interested in the project and he only wants 19 of a size of 50 square meters internal and no less." 59 "I don't want any unit to be less than 50 square metres and if you cannot guarantee that, I am not interested in the project".
I did that by repeating the words at paragraph 50 herein, a number of times to ensure Mr Coulston understood what I was saying. He never said anything to make me understand that he viewed studios to be any different to a one bedroom apartment as is now being claimed. Mr Coulston did say also: I recall Angels a number of times, saying:
"I am confident that can be achieved anyway, any more than 19 apartments out of the 96, being 50 square meters internally or less in size, then the final payment is refunded, I will guarantee it that way and the same any less than 96 apartments then I will refund $180,000 per units less than 96 but if more I get more. I would not do this if I did not think it could not be achieved." "Walt says he is confident that can be achieved, anyway, he can guarantee if there is any more that 19 apartments out of the 96, being 50 square meters internally or less in size, then the final payment is refunded, He says he will guarantee it and the same any less than 96 apartments then he will refund $180,000 per units less than 96 but if more he wants more. He says he would not do this if I did not think it could not be achieved."
Again, the agreement proposed was in part as described at the initial two meetings. The plans where not the same date as those provided at the meeting and in fact appeared to pre date those provided at the meeting marked F, though they were marked G and provided for 96 apartments, no studios and no childcare centre, although did not yet provide for the car parking spaces that Mr Yan wanted and they appear to be dated 2015, for some reason. I assumed they were some earlier version that did not include a childcare centre and it was this version that they would continue working on to submit to council once the agreement was executed. The email included construction costs estimates also. The other documents provided confirmed the uncertainty and that was why things would be contingent on the 4:1 FSR being approved and why we agreed to have provision for refunds and reductions should certain things not be achieved. Otherwise I and through me, Mr Yan relied on what Mr Coulston had said in his opinion could be achieved. I recall, as I have said, Mr Walt Coulston saying a number of times; From these documents as received to 22 December 2016, as noted above, as translated and interpreted to me, I had the following understanding, that the agreement was dependent on a change FSR to 4:1 ratio, that once that happened stage 1 and 2 payments were no longer refundable and then it was matter for the development application to be made and approved for what I wanted and then if that was achieved by a certain date the final payment would be released, or otherwise refunded or reduced, dependent on the result, if it was different to what had been defined. This was consistent with what Walt had said a number of times which had been interpreted to me namely:
73 "I am certain that the apartment mix and number we have discussed can be achieved, I think we can do better, that is why I am happy to provide for reductions and refunds, as I am certain these things can be achieved" 78 "I am certain that the apartment mix and number we have discussed and agreed on can be achieved, I think we can do better, that is why I am happy to provide for reductions and refunds, as I am certain these things can be achieved and I want more if we do better."
It was for these reasons and these provisions for price refunds and reductions that I was told by Mr Yan, that he was happy to proceed. It was for these reasons and these provisions for price refunds and reductions, that I said to Angela that I was happy to proceed and I asked Angela to communicate this to Walt.
84 84. Having refreshed my memory from the documents as to dates, I recall that as between 8 December 2016 and 22 December 2016, Clause 24.11 became a very important clause in my mind, both while in China and in Australia. My instructions were to ensure a refund of the final instalment of the nomination deed fee, if the mix as to apartments both as to size and number and mix was not achieved in the development approval by a set date. That clause was where it was finally recorded. While some things were allowed to be changed if the Council expressly sought such changes in writing, and not otherwise, one thing that was preserved, was the number of units that would be less than 50 square meters was to be nil and that those of a size being 50 square meters was not to be more than 19 and this then changed to 22 units as providing for one sleeping facility. This preserved the mix I wanted, as to 50, 70 and 90 square meter apartments, as stated in the documents.
84 Having refreshed my memory from the documents as to dates, I recall that as between 8 December 2016 and 22 December 2016, Clause 24.11 became a very important clause. My instructions were to ensure that the DA that was required to be achieved was to be defined in detail. The aim was to secure a refund of the final instalment of the nomination deed fee, if the mix as to apartments both as to size and number was not achieved in the development approval by the agreed date, especially as the profit margin was small and less than 10 per cent rather than the normal 30 per cent, I understood developers wanted at the time. That clause was where the DA required was defined and finally recorded. While some things were allowed to be changed if the Council expressly sought such changes in writing, and not otherwise, one thing that was preserved, was the number of units that would be less than 50 square meters was to be nil and that those of a size being 50 square was of internal size and not less not to be more than 22 units as providing for one sleeping facility. This preserved the mix we wanted given the number we wanted of 96 and that of these 22 were to be of 50 square meters and not less in internal size. As such I understood that the agreement was to ensure a refund of the final instalment, if the unit number was reduced below 88 units or otherwise reduced by $187,500 for each unit less than 96 units and otherwise was to be totally refunded if the mix included any unit below 50 square meters in internal size or more than 22 units of a size of 50 square meters or less in internal size. As I stated I did not see a distinction between studios and one bedroom units, I saw them as the same and used the sizing to provide instructions to Mr Ngo, consistent with the meetings held with Mr Coulston. and 84. As such I understood that the agreement at the meeting and to be reflected on the documents was to ensure a refund of the final instalment, if the unit number was reduced below 88 units or otherwise reduced by $187,500 for each unit less than 96 units and otherwise was to be totally refunded if the mix included any unit below 50 square meters in internal size or more than 22 units of a size of 50 square meters or less in internal size. As I have stated I did not see a distinction between studios and one bed room units I saw them as the same and used the sizing to provide instructions to Mr Ngo and Angela and nothing had been said on behalf of Walt to suggest that at that time he viewed them differently, as such had never been brought to my attention.
85
Had I been aware that Mr Coulston considered the studios to be different to a one bedroom apartment, as he now appears to claim, I would have advised Mr Yan and I would have also told Mr Ngo to be more specific. As we always talked about size and I saw them as the same and Mr Coulston never said otherwise, I advised Mr Yan accordingly. I would have taken a different position had Mr Coulston or anyone in his team disclosed that they made a distinction as between studio and one bedroom apartments. What I did make clear to Mr Coulston in saying; Had I been aware that Walt considered the studios to be different to a one bedroom apartment, I would have instructed the lawyer to be more specific. As we always talked about size and I saw them as the same and Walt never said otherwise, I saw no need to be more specific I would have taken a different position had Walt or anyone in his team disclosed that they made a distinction as between studio and one bed room apartments. The agreement was, there was not to be any apartments less than 50 square meters in internal size and no more than 22 apartments having the size of 50 square meters internally or less. What I did make clear to Walt during the meeting through Angela by asking for the following to be translated:
87 "Mr Yan does not want any units to be less than 50 square metres and he doesn't want more than 19 apartments which are to be 50 square meters in size internally, if the mix is different, if that happens then he wants to be compensated for the extra construction cost forced on him by getting a refund of the final nomination fee. If we cannot agree on this he is not interested. Mr Yan wants to be compensated for the extra constructions costs there will be more bathrooms, more kitchens, more entry points, more windows and balcony doors." 87 "I do not want any units to be less than 50 square metres and I don't want more than 19 apartments which are to be 50 square meters in size internally. If the mix is different, if that happens then I want to be compensated for the extra construction cost forced on me by getting a refund of the final nomination fee. If we cannot agree on this I am not interested. I want to be compensated for the extra constructions costs there will be more bathrooms, more kitchens, more entry points, more windows and balcony doors and more balconies".
The 19 changed to 22 in the document. As such when instructing Mr Ngo both I and Mr Yan when we were talking to him together made that known to him. We asked for clause 24.11 to be finalised as it appears in the executed document. The documents at pages 115 to 395 of Exhibit 'AEN-1' show how it changed as between 8 and 22 December 2016. I proceeded to advise Mr Yan that if there existed more than 22 apartments of internal size of 50 square meters or less then the final instalment of the nomination fee would be refundable in his discretion and so that would compensate him, if that was forced on the project by council. At no stage did Walt make me understand though Angela that he did not understand that I did not want no more than 19 apartments of the size 50 square meters internally or less or that he viewed studio apartment different to one bedroom apartments for this reason I asked for clause 24.11 to be finalised as it appears in the executed document. The documents at pages 115 to 395 of Exhibit AEN-1 show how it changed as between 8 and 22 December 2016. I understood the agreement was that if there existed more than 22 apartments of internal size of 50 square meters or less then the final instalment of the nomination fee would be refundable in my discretion and so that would compensate me, if that was forced on the project by council. Otherwise Walt could not make any changes unless expressly sought by Council in writing.
88 At no stage did Mr Coulston or anyone from his team say to me that he or they made a distinction as between studio and one bedroom apartments. Had that been the case I would have asked for more details to be included in the document to reflect the agreement that we had as I understood it, at the end of the two meetings., namely no studios, as there was to be no apartment less than 50 square meters and no more than 19 of that size. The 19 changed to 22 in the document. 88 At no stage did Walt or anyone from his team say to me that he made a distinction as between studio and one bedroom apartments. Had that been the case I would have asked for more details to be included in the document to reflect the agreement that we had as I understood it, at the end of the meetings.
89 When I saw clause 24.11 in the form it was to signed and approved, it was my understanding, that Mr Coulston had agreed to what we were asking for in writing, in that, if we were forced to accept in writing, more than 22 units with a size of 50 square meters internally or less and providing for only one sleeping facility then the final instalment would be refunded, otherwise the other changes, if specifically sought in writing by the council then they would be accepted, we could not make an objection, however if not sought in writing, Mr Coulston could not make the changes, as that was a different DA to that agreed. 89 When I saw clause 24.11 in the form it was signed and approved, on 22 December 2016, and as interpreted to me by Frank Ngo and as it had been translated to me previously it was my understanding that Walt had agreed to what we were asking for in writing, in that, if we were forced to accept more than 22 units with a size of 50 square meters internally or less and providing for only one sleeping facility then the final instalment would be refunded, otherwise the other changes, if specifically sought in writing by the council then they would be accepted, we could not make an objection, however if not sought in writing, Walt could not make the changes. This in my mind limited the number of smaller units to 22 and preserving the balance of 74 two - bedroom units and three-bedroom units as we had agreed.
In my reading of the various versions of the Deed, I saw clause 24.11 start and changed a number of times, until it reflected the agreement we had reached in the meetings and that I understood that existed, namely no apartment less than 50 square meters and any apartment providing for one sleeping facility would not be more than 22 apartments in total and that such unit would not be smaller than 50 square meters internally. By having this recorded in the documents, it preserved the mix that Mr Yan wanted namely more of the 2 bedroom units and 3 bedroom units. That arrangement was to ensure Mr Yan was compensated, if he was forced to build more smaller apartments as that would mean more construction costs as it would increase the numbers of kitchens, bathroom, balconies, window and entry doors. As I have stated and made this very clear to Walt a number of times during the meetings, by saying: As the various versions of the nomination Deed, were translate or interpreted to me either by Angela or Frank Ngo I saw clause 24.11 start and changed a number of times, until it reflected the agreement we had reached in the meetings and that I understood that existed, namely no studios or any apartment less than 50 square meters and any apartment providing for one sleeping facility would not be more than 22 apartments in total and that such unit would not be smaller than 50 square meters internally. By having this recorded in the documents, it preserved the mix that I wanted namely more
"Mr Yan wants to limit the number of units that are 50 square meters to 19 and he wants no units to be less than 50 square meters because if that happens and there are a large number of smaller units there will be a need to build more kitchens, more bathrooms, more entry points, windows and balcony doors and balconies. So, if that is forced on him, he wants to be compensated by having the final instalment refunded. " 2-bedroom units and 3-bedroom units. That arrangement was to ensure that I would be compensated, if I was forced to build more smaller apartments as that would mean more construction costs as it would increase the numbers of kitchens, bathroom, balconies, windows and entry doors balcony door and balconies. As I have stated and made this very clear to Walt a number of times by asking Angel to translate for me:
90 To which Mr Walt Coulston replied a number of times: 90 "I want to limit the number of units that are 50 square meters to 19 and I want no units to be less than 50 square meters internally because if that happens and there are a large number of smaller units there will be a need to build more kitchens, more bathrooms, more entry points, windows and balcony doors. So, if that is forced on him, I want to be compensated by having the final instalment refunded in full. "
"I understand I have no issue in including it as I am confident what Mr Yan wants is achievable. To which I was told Walt replied a number of times;
"I understand I have no issue in including it as I am confident what Mr Yan wants is achievable as you can see I have not included any in the drawings."
From the meeting and from having the documents translated to me to 22 December I understood that the document provided for the following, before I signed it:
From reading it and having it had explained my understand and Mr Yan's understanding, as explained to me by him and as he discussed it with Mr Ngo, was that the document provided for the following, before he signed: a. That the Deed was conditional on the change in FSR to 4:1. If that did not change by at least 31 December 2018, then no fee at all was due and it will all be refunded to me;
a. That the Deed was conditional on the change in FSR to 4:1. If that did not change by at least 31 December 2018, then no fee at all was due and it will all be refunded including the purchase price of the properties; b. That otherwise once that took place the $300,000 and the $550,000 was no longer recoverable and was to be released in full to Walt;
97 b. That otherwise once that took place the $300,000 and the $550,000 was no longer recoverable and was to be released in full; 93 c. That from the date FRS changed Walt had 18 months after that date to make a development application and obtain an approval as defined, and if that was not achieved the final instalment would be refunded in fall.
c. That if by 18 months after the government announcement as to the FSR change to 4:1, the development application had not been approved at all by that date, then the balance of the fee was refundable, otherwise that if there was less than 96 units then the balance of the fee would be reduced by the stated formula in the document and if there were more than 22 units providing for just a single sleeping facility and of a size of 50 square metres internally or less than 50 square meters, namely, thereby changing the mix as agreed, then the balance of the fee would be refundable. d. If by the 18 months or before that date the development approval had less than 96 units then the final instalment would be reduced and refunded by the stated formula in the document, such that if it reverted back to 88 units I was to expect a full refund of the final instalment and that otherwise I would receive a refund of the full amount of the final instalment if there were more than 22 units providing for just a single sleeping facility and of a size of 50 square metres internally or less than 50 square meters, namely, then the balance of the fee would be refundable if that eventuated, as the mix I wanted had not been preserved, namely 74 of the larger apartments especially the 70 square meter apartments providing for two separate bed rooms.
e. That otherwise what was provided in clause 24:11 defined the development approval that was to be obtained and could only be changed by Walt if expressly sought in writing by the council and that if one of those things was the existence of more than 22 apartments of a size 50 square meters internally or less, namely more than 22 smaller apartments, then the final instalment would be refunded in full as that would change the mix I wanted and we had agreed on. Also, if there was less that 96 apartment it would be reduced as stated in the agreement and refunded.
f. This in my mind limited the apartment guide, as it defined the mix, that needed to be achieved, had that not occurred then the DA obtained was different to that as defined. This was my understanding and this was the agreement we had during the meeting otherwise I would have not proceeded.
98 These things were consistent with what we discussed at the meeting and the figures nominated were acceptable to Mr Yan and he signed, from what I saw during discussions. As I was not in Sydney after 9 December 2016, my continued involvement was over the phone and via email. 94 These things as interpreted to me and translated to me were consistent with what we discussed at the meeting and the figures nominated were acceptable to me and I signed.
I understood from my instructions, that these were Mr Yan's minimum requirements. If these were not achieved, then the potential sales revenue would be less. I recall saying at the meetings with Mr Coulston and in giving instructions to Mr Ngo. These were my minimum requirements. If these were not achieved, then the potential sales revenue would be less. I recall saying and asking to be translated at the meetings with Walt and in giving instructions to my lawyer:
99 "Mr Yan says that his construction costs will be higher if he has to build more smaller apartments, there will be more entry doors, more windows and more fire proofing and sound proofing walls, more kitchens and bathrooms more balconies and balcony doors, his construction costs will increase and the sales revenue will not compensate for this, that is why he does not want any apartments smaller than 50 square meters, he wants a fixed number of one bedroom apartments and more larger apartments in the mix, as this will make them more marketable in his opinion. If that does not happen, he wants in the contract a provision that gives him back the final instalment in his discretion." 95 "My construction costs will be higher if he has to build more smaller apartments, there will be more entry doors, more windows and more fire proofing and sound proofing walls, more kitchens and bathrooms, balcony doors and balconies this will increase my construction costs and the sales revenue will not compensate for this. Smaller apartments are harder to sell and the bank won't lend any money, that is why I do not want any apartments smaller than 50 square meters, and those of 50 square meter are to be limited allowing for larger apartments in the mix, as this will make them more marketable in my opinion. If that does not happen, I want in the contract a provision that gives me back the final instalment.
When I said this, this is when Mr Coulston said, what I state at paragraph 50 herein and throughout. I was told that Walt agreed to this.
From my involvement in the discussions with Mr Coulston, it was my understanding that the final document as signed, as it appears at pages 4 to 32 of 'WC-l', provided for the following, that is an understanding that I explained to Mr Yan at the meetings and at the time of the documents being negotiated, in Mandarin, namely: The document that I signed as it appears at pages 4 to 32 of 'WC-1', provided for the following, as I understood and explained to me by Angela and Frank Ngo, namely:
a. That the whole of the Deed was conditional, in that, on or before the Gazettal Sunset Date, which was not to be extended beyond 5 p.m. on 31 December 2018, that the Gazettal event was to occur; a. That the whole of the Deed was conditional, in that, on or before the Gazettal Sunset Date, which was not to be extended beyond 5 p.m. on 31 December 2018, that the Gazettal event was to occur;
b. The Gazettal Event required one of the relevant government authorities, Gazetting a Floor to Space Ratio of 4:1 for the Kogarah Local Environmental Plan; b. The Gazettal Event required one of the relevant government authorities, Gazetting a Floor to Space Ratio of 4:1 for the Kogarah Local Environmental Plan;
c. In the event of such Gazettal event occurring before the required date then the Deed ceased being conditional, otherwise the whole of the Nomination Fee would be refundable if not achieved by 31 December 2018; c. In the event of such Gazettal event occurring before the required date then the Deed ceased being conditional, otherwise the whole of the Nomination Fee would be refundable if not achieved by 31 December 2018;
d. That otherwise the Nomination Fee stopped being refundable, and treated as payable in stages, namely $300,000 on the effective date of signing, $550,000, 30 days after being advised of the Gazettal Event having occurred; d. That otherwise the Nomination Fee stopped being refundable, and treated as payable in stages, namely $300,000 on the effective date of signing, $550,000, 30 days after being advised of the Gazettal Event having occurred;
101 e. The balance of the nomination fee of $1,419,736, was due and payable if the Development Application as defined in the Deed was Approved on or before the DA Sunset Date; 97 e. The balance of the nomination fee of $1,419,736, was due and payable if the Development Application as defined in the Deed was Approved on or before the DA Sunset Date;
f. The Development Application was defined at clause 1.1,24 and 25 of the Deed; f. The Development Application was defined at clause 1.1,24 and 25 of the Deed;
g. The DA Sunset Date was to be calculated as 18 months from publication of the Gazettal Event; g. The DA Sunset Date was to be calculated as 18 months from publication of the Gazettal Event;
h. If the Development Application, Approved was different to that as defined and/or not obtained on or before the DA Sunset Date then, the whole of the balance of the Nomination Fee was refundable, or otherwise reduced or in fact increased as provided for in the Nomination Deed and the agreed costs of $200,000 were not otherwise recoverable. h. If the Development Application, Approved was different to that as defined and/or not obtained on or before the DA Sunset Date then, the whole of the balance of the Nomination Fee was refundable, or otherwise reduced or in fact increased as provided for in the Nomination Deed and the agreed costs of $200,000 were not otherwise recoverable.
i. By having no small apartments, and only 22 one bedroom apartments, then the ratio for the other 74 apartments was preserved, out of the 96 apartments that were the number required." i. By having no studios, and only 22 one bed room apartments, then the ratio for the other 74 apartments was preserved.
This was my understanding and an understanding I explained to Mr Yan in Mandarin.
102 As such, I do not agree with Mr Coulston at paragraph 8, of his affidavit, that the Deed was as simple as he has stated and the discussions involved a lot more than that and the document provides for a lot more than he states, as I have stated above. 98 As such, I do not agree with Walt Coulston at paragraph 8, of his affidavit that the Deed was as simple as he has stated and the discussions involved a lot more than that and the document provides for a lot more than he states.
112 As to paragraph 6, I was aware of these documents as they had been disclosed, otherwise these had all been put in place by Mr Coulston long before we meet him and they were mentioned at the meetings and the documents were provided. As I stated, Mr Coulston also said; 100 As to paragraph 6, I was aware of these documents as they had been disclosed, otherwise these had all been put in place by Mr Walt Coulston long before we meet him and they were mentioned at the meetings and the documents were provided. These documents were translated or interpreted to me. I recall being told Walt also said:
"I am trying to buy other properties next door and if that is the case that may allow for a larger development such that would mean a higher nomination fee". "I am trying to buy other properties next door and if that is the case that may allow for a larger development such that would mean a higher nomination fee".
113 As such based on the discussions and the documents as I read them and had them explained to me, the agreement was not as Mr Coulston states it was at paragraph 8, of his affidavit, it was a lot more than that orally and in writing I say. 101 As such based on the discussions and the documents as translated and interpreted to me, the agreement was not as Mr Walt Coulston states it was at paragraph 8, of his affidavit, it was a lot more than that orally and in writing, I say.
As such I understood from the agreement that AEN signed that as a minimum, Victoria Dragons entitlements and obligations were as follows, and this understanding guided me in what I said to Mr Yan and what instructions I received as to the management of the Nomination Deed and the Development Application process, as between 22 December 2016 and to November 2018, in addition to ongoing instructions from Mr Yan, namely: As such I understood from the agreement as interpreted and translated to me I signed on behalf of AEN that as a minimum, Victoria Dragons entitlements and obligations were as follows, and this understanding guided the instructions I provided Angela as to the management of the Nomination Deed and the Development Application process, as between 22 December 2016 and to November 2018:
a. That if the FSR was changed to 4:1 then from that date Victoria Dragons would be entitled to retain and be paid $850,000 of the total nomination fee, that is the first two instalments; a. That if the FSR was changed to 4:1 then from that date Victoria Dragons would be entitled to retain and be paid $850,000 of the total nomination fee, that is the first two instalments;
116 b. That for Victoria Dragons to be entitle to the balance of $1,419,736 being the final instalment of the nomination fee and a further $200,000, it needed to produce and submit a development application and prosecute and obtain a development approval as defined in the Nomination Deed, on or before the DA Sunset Date, if that was not achieved, then the full amount of the final instalment was refundable to AEN and no further $200,000 was payable; 102 b. That for Victoria Dragons to be entitle to the balance of $1,419,736 being the final instalment of the nomination fee and a further $200,000, it needed to produce and submit a development application and prosecute and obtain a development approval as defined in the Nomination Deed, on or before the DA Sun Set Date, if that was not achieved, then the full amount of the final instalment was refundable to AEN and no further $200,000 was payable;
c. That the minimum that Victoria Dragons needed to achieve, by the Sunset Date was a development approval with 96 units and if that was not achieved then the final instalment would be reduced by an agreed formula per unit less than 96 units; c. That the minimum that Victoria Dragons needed to achieve, by the Sun Set Date was a development approval with 96 units and if that was not achieved then the final instalment would be reduced by an agreed formula per unit less than 96 units;
d. That the further minimum that Victoria Dragons needed to achieve by the DA Sunset Date, was an apartment mix and size and car parking facility number as defined at clause 24.11 and such could only be changed if in fact such was sought in writing by council and further if the result was that the approval contained any apartment less than 50 square metres in internal size or otherwise more than 22 apartments that were 50 square meters or less internally and that provided for a one sleeping facility be they described as studio or one bedroom, then the full amount of the final instalment would be refunded in the discretion of AEN and that the $200,000 was not payable; d. That the further minimum that Victoria Dragons needed to achieve by the DA Sun Set Date, was an apartment mix and size and car parking facility number as defined at clause 24.11 and such could only be changed if in fact such was sought in writing by council and further if the result was that the approval contained any apartment less than 50 square metres in internal size or otherwise more than 22 apartments that were 50 square meters or less internally and that provided for a one sleeping facility be they described as studio or one bedroom, then the full amount of the final instalment would be refunded in the discretion of AEN and that the $200,000 was not payable;
e. I also understood from what I was told, that given that there was to be no more than 22 units of a size of 50 square meters or less and in fact none less than 50 square meters then the ratio as between 2 and 3 bedroom apartments would be maintained and as such there was no need to be specific about that ratio as it was in part guaranteed that 74 apartments in total would be of 2 and 3 bedroom apartments. Had I been told that studios were viewed differently I would also have provided specific instructions in the written documents about the 2 and 3 bedroom apartments also, by ensuring that there was to be only 22 apartments providing for a single sleeping facility and being 50 square meters and no less. e. I also understood from what I was told, that given that there was to be no more than 22 units of a size of 50 square meters or less and in fact none less than 50 square meters then the ratio as between 2 and 3 bedroom apartments would be maintained and as such there was no need to be specific about that ratio as it was in part guaranteed that 74 apartments in total would be of 2 and 3 bedroom apartments. Had I been told that studios were viewed differently I would also have provided specific instructions in the written documents about the 2 and 3 bed room apartments also.
117 I say this was my understanding of the agreement as that is what I asked for in English of Mr Coulston and as I have stated he agreed and further that is what found its way into the written document as between 8 December 2016 and 22 December 2016. As I stated had Mr Coulston never stated he made a distinction as between studios and one bedroom apartments, I would have used that term in providing instructions to Mr Frank Ngo, rather I used the size to ensure no studios were to be included in preserving the refund of the final instalment amount. 103 I say this was my understanding of the agreement as that is what I asked for Angela to translate in English to Walt and I was told he agreed and further that is what exist in the document. As I stated had Walt ever stated he made a distinction as between studios and one bed room apartments, I would have used that term in providing instructions to Mr Frank Ngo, rather I used the size to ensure no studios were to be included in preserving the refund of the final instalment amount.
121 It was for this reason I was instructed by Mr Yan to say at the negotiation meetings those things that I have stated herein above. 106 It was for this reason I instructed Angela to say the things I have stated at the negotiation meetings herein, as it had within it examples of the mix and as I saw it had also 35 square meter apartments I ensured that I did not want anything less than 50 square meters and a limited number of those.
122 I was aware that studio apartments were 35 square meters and less than 50 square meters, in the industry. Mr Yan did not want any single sleeping facility that was to be less than 50 square meters internally. Had I ever been told by Walt that he saw studios as different to a one bed room apartment I would have used that term however as I saw them the same so I used the size to make a distinction, in excluding studios from the mix. 107 I was aware that studio apartments were 35 square meters and less than 50 square meters, in the industry. I did not want any single sleeping facility that was to be less than 50 square meters as means of preserving 74 apartments larger than 50 square meters. Otherwise I saw them as the same as a one bed room apartment just even smaller.
I was very clear on this point in my instructions and that is why I asked Angela to repeat it a number of times to Walt and he never disagreed:
Mr Yan was very clear on this point in my instructions and that is why I repeated it a number of times to Mr Coulston and he never disagreed. In in fact stated; "Tell him no small apartments nothing less than 50 square meters and only 19 of the 50 square meter apartments the balance 70 mainly and 90 square meters."
123 "That is achievable I am confident so much so we can include a provision for a refund if that happens." 108 To which he replied a number of times:
"That is achievable I am confident so much so we can include a provision for a refund if that happens."
That is why I also recorded this in written instructions as to the mix I wanted and other key points.
125 I understood that while Mr Coulston, could change the drawings if requested in writing by the council specifically, if the end result was different to what was defined, then he would not get the final instalment or otherwise it would be reduced depending on the result, and in that way, Mr Yan could be compensated as would be AEN, for any extra construction costs forced on them. 109 I understood that while Walt, could change the drawings if requested in writing by the council specifically, if the end result was different to what was defined, then he would not get the final instalment or otherwise it would be reduced depending on the result, and in that way, I could be compensated, for any extra construction costs forced on me.
133 As I explain and expand below as between 22 December 2016 and about mid-August 2018, I and hence we at AEN had no notice that Mr Coulston was doing anything other than what he had agreed to do. As such there was just no need to complain or in fact do anything other than wait, as we did to see if what Victoria Dragons and Walt Coulston claimed they could achieve was in fact achieved before the due date or on it. 123 As I explained and expand further below, as between 22 December 2016 and about mid-August 2018, we had no notice that Mr Walt Coulston was doing anything other than what he had agreed to do. As such there was just no need to complain or in fact do anything. I had seen documents and drawings which to mid-August 2018 showed he was doing all the things he had agreed to do in the Deed, namely he had lodged a development application and was perusing it, such as to obtain a development approval as defined in the Deed. To mid-August 2018 he had said nothing, rather at all times orally at meetings with my staff and through documents and drawings showed me that he was perusing the development as defined in the Deed and the one he claimed was very achievable.
I say that Mr Coulston, from when problems started to emerge and were made known on or about mid-August 2018, he was and always told at meetings and was on notice that; I was told by Angela that the following was said to Walt on 9 August 2018:
135 "You need to prosecute the development approval we agreed on, if you do not achieve that by the due date or you achieve something different to what we agreed on, then the $200,000 is not payable and we will rely on the Deed to get a refund of the final instalment." 129 "You need to prosecute the development approval we agreed on if you do not achieve that by the due date or you achieve something different to what we agreed on, then the $200,000 is not payable and we will rely on the Deed to get a refund of the final instalment."
I said this a number of times at least at two or more meetings in August and October 2018, at which was present Mr Coulston, some of his people, Mr Ngo, Mr Yan's wife at one of those meetings and Mr Charles Huang at one of these also. I was informed this was repeated a number of times. I understood Walt understood this when after 14 August 2018, he started writing back, the way he did. I understood his letters as between 14 August 2018 and late September 2018, as a reverse in position back to the Deed. As such I say Walt was on notice as to what my position was. He either produced a development approval with 96 apartments and with no more 22 apartments of a size of 50 square meters and no less internally thereby preserving the mix we had agreed on and that there be 130 car parking spaces. That if this was not the result that the final instalment would be refunded.
136 I say that Mr Coulston was always told both in writing and orally at meetings, that we would not accept anything different to what we had agreed on and would rescind if the end result was different to the minimum we had agreed on and defined in writing, therefore I say that the claims that Mr Coulston makes that we never responded are not true. There was a response on 14 August 2018 in writing and further oral complaints in August and October 2018 once we had notice that Mr Coulston was prosecuting a DA which was different to what we had agreed. Otherwise before mid-August 2018, there was no need to complain or raise objection, as AEN and those at AEN had no notice that Mr Coulston and Victoria Dragons was doing anything different, to what it had agreed to do, as I set out below by reference to all the documents that had been received that gave no notice until post mid-August 2018. 130 I say that Mr Walt Coulston was always told both in writing and orally at meetings, from 9 August 2018 onwards, that I would not accept anything different to what we had agreed on and would rescind if the end result was different to the minimum we had agreed on. I say that the claim that Walt makes that we never responded are not true. There was a response on 9 August 2018 at a meeting, that I was told of and further in writing on 14 August 2018 and further oral demand in September 2018 and October 2018, that I have been told off. These were carried out through my staff Angela, my wife and Frank Ngo. These were my instructions.
137 Mr Walt Coulston, makes reference to a development application and drawings at paragraph 18 to 21, but does not include a copy of the drawings as lodged at that time on 2 June 2017. I note while we were to be provided with a copy of the drawings before they were lodged, that in fact did not occur. 131 Walt, makes reference to a development application and drawings at paragraph 18 to 21, but does not include a copy of the drawings as lodged at that time on 2 June 2017. I note while we were to be provided with a copy of the drawings before they were lodged, that in fact did not occur.
138 Mr Coulston, states that the development application was prepared in accordance with Clause 24.11. However, has not included the drawings to enable the court to conclude that for itself nor has he included any of the other drawings to October 2018. I do so, in my exhibited material, to show that the end result was very different to what we had agreed as a minimum and to also show that it was not until mid -August 2018 and more specifically late September 2018 that we had notice, that he was prosecuting a development application differently to what we had agreed, before that date all the documents showed he was prosecuting a DA as in fact defined at clause 24.11 of the Nomination Deed as such there was no need to complain before that date. 132 Walt, states that the development application was prepared in accordance with Clause 24.11. However, he has not included the drawings. I do so, in my exhibited material, to show that the end result was very different to what we had agreed as a minimum and to also show that it was not until mid -August 2018 and more specifically September 2018 that he was prosecuting a development application differently to what we had agreed on and I was not on notice of this until then and I did complain, once on notice.
139 It is my understanding, that Clause 24.11 not only defines the Development Application that must be lodged, it also defines the Development Approval that must be achieved on or before the DA Sunset Date. As time progressed the DA Sunset date crystallised as 26 November 2018, as I have stated. 133 It is my understanding, that Clause 24.11 not only defines the Development Application that must be lodged, it also defines the Development Approval, that must be achieved on or before the DA Sunset Date. As time progressed the DA Sun set date crystallised as 26 November 2018.
140 As I have stated my understanding was that based on the discussions we had at the two meetings and as provided for in the Deed Mr Coulston and Victoria Dragons, had agreed that notwithstanding a right to use the Apartment Design Guide and accept changes sought by the council specifically in writing, if the Development Approval by the DA Sunset date included more than 22 apartments of 50 square meters in internal size or less, that provided for one sleeping facility, then the final instalment amount would be refundable in the discretion of AEN in full. 134 As I have stated my understanding was that based on the discussions we had at the meetings and as provided for in the Deed, Walt and Victoria Dragons, had agreed that notwithstanding a right to use the Apartment Design Guide as a guide, and accept changes sought by the council specifically in writing, if the Development Approval by the DA Sunset date included more than 22 apartments of 50 square meters in internal size or less, that provided for one sleeping facility, and thereby bring about a change to the mix as provided for in the Deed of the larger apartments, then the final instalment amount would be refundable, in the discretion of AEN and myself in full. As such it was my choice to accept what was the end result and hence have the benefit of the drawings or not if it was substantially different to what had been provided for in the Deed.
142 The Deed also provided that AEN was assured, at least 67 two-bedroom apartments, and no less than 7 three bedroom apartments and no more than 22 one bedroom apartments of the total of 96 apartments and 130 car parking spaces. These numbers could only be changed if council sought such changes in writing and in so far such changes were sought in writing that notwithstanding that, if the DA approved included any apartment less than 50 square meters or more than 22 apartments of 50 square meters or less than the final instalment would be refundable, if AEN made such an election. 136 The Deed also provided that AEN was assured, at least 67 two-bedroom apartments, and no less that 7 three bedroom apartments, by preserving the number at no less than 96 apartments and no more than 22 one bed room apartments of the total of 96 apartments and 130 car parking spaces. These numbers could only be changed if council sought such changes in writing and in so far such changes were sought in writing, that notwithstanding that, if the DA approved included any apartment less than 50 square meters internally in size or more than 22 apartments of 50 square meters or less, than the final instalment would be refundable if I made such an election.
144 The Development Approval in fact finally submitted and agreed on, provided for 17 studios of 35 square meters in size, 21 one bedroom apartments of 50 square meters in size, 54 two bedroom apartments and 4 three bedroom apartments. This mix is very different to the mix provided for at clause 24.11 of the Deed. To date I have seen no writing from Council that sough such a mix. The effect of this was that we now have 38 apartments of a size of 50 square meters or less and as a result a lot less 2 and 3 bed room apartments of a size of 70 and 90 square meters respectively. 138 The Development Approval in fact finally submitted and agreed on, provided for 17 studios of 35 square meters in size, 21 one bedroom apartments of 50 square meters in size, 54 two bedroom apartments and 4 three bedroom apartments. This mix is very different to the mix provided for at clause 24.11 of the Deed. To date I have seen no writing from Council that sough such a mix. The effect of this was that we now have 38 apartments of a size of 50 square meters or less and as a result a lot less 2 and 3 bed room apartments of a size of 70 and 90 square meters respectively. studios as I asked Angela to state many times during the negotiations, "No apartments less than 50 square meters." This was said, such as to exclude studios and any other size less than 50 square meters in internal size as I wanted no apartments less than 50 square meters. Had he said otherwise I just would have walked away and looked for other projects. In fact the Deed says that there is to be no apartment less than 50 square meters in internal size.
146 By including 17 studio apartments, which AEN never agreed to, the number of two bedroom apartments lost was 13 and the number of three bedroom apartments lost was 3. This was never a design mix that was discussed, nor promised nor agreed to. By ensuring the minimum number of units that were to be no smaller than 50 square meters at 22 apartments, I was of the understanding that the balance had to be 74 having a mix as between 2 and 3 bedroom apartments as provided in the Deed and as such there was no need to be more specific. Had Mr Coulston said that studios need to be included they cannot be avoided, the price agreed would have been different or in fact Mr Yan would have walked away as he said he would. By reason of such a result AEN is now forced to have 17 extra kitchens, bathrooms, entry doors, windows and balcony and balcony doors and incur more cost on sound proofing and fire proofing. This was very different to the DA provided for at clause 24.11. 140 By including 17 studio apartments, which AEN never agreed to, the number of two bedroom apartments lost was 13 and the number of three bedroom apartments lost was 3. This was never a design mix that was discussed nor promised nor agreed to. By ensuring the minimum number of units that were to be no smaller than 50 square meters at 22 apartments, I was of the understanding that the balance had to be 74 having a mix as between 2 and 3 bedroom apartments as provided in the Deed and as such there was no need to be more specific, as there was not to be any less than 50 square meters. Had Walt Coulston said that studios need to be included they cannot be avoided, the price agreed would have been different or I would have walked away. Regardless to date I have seen no document from the council asking for the inclusion of 17 studio apartments. All I have seen is in the drawings he lost two levels and as such could never deliver 96 apartments of the type agreed as such has included 17 studios and no claims that are different to one bed room apartment. However I never saw them different and Walt never said otherwise and regardless say that the mix was to have no more than 22 apartments of a size of 50 square meters in internal size or less. The DA in fact has 38 of such apartments.
147 By providing the Deed as it was at pages 4 to 32 of "WC-1", I understood that Mr Coulston had agreed over and above his oral agreement, to there being no studios that is no apartments less than 50 square meters in size internally and only 22 apartments of providing for a single sleeping facility of 50 square meters and not less in internal size, then the other ratios for the 2 bedroom apartments of 67 and 3 bed room apartments of 7 would be maintained or near enough preserved. 141 By providing the Deed as it was at pages 4 to 32 of "WC-1", I understood that Walt had agreed over and above his oral agreement, to there being no studios that is no apartments less than 50 square meters in size internally and only 22 apartments of providing for a single sleeping facility of 50 square meters and not less in internal size, as such the other ratios for the 2 bedroom apartments of 67 and 3 bedroom apartments of 7 would be maintained or near enough preserved.
148 As I have stated to date of this affidavit, I have seen no writing from Council that sought the changes to the apartment mix and car parking number as in fact provided for, the development approval agreed to by Victoria Dragons is very different to what Mr Coulston said he would prosecute and he said was achievable. 142 As I have stated to date of this affidavit, I have seen no writing from council that sought the changes to the apartment mix and car parking number as in fact provided for, the development approval agreed to by Victoria Dragons is very different to what Walt said he would prosecute and he said was achievable and that in fact produced. To date I have received no real explanation why as between September 2018 and October 2018 the position Walt took and accepted, was very different to that that existed pre 22 December 2016 and to August 2018.
151 I, learned and received notice that the FSR 4:1 had been announced on 26 May 2017. Page 396 to 410 of Exhibit 'AEN-1' has that notice as provided by Victoria Dragons. As such the DA Sun Set Date became 26 November 2018. 145 I learned and received notice that the FSR 4:1 had been announced on 29 May 2017. Located at Page 399 to 410 of 'AEN-1' has that notice as provided by Victoria Dragons. As such the DA Sun Set Date became 26 November 2018
152 It was on that date that the $300,000 was no longer refundable and that the $550,000 became due and payable, being the first two instalments of the nomination fee. They were paid. As such AEN did what was required of it following such notice, namely paid the required fees and waited and allowed Victoria Dragons to do what it had agreed to do. 146 It was on that date that the $300,000 was no longer refundable and that the $550,000 became due and payable, being the first two instalments of the nomination fee. They were paid, I authorised this.
153 Based on that, I calculated that the DA Sunset Date was 26 November 2018 and that was the date we at AEN were waiting for. I 147 Based on that I calculated that the DA Sunset Date was 26 November 2018 and that was the date we were waiting for and instructed Angela to manage that.
154 It was based on these events, that we and AEN including Mr Yan, understood that Victoria Dragon had to 26 November 2018, to give notice of a Development Approval as defined at clause 24.11, before it could claim the final instalment and seek the costs reimbursement agreed and capped at $200,000. 148 It was based on these events, that we at AEN including I, understood that Victoria Dragon had to 26 November 2018, to give notice of a Development Approval as defined at clause 24.11, before it could claim the final instalment and seek the costs reimbursement agreed and capped at $200,000.
156 By reason of this right as it was at clause 24.11, AEN was protected and would be compensated if the Development Approval achieved was different to that as defined. 150 By reason of this right as it was at clause 24.11, AEN was protected and would be compensated if the Development Approval was different to that as defined.
170 During the meetings Mr Coulston identified himself as, " / have been an architect for many years, I am well versed with Kogarah Council and the changes expected and the minimum Mr Yan is asking for is in fact achievable once the changes are made to the FSR as discussed". 158 During the meetings Walt Coulston identified himself as an architect. One of the things Angela said in her interpreting, "He said he has been an architect for many years, and he knows the area and the Council well. The changes expected and the minimum you are asking for is achievable once the changes are made to the FSR."
In fact, during the negotiation meetings in December 2016, at all times Coulston stated: Also, during the negotiation meetings in 2016, I was also told that Walt said the following:
"What I have done and what you are asking for is quite achievable and in line with what the council and government have put in place and are putting in place, I see no problem. My team know what they are doing. I know what I am doing." "What I have done and what you are asking for is quite achievable and in line with what the council and government have put in place and are putting in place, I see no problem. My team know what they are doing. I know what I am doing."
171 I replied as instructed by Mr Yan: 160 I told Angela to reply as follows:
"While we understand a little of the development industry we have never dealt with this Council before and this will be our first big project in Australia of this type, so we will be relying on you as to the Development Application, we don't want to proceed and then find out that only a fraction of what you are saying is achieved. We do not want to waste time and money, as the expected margin is very tight and we have relied on what you are saying to budget so if the apartment number and mix is not achieved the price of the nomination needs to come done and that needs to be provided for in the Deed." "While we understand a little of the development industry in Australia we have never dealt with this council before and this will be our first big project in Australia of this type, so we will be relying on you as to the Development Application, we don't want to proceed and then find out that only a fraction of what you are saying is achieved. We do not want to waste time and money."
Mr Coulston replied; I was told Walt replied;
"Rest assured l am guaranteeing this personally, I have done this many times, the plans and drawings are in line with all the things that the council and land and environment authorities have put in place and are putting in place. I have another project with council as well. They want the area developed to make room for more accommodation. There is no reason why we cannot achieve what I have done and what Mr Yan wants. In any event we have defined the minimum, so if it's not achieved you will pay a reduced fee or get a refund and I have included, if we do better through the later amendments we can do then, the fee will be more it's in my interest to fight and get what we want. As I said no more than 19 apartments of 50 square meters internally and none less than that size so the mix is preserved, if I put that in the agreement you are protected." "Rest assured I am guaranteeing this personally, I have done this many times, the plans and drawings are in line with all the things that the council and land and environment authorities have put in place and are putting in place. I have another project with council as well. They want the area developed to make room for more accommodation. There is no reason why we cannot achieve what I have done and what Mr Yan wants. In any event we have defined the minimum so if it's not achieved you will pay a reduced fee or get a refund and I will included, if we do better through the later amendments we can do then, the fee will be more its in my interest to fight and get what we want. As I said no more than 19 apartments of 50 square meters internally and none less than that size so the mix is preserved if I put that in the agreement you are protected."
177 At no stage did Mr Coulston advise that there would be a need to go to Court, to fight for approval though he did say in passing, "Worse case if need be, we can go to court and fight It will just take a bit longer and we have 18 months to achieve it from the Gazette date". 168 At no stage did Walt advise that there would be a need to go to Court, to fight for approval though he did say in passing I recall Angela also mentioning, "He also said, worse case if need be, we can go to court and fight. It will just take a bit longer and we have 18 months to achieve it from the Gazette date". If I had been told that within a month of filing, we would need to go to court, I would not have proceeded.
179 This was of concern as the option deed dates were due to expire in about August 2017, being 9 weeks after the Gazetted event having been given notice of. 170 This was of concern as the option deed dates were due to expire in about August 2017, or being 9 weeks after the Gazetted event having been given notice of.
183 As between January 2017 and August 2017, in addition to releasing $850,000 to Victoria Dragons, under the Nomination Deed, AEN also paid $15,730,262 for the land and reimbursed Victoria Dragons $149,000 in option fees. AEN would not had done so if Mr Coulston had not guaranteed that the development application as defined in the Deed was achievable. 174 As between January 2017 and August 2017, in addition to releasing $850,000 to Victoria Dragons, under the Nomination Deed, AEN also paid $15,730,262 for the land and also reimbursed the option fees of $149,000. It would not had done so if Walt Coulston had not guaranteed that the development application as defined in the Deed was achievable, nor had AEN known there was a need to go to court and nor had the car parking number had been explained as now understood.
186 At no stage did Mr Couslton [sic] or his lawyers communicate a need to go to Court with Council. The first time we had notice of going to court was on or about 18 July 2017, when Mr Frank Ngo was sent an email by Mr Coulston. Prior to that it was never stated that such was in fact necessary or needed to be done. 176 At no stage did Walt or his lawyers communicate a need to go to Court with Council. The first time we had notice of going to court was on or about 18 July 2017, when Mr Frank Ngo was sent an email by Walt Coulston. Prior to that it was never stated that such was in fact necessary. I was informed of this at the time. By that stage I was already committed and had paid a substantial sum of money.
188 A copy of the document making reference to a need to go to court was sent for the first time on 18 July 2018, after AEN was made to do all those things as referenced at paragraph 183 herein, a copy of that email is at pages 492 to 497 of Exhibit 'AEN-l'. This was after the time and need to exercise the options and otherwise provide notices under the Deed and after a need to deal with the options. 178 A copy of the document making reference to a need to go to court was sent for the first time on 18 July 2018, after AEN was made to do all those things as referenced at paragraph 177 herein, a copy of that email is at pages 492 to 497 of 'AEN-1' This was after the time and need to exercise the options and otherwise provide notices under the Deed and after a need to deal with the options.
During later discussions with Mr Coulston, the need to go to court was described as During latter discussions I was told by Angela that Walt, described the need to go to court as:
189 "We are going to court to speed things up and get council to agree, it just makes the process faster rather than waiting. It is normal and nothing to worry about" 179 'We are going to court to speed things up and get council to agree, it just makes the process faster rather than waiting, it is normal and nothing to worry about"
We relied on this in not making a complaint. I relied on this and raised no complaint not expecting that by August 2018 nothing had been done as yet and so we waited.
190 As the obligation to prepare, approve and prosecute the Development Application as defined at clause 24.11 was Victoria Dragon's obligations and we were relying on it, so we waited. 180 As the obligation to prepare, approve and prosecute the Development application as defined at clause 24.11 was Victoria Dragon's obligations and we were relying on it, so we waited.
192 Mr Yan and I and AEN were not aware of this fact until Mr Frank Ngo received an email, disclosing such on 18 July 2017. During discussions with Mr Coulston it was at first explained as stated at paragraph 189 herein. 182 I and AEN were not aware of this fact until Mr Frank Ngo received an email, disclosing such on 18 July 2017. During discussions with Walt it was at first explained as stated at paragraph 179 herein, after the Deed was signed.
193 As to that date, I had no notice of such nor did Mr Yan nor did AEN. This was after the need to exercise the options arose and there had been no explanation why the Development Application was delayed to 2 June 2017, in circumstance drawings already existed as far back as 2015, as I now understand it and as at 2016, at least and all that was required was a need to include the changes that Mr Yan wanted and as agreed in the Nomination Deed and in circumstance that the 4:1 change was gazetted on 26 May 2017,1 assume that was the only delay 183 As to that date, I had no notice of such nor did AEN. This was after the need to exercise the options arose and there had been no explanation why the Development Application was delayed to 2 June 2017, in circumstance drawings already existed as far back as 2015, as I now understand it and as at 2016, at least and all that was required was a need to include the changes that I wanted and as agreed in the Nomination Deed and in circumstance that the 4:1 change was gazetted on.
197 I understood, from the material that Victoria Dragons would now be prosecuting the matter and that those costs had already been paid for, as part of the $850,000. Otherwise it would be further reimbursed and compensated for, if they achieved the Development Approval as defined in clause 24.11, in a caped amount of $200,000, otherwise, Victoria Dragons would need to settle for the $300,000 and the $550,000 already received. 185 I understood from the material that Victoria Dragons would now be prosecuting the matter and that those costs had already been paid for, as part of the $850,000. Otherwise it would be further reimbursed and compensated for, if they achieved the Development Approval as defined in clause 24.11, in a caped amount of $200,000, otherwise, Victoria Dragons would need to settle for the $300,000 and the $550,000 already received.
205 I took these emails to mean, that Victoria Dragons, was confident that they would be successful in agreeing with Council or prosecuting the Development Application as lodge and as agreed at clause 24.11 by 26 November 2018. There was nothing in the documents about studio apartments or there being more than 22 1-bedroom apartments or providing for one sleeping arrangement or there being any unit less than 50 square meters. Had there being I would have made complaint for and on behalf of AEN, as would of Mr Yan. As there was nothing to suggest that the Development Approval could not be achieved, at least as defined, we waited. While Mr Coulston complained he was spending money, it had nothing to do with AEN, AEN had paid the $850,000 and it had paid the final amount into trust and as such, it was a matter for Victoria Dragons to carry out its obligations on my understanding. 191 I took these emails to mean once translated, that Victoria Dragons was still confident that they would be successful in agreeing with Council or prosecuting the development application as lodged and as agreed at clause 24.11 by 26 November 2018. There was nothing in the documents about studio apartments or there being more than 22 1-bedroom apartments or providing for one sleeping arrangement or there being any unit less than 50 square meters. Had there being I would have made complaint for and on behalf of AEN. As there was nothing to suggest that the Development Approval could not be achieved at least as defined we waited. While Walt complained he was spending money, it had nothing to do with AEN, it had paid the $850,000 and had paid the final amount into trust and as such it was a matter for Victoria Dragons to carry out its obligations on my understanding.
206 As there was still more than 12 months, to 26 November 2018, we waited for news and in fact the Deed obliged us to do so, as I understood it. 192 As there was still more than 12 months, to 26 November 2018, we waited for news and in fact the Deed obliged us to do so, as I understood it.
210 In fact, as at that time Mr Coulston included a document that I understood was a legal opinion. I read it and it made me understand as best I could that the prospects were good. In any event the Deed did not say we needed to approve any further costs or ask Victoria Dragons to stop, as it was a matter for Victoria Dragons to continue prosecuting the matter. So, we waited. 196 In fact, as at that time Mr Walt Coulston included a document that I understood was a legal opinion. It had been translated to me and it made me understand as best I could that the prospects were good. In any event the Deed did not say we needed to approve any further costs or ask to stop, as it was a matter for Victoria Dragons to continue prosecuting the matter. So, we waited.
260 On 25 February 2017, through Frank Ngo a further email was sent by Mr Coulston. Having the benefit of that email I now recall that was the first time a reference to carparking was made and it was explained in that way. Had Mr Coulston explained this at the start I would have informed Mr Yan that the car parking was always an issue as anything above 105 carparking spaces would impact on the number of units and asked for clause 24.11 to be further restrictive. As clause 24.11 was drafted as it was, we waited to see. At pages 523 of Exhibit 'AEN-1' is a copy of that email dated 25 February 2017. 232 On 25 February 2017, through Frank Ngo a further email was sent by Walt. Having the benefit of that email I now recall that was the first time a reference to carparking was made and it was explained in that way. Had Walt explained this at the start I would have understood that the carparking was always an issue as anything above 105 carparking spaces would impact on the number of units and asked for clause 24.11 to be further restrictive or just walk away. As clause 24.11 was drafted as it was, we waited to see. At page 523 of 'AEN-l' is a copy of that email dated 25 February 2017.
261 As to the matters stated at paragraphs 32 to 36, of Walt Coulston's affidavit these were not known to AEN as they were occurring. Regardless these were matters that Victoria Dragons had agreed to do and was in fact obliged to do, in achieving a Development Application as defined in the Deed at clause 24.11 before the DA Sunset date of 26 November 2018, such as to be able to claim the final instalment of the nomination fee and the agreed costs reimbursement of $200,000, as I understood it at the time. 233 As to the matters stated at paragraphs 32 to 36, these were not known to AEN or I as they were occurring. Regardless these were matters that Victoria Dragons had agreed to do and was in fact obliged to do, in achieving a development application as defined in the Deed at clause 24.11 before the DA sun set date of 26 November 2018, such as to be able to claim the final instalment of the nomination fee and the agreed costs reimbursement of $200,000, as I understood it at the time.
262 These claims came to our attention when Mr Coulston provided a copy of the documents as they appear at pages 281 to 301 of Exhibit 'WC-17 to Frank Ngo on 26 May 2018. Again, I do not know why these were sent to Frank Ngo. When this document was received described as ASoFC was sent to Frank Ngo it came to our attention also. I understood from this document that Victoria Dragons was prosecuting the Development Application as promised. I understood that Victoria Dragons was prosecuting the Development Application and if a Development Approval was not obtained by 26 November 2018, Victoria Dragons would not be entitled to make a claim for the final instalment nor seek a reimbursement for the $200,000. 234 These claims came to my attention when Walt provided a copy of the documents as they appear at pages 281 to 301 of Exhibit 'WC-l' to Frank Ngo on 26 May 2016. Again, I do not know why these were sent to Frank Ngo. When this document was received described as ASoFC was sent to Frank Ngo it came to our attention also. I understood from this document once translated that Victoria Dragons was prosecuting the development application as promised. I understood that Victoria Dragons was prosecuting the development application and if a development approval was not obtained by 26 November 2018. Victoria Dragons would not be entitled to make a claim for the final instalment nor seek a reimbursement for the $200,000.
263 As such there was no need for Mr Ngo to reply to the 26 May 2018, email as it communicated to me that Victoria Dragons were doing what they agreed to do namely to prosecute a DA in line with Clause 24:11. At least that was my understanding and understanding I communicated to Mr Yan. As such we waited. 235 As such there was no need for Mr Ngo to reply to the 26 May 2018, email as it communicated to me that Victoria Dragons were doing what they agreed to do namely to prosecute a DA in line with Clause 24:11. As such instructed Angela that there was no need to reply.
264 The documents referred to at pages 274 to 280 of exhibit 'WC-1' were not provided in the email of 26 May 2018 and the first time that I have seen them has been in this affidavit. Though I am not certain now they may have been provided in emails dated 18 April 2018 and 23 April 2018.1 may have not kept hard copies and now cannot open those links. 236 The documents referred to at pages 274 to 280 of exhibit 'WC-1' were not provided in the email of 26 May 2018 and the first time that I have seen them has been in this affidavit. Though I am not certain now they may have been provided in emails dated 18 April 2018 and 23 April 2018. Angela may have not kept hard copies and now cannot open those links.
265 Further at paragraph 35, Mr Coulston talks about amended plans, no amended plans or amended application was provided on 26 May 2018, nor have any such amended plans or development applications as amended dated 28 April 2018, been made available to date. 237 Further at paragraph 35, Walt talks about amended plans, no amended plans or amended application was provided on 26 May 2018, nor have any such amended plans or development applications as amended dated 28 April 2018, been made available to date. They have not been included in WC-1 by Walt.
266 Having now inspected the documents as they are pages 274 to 280 of Exhibit 'WC-l', I understand that the plans spoken of at paragraph 35, were marked version Q and R, respectively dated 10 April and 17 April 2018, respectively. I now can no longer open the drop boxes of the emails dated 18 and 23 April 2018, although I think these documents and plans were provided with those emails. I now cannot open those drop boxes. At pages 524 of Exhibit 'AEN-1' are copies of those emails. I do recall inspecting those documents and nothing about them put me and therefore Mr Yan through me, on notice that, any changes were being made that would impact on clause 24.11 other than the carparking. 238 Having now inspected the documents as they are pages 274 to 280 of Exhibit 'WC-1', I understand that the plans spoken of at paragraph 35, were marked version Q and R, respectively dated 10 April and 17 April 2018, respectively. I now can no longer open the drop boxes of the emails dated 18 and 23 April 2018, although I think these documents and plans were provided with those emails. I now cannot open those drop boxes. At pages 525 to 574 of 'AEN-1' are copies of those emails. I do recall inspecting those documents with the translating assistance of Angela and nothing about them put me, on notice that, any changes were being made that would impact on clause 24.11 other than the carparking.
I was asked to say: My instructions for the meeting for Angela was as follows:
"Mr Yan says that you were not very clear about the carparking spaces. You never said that if we wanted more than 105 carparking spaces then it would reduce the units. You knew Mr Yan wanted 130 carparking spaces. You promised we could get that and also get 96 units. The documents you are providing now and the things you are saying now, are very different to what you said when we were negotiating the agreement. Mr Yan would have included a clause that if the carparking space was less than 130 then the final fee would be refundable also or at the very least reduced. He wants you to prosecute and get the 96 units with the agreed mix and sizes nothing different to this and at least 2 carparking spaces for each of the three bed room units at least 104 if not more. He is not happy." "Tell him he was not very clear about the carparking spaces. He never said that if we wanted more than 105 carparking spaces then it would reduce the units. He knew I wanted 130 carparking spaces. He promised we could get that and also get 96 units. The documents he is providing now and the things he saying now, are very different to what he said when we were negotiating the agreement. I would have included a clause that if the carparking space was less than 130 then the final fee would be refundable also or at the very least reduced. Tell him I want him to prosecute and get the 96 units with the agreed mix and sizes, nothing different to this and at least 2 carparking spaces for each of the three bed room units at least 105 if not more. He is not happy."
269 Walt replied: 240 I am told Walt replied as follows:
"We are prosecuting the matter and still think we can get the 96 units as defined and if not 130 at least near enough to 130 in carparking spaces." "We are prosecuting the matter and still think we can get the 130 units as defined and if not 130 at least near enough to 130 in carparking spaces."
I had instructions to say: I had instructed Angela to also say:
"You need to go and prosecute; Mr Yan will not release any funds unless you get the 96 units as defined and in the agreed mix and size and at least 104 car spaces he wants more but at least that." "He needs to go and prosecute; I will not release any funds unless we get the 96 units as defined and in the agreed mix as defined and at least 105 units he wants more but at least that."
270 Otherwise Mr Coulston produced no documents from Council that specifically made reference to carparking spaces for this project nor any document from Council that the 96 units in the agreed mix and size could not be achieved or that they specifically asked be changed. 241 Otherwise to my knowledge Walt produced no documents from council that specifically made reference to carparking spaces for this project nor any document from council that the 96 units in the agreed mix and size could not be achieved or that they specifically asked be changed.
272 As such we waited for news as the court hearing was expected in July 2018, as I understood from what we had been told. 243 As such we waited for news as the court hearing was expected in July 2018, as I understood from what we had been told.
273 Following a number of requests since January 2020, finally on 20 April 2020 and 19 May 2020, Victoria Dragons through its solicitors provided a number of versions of drawings they included versions J and K, as I have referred to above. They also included versions R, in the disclosure made 20 April 2018 and 19 May 2020. I have inspected a version marked R. It is dated 17 April 2018.1 believe this is the version provided with the email dated 18 April 2018, or it could have been Q, which is dated 10 April 2018. 244 Following a number of requests since January 2020, finally on 20 April 2020 and 19 May 2020, Victoria Dragons through its Lawyers provided a number of versions of drawings they included versions J and K, as I have referred to above. They also included versions R, in the disclosure made 20 April 2018 and 19 May 2020. I have inspected a version marked R. It is dated 17 April 2018.1 believe this is the version provided with the email dated 18 April 2018, or it could have been Q, which is dated 10 April 2018.
Given at the meeting in April Mr Coulston stated: Given at the meeting I was told Walt stated:
275 "After the DA is approved, we can seek changes and these changes we can increase the car parking spaces back to 130 or near enough as the Council becomes more flexible" 246 "After the DA is approved, we can seek changes and these changes we can increase the car parking spaces back to 130 dr near enough as the council becomes more flexible."
I was instructed to wait and we waited to see what the hearing would produce. Mr Yan had clause 24.11 which assured him a return of the final fee if the things agreed at clause 24.11 were not the achieved result. He told me this and so we waited. I instructed Angela to wait and we waited to see what the hearing would produce.
276 By the end of June 2018, nothing had been said and no documents had been provided that suggested that studio apartments were to be included as such nothing existed that put me on notice that there was a need to include studio apartments in the apartment mix. The only thing that was referenced was the carparking, to date I have not seen any council documents in writing requesting that the carparking facility be reduced to 105 from 130 or in fact 81 as they were in Version R nor had I seen anything about the apartment mix or numbers, that suggested what was stated at caluse [sic] 24.11 was not being prosecuted and pursued by Victoria Dragons and Walt. 247 By the end of June 2018, nothing had been said and no documents had been provided that suggested that studio apartments were to be included as such nothing existed that put me on notice that there was a need to include studio apartments in the apartment mix. The only thing that was referenced was the carparking, to date I have not seen any council documents in writing requesting that the carparking facility be reduced to 105 from 130 or in fact 81 as they were in Version R nor had I seen anything about the apartment mix or numbers.
277 I knew that we could not make a complaint about the carparking if sought in writing. Whilst no writing was provided to us and I have seen none to date, I accepted Mr Coulston that it was sought in writing by the Council. To date none has been provided and he has not included any such document in his exhibits, I also relied on what he said that this could later be changed through further applications. 248 I knew that we could not make a complaint about the carparking if sought in writing. Whilst no writing was provided to us and I have seen none to date, I accepted Walt that it was sought in writing by the council. To date none has been provided and he has not included any such document in his exhibits. I also relied on what he said that this could later be changed through further applications.
278 While Mr Coulston states at paragraph 38, that Frank Ngo did not respond there was no reason why Frank Ngo should have responded, namely he was not an agent of AEN in this respect, in any event the documents that I inspected and the April 2018 meeting gave no rise to respond as the material suggested to me that Victoria Dragons were prosecuting the Development Application as defined at clause 24.11 plus we had the assurances of Mr Coulston at the meeting that the carparking would be prosecuted as would the Development Application and that it was achievable. So there was a response made at the meeting, as I have stated. 249 While Walt states at paragraph 38, that Frank Ngo did not respond there was no reason why Frank Ngo should have responded, namely he was not an agent of AEN in this respect, in any event the documents that I inspected and the meeting gave no rise to respond as the material suggested to me that Victoria Dragons were prosecuting the development application as defined at clause 24.11 plus we had the assurances of Walt at the meeting that the carparking would be prosecuted as would the Development Application and that it was achievable.
282 There was a concern as to the parking space proposed reduction which meant that only 1 of the two-bedroom apartments may have 2 carparking spaces, given the reduction from 130 to 105. This confirmed what we had discussed at the meeting and hence assumed that Mr Coulston was prosecuting the 24.11 DA with the only change being the carparking space down to 105. While Mr Yan was not happy about this, he did not wish to litigate for being misled and as the Deed was worded the way it was, we waited and relied on what Mr Coulston said; 252 There was a concern as to the parking space proposed reduction which meant that only 1 of the two-bedroom apartments may have 2 carparking spaces, given the reduction from 130 to 105. This confirmed what had been discussed at the meeting as reported to me and hence understood that Walt was prosecuting the 24.11 DA with the only change being the carparking space down to 105. While I was not happy about this, I did not wish to litigate and as the Deed was worded the way it was, we waited and relied on what Walt said;
'We can do variations later and increase the carparking space back to 130 or near enough." "We can do variations later and increase the carparking space back to 130 or near enough."
285 As such given the meeting, the drawings as provided, namely version R and/or Q and the things said by Mr Coulston and that the email showed he was at least prosecuting 105 carpark spaces and the apartment mix as provided for at Clause 24:11, as we had discussed, we waited, there was no need for I, nor Mr Frank Ngo to reply we waited. The 26 May 2018, email at least showed Walt was prosecuting the matter as he had stated he would in the meeting and as provided for at clause 24:11 of the Nomination Deed. 255 As such given the meeting, the drawings as provided version R and/or Q and the things said by Walt and that the email showed he was at least prosecuting 105 carpark spaces and the apartment mix as provided for at Clause 24:11, as we had discussed we waited, there was no need for I, nor Mr Frank Ngo to reply we waited. The 26 May 2018, email at least showed he was prosecuting the matter as he had stated he would in the meetings and as provided for at clause 24:11.
286 To date I have not seen any letter from Council that suggested or stated that the car parking had to be reduced to 105 from 130. Clause 24.11 states that any change, as to what is provided for in clause 24.11, needs to be expressly stated for in writing by the Council. All I have seen is policy statements, no document specific to the project. 256 To date I have not seen any letter from Council that suggested or stated that the car parking had to be reduced to 105 from 130. Clause 24.11 states that any change, as to what is provided for in clause 24.11, needs to be expressly stated for in writing by the Council. All I have seen is policy statements, no document specific to the project
290 I note Mr Coulston in his affidavit has not exhibited any drawings only makes reference to them. He has not included any of the version of the drawings as I knew existed. 257 I note Mr Walt Coulston in his affidavit has not exhibited any drawings only makes reference to them. He has not included any of the version of the drawings as I now understand exists.
291 My solicitor has requested these and some were provided on 28 April 2020, and others were provided on 19 May 2020. 258 The solicitor has requested these and some were provided on 28 April 2020, and others were provided on 19 May 2020.
292 The ones provided on 28 April 2020, included versions Q, R, U, and V. I have seen I think Q and/or R, that I comment on further below. It was either Q and/or R that was provided on 18 April 2018, as I have stated. I recall seeing a very large document and such as I have stated it was Q and/or R, that were sent or both. These were the once that were available, when we meet in April 2018. 259 The ones provided on 28 April 2020, included versions Q, R, U, and V. I have seen Q and/or R, that I comment on further below. It was either Q and/or R that was provided on 18 April 2018, as I have stated. I recall seeing a very large document and such as I have stated it was Q and/or R, that were sent. These were the once that were available, when the meeting took place in April 2018.
293 Version Q is marked issued for LEC and is dated 10 April 2018, R is likewise marked and dated 17 April 2018 and believe these to be those filed on or about 20 April 2018. A copy of Q is at pages 575 to 931 of Exhibit 'AEN-1'. 260 Version Q is marked issued for LEC and is dated 10 April 2018, R is likewise marked and dated 17 April 2018 and believe these to be those filed on or about 20 April 2018. A copy of Q is at pages 575 to 931 of 'AEN-1'.
294 As such these drawings filed on or about 20 April 2018, are in keeping with my understanding that the Development Application but for the carparking was as agreed at clause 24.11 and as such there was nothing to complain about over and above what was said at the meeting. I was instructed by Mr Yan, that he did not want to litigate given what was said at the meeting in April 2018. So, we waited for the hearing in July 2018. 261 As such these drawings filed on or about 20 April 2018, are in keeping with my understanding that the development application but for the carparking was as agreed at clause 24.11 and as such there was nothing to complain about over and above what was said at the meeting. I instructed that he did not want to litigate given what was said at the meeting in April 2018. So, I waited for the hearing in July 2018.
295 As at 27 April 2018, when we got the 26 April 2018, email sent to us I understood from the things said by Mr Coulston that Council wanted the car parking reduced to 105.1 since realised that in fact Council did not say that at all and to date, I have not seen anything in writing from Council making such a request or demand, as required by clause 24.11. 262 As at 27 April 2018, when we got the 26 April 2018, email sent to us I understood from the things said by Walt that Council wanted the car parking reduced to 105. I since realised that in fact Council did not say that at all and to date, I have not seen any thing in writing from Council making such a request or demand, as required by clause 24.11.
296 I also note that the drawings provided on 28 April 2020, in fact show that the drawings as lodged reduced the carparking down to 81 down from 130 as agreed. To date I have not seen anything in writing from Council that entitled Victoria Dragons to agree to or make such change. 263 I also note that the drawings provided on 28 April 2020, in fact show that the drawings as lodged reduced the carparking down to 96 down from 130 as agreed. To date I have not seen anything in writing from Council that entitled Victoria Dragons to agree to or make such change.
297 When reviewing the letter email of 26 May 2018, Mr Yan and I also had in mind the email of 16 May 2018, in which Mr Coulston again communicated his obligations and understanding of clause 24.11 as to the minimum required as I understood his email and that this would be one of the other things address before or at the hearing on 2 and 3 July 2018, and as such we waited. 264 When reviewing the letter email of 26 May 2018, as translated for me, I also had in mind the email of 16 May 2018, in which Walt again communicated his obligations and understanding of clause 24.11 as to the minimum required as I understood his email and that this would be one of the other things address before or at the hearing on 2 and 3 July 2018, and as such I instructed that we wait.
298 We relied on the two emails of 16 and 26 May 2018 and those sent on 18 and 23 April 2018 and all the documents attached, and waited for 2nd and 3rd July 2018 and otherwise understood that Victoria Dragons and Mr Coulston were doing what they was required to do and required no input from us. 265 I relied on the two emails of 16 and 26 May 2018 and those sent on 18 and 23 April 2018 and all the documents attached, and waited for 2nd and 3rd July 2018 and otherwise understood that Victoria Dragons and Walt were doing what they was required to do and required no input from us.
299 The email of 16 May 2018, was sent to Frank Ngo and I do not know why but he passed it on and we relied on it and waited. 266 The email of 16 May 2018, was sent to Frank Ngo and I do not know why but he passed it on and we relied on it and waited.
301 The email of 16 May 2018, really made me understand that Mr Coulston was prosecuting the Development Application as we had defined and agreed, which repeated what he said at the meeting in April 2018. 268 The email of 16 May 2018, really made me understand that Walt was prosecuting the development application as we had defined and agreed, which repeated what he said at the meeting in April 2018, as reported to me by Angela
302 I have also since refreshed my memory and recall that we in fact meet with Mr Coulston on 26 April 2018, in Frank's office. The meeting included Frank and I, I cannot now if it was this meeting that Mr Yan's wife also attended. I recall at the meeting being told that Victoria Dragons was prosecuting the development application as defined. 269 I have also since refreshed my memory and recall that Angela in fact meet with Mr Walt on 26 April 2018, in Frank's office. The meeting included Frank, Angela and Walt from the reports back to me. I recall from the reports being told by Angela that Victoria Dragons was prosecuting the development application as defined.
303 I recall the carparking being an issue but otherwise Victoria Dragons would continue to prosecute to achieve the minimum that we require and also make reference to another development in Kogarah and therefore I left that meeting with confidence, that what we wanted would be achieved. I communicated this to Mr Yan's wife and Mr Yan and we waited. 270 I recall the carparking being an issue but otherwise Victoria Dragons would continue to prosecute to achieve the minimum that we require and also make reference to another development in Kogarah and therefore after that meeting and the reports, I left confidence, that what we wanted would be achieved.
304 The meeting on 26 April 2018, the emails of 18, 23,28 April and 16 May 2018 and 26 May 2018, clearly made me understand that Walt knew that AEN wanted as a minimum 96 apartments, with a set agreement in respect of unit mix and sizing and that was the agreement. The agreed terms of units were not changeable and as defined at clause 24.11. 271 The meeting, emails of 18, 23, 28 April and 16 May 2018 and 26 May 2018, clearly made me understand that Walt knew that AEN wanted as a minimum 96 apartments, with a set agreement in respect of unit mix and sizing and that was the agreement. The agreed terms of units were not changeable and as defined at clause 24.11.
305 I recall that the childcare facility was raised again and I recall that Mr Yan asked me to communicate that he would consider it, provided it did not reduce the 96 apartments in unit mix and sizing and would achieve also the 130 car parking spaces. I did this at the meeting. It was never raised again by Walt. I 272 I recall from reports that the childcare facility was raised again and I recall that I instructed Angela to say, "I would consider it, provided it did not reduce the 96 apartments in unit mix and sizing I wanted and as agreed and would achieve also the 130 car parking spaces". It was never raised again by Walt.
I communicated this to Mr Coulston in the following terms at the meeting: I also asked Angela to tell him, at the meeting when she attended:
306 "You keep on talking about the childcare, Mr Yan does not want a childcare facility, however if he still gets his 96 units both as to size and mix as per clause 24:11 and provided that he gets 130 carpark spaces he will consider the child care facility but not otherwise." 273 'You keep on talking about the childcare, Mr Yan does not want a childcare facility, however if he still gets his 96 units both as to size and mix as per clause 24:11 and provided that he gets 130 carpark spaces he will consider the child care facility but not otherwise."
During this meeting gain I repeated; During this meeting gain I asked Angela to repeat;
"No apartments less than 50 square meters internally in the mix as we agreed". "No apartments less than 50 square meters in the mix as we agreed".
309 As such the matters Mr Coulston talks about at paragraphs 32 to 37 are part of the things expected of him and no need to reply arose as nothing was said other than for the carparking issue. That was addressed at the meeting, as such nothing arose that involved or required any input from AEN. We raised what needed to be raised at the meeting. The parameters had been set and Mr Yan instructed that we should wait and we did as nothing said suggested otherwise. Regardless we had a meeting and what was required to have been said was said at that meeting as such there was no need to have said anything more in writing. Mr Coulston appears to have forgotten the meetings and claims we raised no complaint. That is not true nor correct. We raised complaint at the meeting and as such there was no need to repeat it in writing at this stage, as he said nothing at the meeting to suggest he was not going to do what he had agreed to do in clause 24:11. In any event if what was stated in clause 24.11 was not achieved Mr Yan would get the final instalment back. Otherwise I reminded Walt of the Deed and clause 24.11 at the meeting. 276 As such the matters Walt talks about at paragraphs 32 to 37 are part of the things expected of him and no need to reply arose as nothing was said other than for the carparking issue arose that involved or required any input from AEN. The parameters had been set and I instructed that we should wait and we did as nothing said suggested otherwise. Regardless there was a meeting and what was required to have been said was said at that meeting as such there was no need to have said anything more in writing. Walt appears to have forgotten the meetings and claims we raised no complaint. That is not true nor correct. We raised complaint at the meeting and as such there was no need to repeat it in writing at this stage, as he said nothing at the meeting to suggest he was not going to do what he had agreed to do in clause 24:11.
310 At paragraphs 39 to 46 Mr Coulston claims to have engaged in activity. That is not known to AEN and if in fact it occurred and no documents have been provided to suggest that it did or not. Regardless this was all the things that Victoria Dragons and Mr Coulston had agreed to do in the Deed and in fact said he was doing to ensure the DA application was approved as agreed at clause 24.11 by the due date of 26 November 2018. As such it is unclear why it is raised, these were all things that needed to be done. Victoria Dragons had already been paid $850,000 to do these things and it was doing them in the hope it could get a further $1.6 million plus, if it achieved what it promised by 26 November 2018. 277 At paragraphs 39 to 46 Walt claims to have engaged in activity. That is not known to AEN and if in fact it occurred and no documents have been provided to suggest that it did or not. Regardless this was all the things that Victoria Dragons and Walt had agreed to do in the Deed and in fact said he was doing to ensure the DA application was approved as agreed at clause 24.11. As such it is unclear why it is raised, these were all things that needed to be done. Victoria Dragons had already been paid $850,000 to do these things and it was doing them in the hope it could get a further $1.6 million plus, if it achieved what it promised by 26 November 2018.
312 Regardless they were matters for Victoria Dragon to address as it had agreed it would in achieving the agreements reflected at clause 24.11. 279 Regardless they were matters for Victoria Dragon to address as it had agreed it would in achieving the agreements reflected at clause 24.11.
313 More to the point the matters stated at paragraphs 39 to 46 were never discussed nor raised with AEN at any time whilst they are unfolding nor after. These are known to me and as such AEN and Mr Yan for the first time through the affidavit. 280 More to the point the matters stated at paragraphs 39 to 46 were never discussed nor raised with AEN at any time whilst they are unfolding nor after. I have only seen them now for the first time.
316 When that was reviewed, Mr. [Y]an formed the view that, that arose due to the fact that material was served late by Victoria Dragons and other material was still outstanding and as such was not prepared to extend the DA Sunset date of 26 November 2018, and wanted to wait to see when the new court date would be given. 283 When that was reviewed and translated to me, I formed the view that, that arose due to the fact that material was served late by Victoria Dragons and other material was still outstanding and as such was not prepared to extend the DA Sun Set date of 26 November 2018, and wanted to wait to see when the new date would be given.
318 We waited expecting to be informed of a new hearing date having no notice as to any change in the drawings. None of the things that Mr Coulston claims to have dealt with his Design Team at paragraphs 40 to 45 or that concerned his design team or him, were in fact discussed with myself and Mr Yan and we were not informed of any of these things and were not aware of them until this affidavit. 285 I waited expecting to be informed of a new hearing date having no notice as to any change in the drawings. None of the things that Walt claims to have be deleted with his Design Team at paragraphs 40 to 45 or that concerned his design team or him, were in fact discussed with myself and we were not informed of any of these things and were not aware of them until this affidavit.
319 All that happened after 3 July 2018, was that we received an email dated 17 July 2018. It was sent to Frank Ngo by Mr Coulston's solicitor. Other than that, we never heard or had any feedback as to the re-introduction of a childcare centre to achieve the requirements of clause 24.11 and what Mr Yan wanted. 286 All that happened after 3 July 2018, was that we received an email dated 17 July 2018, It was sent to Frank Ngo by Walt Coulston's lawyers. Other than that, we never heard or had any feedback as to the re-introduction of a childcare centre to achieve the requirements of clause 24.11 and what I wanted.
321 I and Mr Yan discussed that email with Frank Ngo. Mr Yan told him that "I had no such discussion with Mr Coulston as to agreeing to extend the Sunset date". Mr Ngo likewise said; "Nor did I, I have no idea what they are taking about". 288 I and Angela discussed that email with Frank Ngo. I told him that "I had no such discussion with Walt as to agreeing to extend the sun set date". Mr Ngo likewise said; "Nor did I, I have no idea what they are taking about" Angela said the same.
322 Mr Ngo was instructed not to do anything and wait to see what happens next. 289 I instructed Mr Ngo not to do anything and wait to see what happens next.
327 I believe these may be the versions made ready for the 2 and 3 July 2018, hearing in Court and may be the documents served late that brought about the hearing date vacated. I am not certain of this as Mr Coulston has not said anything about this in his affidavit. 294 I believe these may be the versions made ready for the 2 and 3 July 2018, hearing in Court and may be the documents served late that brought about the hearing date vacated. I am not certain of this as Walt has not said anything about this in his affidavit nor as things were unfolding kept me fully informed.
331 As such we ignored the request to extend time, as such was already declined at the meeting in April 2018, and there had been no discussions to warrant the 17 and 24 July 2018, emails from Victoria Dragons lawyers providing for a deed of variation. That document was never agreed to nor sought and never executed. 298 As such we ignored the request to extend time, as such was already declined at the meeting in April 2018, and there had been no discussions to warrant the 17 and 24 July 2018, emails from Victoria Dragons lawyers providing for a deed of variation. That document was never agreed to nor sought and never executed.
333 As such to July 2018, Mr Coulston and Victoria Dragons had produced no documents that suggested he and it had any intentions to introduce studio apartments and said nothing to suggest he did not understand the agreement, and that clause 24.11 as far as we were concerned precluded studio apartments. 300 As such to July 2018, Walt and Victoria Dragons had produced no documents that suggested he and it had any intentions to introduce studio apartments and said nothing to suggest he did not understand the agreement, and that clause 24.11 as far as I was concerned precluded studio apartments.
334 He never said anything at the meeting in April 2018, to suggest he did not understand what we wanted and what our understanding of the agreement was, namely no studios, no apartments less than 50 square meters in internal size and no more than 22 apartments with a size of 50 square meters internally and no less that provided a one sleeping facility. This was my understanding from all the things that had happened to July 2018. At the meeting in April 2018 Mr Coulston said nothing to suggest he had a different understanding or was doing anything different and in fact the version S, T and U of the drawings show he was prosecuting the clause 24.11 DA as agreed. 301 He never said anything at the meeting in April 2018, to suggest he did not understand what I wanted and what our understanding of the agreement was, namely no studios, no apartments less than 50 square meters in internal size and no more than 22 apartments with a size of 50 square meters internally and no less that provided a one sleeping facility. This was my understanding from all the things that had happened to July 2018. At the meeting in April 2018 Walt said nothing to suggest he had a different understanding.
At no point in writing or orally did Walt again say anything to make use understand that he viewed studios, as different to a one bed room apartment, despite us repeating at the April 2018, meeting: At no point in writing or orally did Walt again say anything to make use understand that he viewed studios, as different to a one bed room apartment, despite us repeating at the April 2018, meeting;
335 "As we have agreed you have to 26 November 2018, to achieve a DA approval as defined at 24.11 that is the mix as we have asked for and clearly, no apartment less than 50 square meters internally and no more than 22 apartments having a size of or less than 50 square meters in size internally." 302 "As we have agreed you have to 26 November 2018, to achieve a DA approval as defined at 24.11 that is the mix as we have asked for and clearly, no apartment less than 50 square meters internally and no more than 22 apartments having a size of or less than 50 square meters in size internally."
Rather Mr Coulston said: Rather Walt said:
"That can be achieved and if we include a childcare centre, we can still get that as they want childcare centres in the area." "That can be achieved and if we include a childcare centre, we can still get that as they want childcare centres in the area."
336 As the child care centre was not raised again other than once in writing I was instructed not to raise it again. As such we waited. 303 As the child care centre was not raised again other than once in writing I ignored it and instructed Angela not to raise it again. As such I waited.
338 Again, I say that is what he agreed to do and that is, prosecute the Development Application, for which he had already been paid $850,000 by that date. 305 Again, I say that is what he agreed to do and that is, prosecute the Development Application, for which he had already been paid $850,000 by that date.
339 In fact, those documents as they are at pages 404 to 407 of 'WC-1' in fact reveal that version U was the subject of that Motion. Version U, did not provide for any studios and was in line with clause 24.11, as I recall, but for the car parking. 306 In fact, those documents as they are at pages 404 to 407 of 'WC-l' in fact reveal that version U was the subject of that Motion. Version U, did not provide for any studios and was in line with clause 24.11, as I recall when seen in the links and when seen again now once produced.
340 We were not provided with any documents until about mid-August 2018, that suggested otherwise as such to mid-August 2018 there was no need to raise objection. 307 We were not provided with any documents until about mid-August 2018, that suggested otherwise as such to mid-August 2018 there was no need to raise objection.
341 At paragraphs 50 to 51 Mr Coulston talks about emails as between himself and others. These were never sent to AEN and where not known to AEN until 17 January 2020, when referenced in Mr Coulston's affidavit. 308 At paragraphs 50 to 51 Walt talks about emails as between himself and others. These were never sent to AEN and where not known to AEN until 17 January 2020, when referenced in Walt's affidavit.
342 Rather what occurred on 6 August 2018, is that Mr Coulston caused his lawyers to issue a notice of termination, of the Nomination Deed on the basis that they were claiming that Mr Yan was no longer a Director. They also demanded a release of the final instalments under the Nomination Deed. 309 Rather what occurred on 6 August 2018, is that Walt caused his lawyers to issue a notice of termination, of the Nomination Deed on the basis that they were claiming that I was no longer a Director. They also demanded a release of the final instalments under the Nomination Deed. I understood this from the translation.
346 It became apparent to me that Mr Coulston wanted to negotiate a change in the DA Sunset Date from 26 November 2018, to a later date. I said; 313 It became apparent to me that Walt from the reports, wanted to negotiate a change in the DA Sunset Date from 26 November 2018, to a later date. I provided clear instructions and am informed Angela said the following in line with my instructions;
"No we have an agreement. The application was delayed for no reason, now it has been delayed by having to go to court. You were not very clear about a lot of things. The agreement is 26 November 2018, if you cannot get what we want and agreed on by that date then we get a refund of the final payment. That Is not negotiable." "No we have an agreement. The application was delayed for no reason, now it has been delayed by having to go to court. You were not very clear about a lot of things. The agreement is 26 November 2018, if you cannot get what we want and agreed on by that date then we get a refund of the final payment. That is not negotiable. "
I asked about the next hearing date and the progress of the matter and all he said was: The other subject as reported to me was the next hearing date. I was told Walt said:
348 "We have filed a motion to further amend". 315 "We have filed a motion to further amend".
I did not have these but given the meeting on 9 August 2018,1 can only assume he was talking about the 26 June 2018, documents and drawings. I did not have these but given the meeting on 9 August 2018,1 can only assume he was talking about the 13 July 2018, documents and drawings.
Mr Coulston before completing the meeting assure me by saying: I was further told that Walt before completing the meeting assure Angela by saying:
349 "We are prosecuting the DA as agreed in clause 24.11.1 know what we agreed as to unit sizes and the mix and I know what Mr Yan wants. But can you see if he (Mr Yan) will extend the DA Sunset date. I think we will need more time." 316 "We are prosecuting the DA as agreed in clause 24.11.1 know what we agreed as to unit sizes and the mix and I know what Mr Yan wants. But can you see if he (Mr Yan) will extend the DA Sun Set date. I think we will need more time."
I said: I was told by Angela she said
"I will ask and let you know, but I don't think so, so if you do not hear from me it is as we agreed." "I will ask and let you know, but I don't think so".
350 From this exchange I understood that the termination notice was at an end and just a try on. 317 From this reported exchange I understood that the termination notice was at an end and just a try on.
353 As these were at complete odds with what was discussed at the meeting on 9 August 2018, and as I discussed this with Mr Yan, my instructions were to inform Charles not to reply. Mr Ngo was instructed to reply to, reject the offer being made and reject the drawings now being proposed including studios and that we would be relying on the Deed to get a refund if the 24.11 clause was not achieved. At that date I still had seen no drawings with studios. 320 As translated to me these were at complete odds with what was discussed at the meeting on 9 August 2018, as reported to me, my instructions were to inform Charles not to reply. Mr Ngo was instructed to reply to the emails, by reject the offer being made and reject the drawings now being proposed including studios and that I would be relying on the Deed to get a refund if the 24.11 clause was not achieved. At that date I still had seen no drawings with studios.
354 The drawings included in the email dated 12 August 2018, cannot be opened by me now. The only drawings that existed as at 12 August 2018, was the version marked U, dated 27 June 2018, that did not include studios. The next version marked V did not arise until September 2018, as such could not have been sent on 12 August 2018. As such I cannot now recall if they included studios also or not. But the emails made me understand that Mr Coulston was contemplating changing the apartment mix such it was not what was recorded at clause 24.11. 321 The drawings included in the email dated 12 August 2018, cannot be opened by me now. The only drawings that existed as at 12 August 2018, was the version marked U, dated 27 June 2018, that did not include studios. The next version marked V did not arise until September 2018, as such could not have been sent on 12 August 2018. As such I cannot now recall if they included studios also or not. But the emails made me understand that Walt was contemplating changing the apartment mix such it was not what was recorded at clause 24.11.
355 For these reasons Mr Ngo was instructed to reply 14 August 2018, that the proposals advanced as between 10 August 2018 and 14 August 2018, were not acceptable and that Mr Yan and AEN would be relying on the Deed to get a refund, if by 26 November 2018, we did not have a DA approval as agreed at clause 24.11. 322 For these reasons I instructed Mr Ngo to reply 14 August 2018, that the proposals advanced as between 10 August 2018 and 14 August 2018, were not acceptable and that I and AEN would be relying on the Deed to get a refund, if by 26 November 2018, we did not have a DA approval as agreed at clause 24.11.
358 As such Mr Coulston was on notice that we were not agreeing to any extension of the Sunset date and not agreeing to the termination of the Deed for the reasons advanced and demanding that the DA be prosecuted as agreed and not otherwise and that otherwise AEN would rely on the Deed to demand a refund of the balance of the nomination fee in the sum of $1.4 plus million. 325 As such Walt was on notice that we were not agreeing to any extension of the sun set date and not agreeing to the termination of the Deed for the reasons advanced and demanding that the DA be prosecuted as agreed and not otherwise and that otherwise AEN would rely on the Deed to demand a refund of the balance of the nomination fee in the sum of $1.4 plus million.
359 As such I say by reason of the email dated 14 August 2018, Mr Coulston was on notice that Mr Yan and AEN would be relying on the Deed and the agreement we had and would not accept a DA with studios and an apartment mix different to that provided for in clause 24.11. 326 As such I say by reason of the email dated 14 August 2018 and meeting 9 August 2018, Walt was on notice that I and AEN would be relying on the Deed and the agreement we had and would not accept a DA with studios and an apartment mix different to that provided for in clause 24.11.
360 Mr Coulston, at paragraphs 56 to 61 says he took further steps. I have not seen these documents before the service of the affidavit dated 17 January 2020. I have no knowledge as to the truth or accuracy of the things being claimed within them. 327 Walt at paragraphs 56 to 61 says he took further steps. I have not seen these documents before the service of the affidavit dated 17 January 2020. I have no knowledge as to the truth or accuracy of the things being claimed within them.
However, the email dated 21 August 2018, sent to Frank Ngo did come to my attention. I was advised of the call from Mr Coulston to Frank. I had the following conversation with Mr Yan and Mr Frank Ngo, about this call. However, the email dated 21 August 2018, sent to Frank Ngo did come to my attention. I was advised of the call from Walt to Frank. I had the following conversation with Mr Frank Ngo about this call.
361 "Walt rang he wants to see if we can agree on more time so they can prosecute the DA as agreed, he was also talking about combining the Frank said: "Studios with the one-bedroom apartment so as to have a dual key apartment. I told him that "my instructions are clear and that Mr Yan is very angry as to the delay and that he was made to exercise the options and then all these problems. That the DA process was otherwise explained and it was said to be very achievable and now all these problems". I told him, "Mr Yan would not agree as he had lost confidence in what he (Walt) was saying. But I would ask and get back to him if there was any change to extend the Sunset date, if not the letter of 14 August 2018, was our position and not negotiable." 328 Frank said: "Walt rang he wants to see if we can agree on more time so they can prosecute the DA as agreed, he was also talking about combining the Studios with the one-bedroom apartment so as to have a dual key apartment. I told him that "my instructions are clear and that you are very angry as to the delay and that he was made to exercise the options and then all these problems. That the DA process was otherwise explained and it was said to be very achievable and now all these problems". I told him, "Mr Yan would not agree as he had lost confidence in what he (Walt) was saying. But I would ask and get back to him if there was any change to extend the sun set date, if not the letter of 14 August 2018, was our position and not negotiable."
Mr Yan said: "No more time and no studios and no changes. So do not engage with him." I said: "No more time and no studios and no changes. So do not engage with him."
362 I understood from this that Mr Ngo was instructed to rely on the 14 August 2018, letter that we did not agree and not engage with Mr Coulston further. 329 I understood from this that Mr Ngo was instructed to rely on the 14 August 2018, letter that we did not agree and not engage with Walt further. I understand Frank Ngo rang and informed Walt of my position.
364 In so far as that in fact occurred that was in accordance with the Deed as I understood and in circumstance, that his purported termination notice was rejected. At this date, it had been made clear to Mr Coulston that Mr Yan would not accept any DA that included studio apartments and was different to clause 24.11 in substantial way and only would accept a DA as stated at clause 24.11 as we understood it and the agreement we had and in circumstance that we had yet not been provided with any specific written request from council as to any changes. 331 In so far as that in fact occurred that was not in accordance with the Deed as I understood and in circumstance, that his purported termination notice was rejected. At this date, it had been made clear Walt, that I would not accept any DA that included studio apartments and was different to clause 24.11 in substantial way and only would accept a DA as stated at clause 24.11 as we understood it and the agreement we had and in circumstance that we had yet not been provided with any specific written request from council as to any changes.
367 Now understanding the contents of paragraphs 62 to 68, and the exhibited documents, all these things that Mr Coulston was carrying out, were contrary to the agreement we understood we had and contrary to what was said at the meeting in April 2018 and again at the meeting on 9 August 2018. 334 Now understanding the contents of paragraphs 62 to 68, and the exhibited documents, all these things that Walt claims he was carrying out, were contrary to the agreement I understood I had and contrary to what was said at the meeting in April 2018 and again at the meeting on 9 August 2018 and the email from Frank Ngo of 14 August 2018.
370 As to paragraphs 69 and 70, that email did come to my attention as they are at pages 473 to 474 of 'WC-1'. At that time, I had no notice of studios other than in the emails of 12 August 2018, and noted that we had expressly refused to extend time and accept any such changes both in writing and orally at the meeting on 9 August 2018 and in the mail of 14 August 2018. I had seen no drawings including studios or changing the mix as provided for in clause 24.11. 337 As to paragraphs 69 and 70, that email did come to my attention as they are at pages 473 to 474 of 'WC-l'. At that time, I had no notice of studios other than in the emails of 10 and 12 August 2018, and noted that we had expressly refused to extend time and accept any such changes both In writing and orally at the meeting on 9 August 2018 and in the email of 14 August 2018.1 had seen no drawings including studios or changing the mix as provided for in clause 24.11.
371 By reason of my state of mind as noted at paragraph 370 and that of Mr Yan as all things were translated through me, I understood and as did Mr Yan, that Mr Coulston had done something to resolve the problem and that the DA as agreed and as we understood was being prosecuted and could be achieved by 26 November 2018.1 assumed the Council had changed its stand or possible the childcare centre was accepted and they would allow the mix as agreed and number as agreed and the car parking. 338 By reason of my state of mind as noted at paragraph 337 and the translation to me, I understood, that Walt had done something to resolve the problem and that the DA as agreed and as we understood was being prosecuted and could be achieved by 26 November 2018. I assumed the council had changed its sand or possible the childcare centre was accepted and they would allow the mix as agreed and number as agreed and the car parking.
372 I took the emails dated 21 and 24 August 2018 as they are at pages 473 and 474, as a change in position and that the clause 24.11 DA was being prosecuted and in fact was achievable. I had seen nothing to suggest anything else and all the drawings to that date were in accordance with clause 24.11 but for the car parking. As such relying on all that had been said by Mr Coulston and all the documents, I believed and told Mr Yan that Mr Coulston was now back to prosecuting the clause 24.11 DA and that it was expected to be achieved by 26 November 2018. 339 I took the emails dated 21 and 24 August 2018 as they are at pages 473 and 474, as a change in position and that the clause 24.11 DA was being prosecuted and in fact was achievable. I had seen nothing to suggest anything else and all the drawings to that date were in accordance with clause 24.11 but for the car parking. As such relying on all that had been said by Walt and all the documents, I believed and understood that Walt was now back to prosecuting the clause 24.11 DA and that it was expected to be achieved by 26 November 2018.
373 As at 24 August 2018, the date of the email referenced at paragraphs 69 and 70, I was not aware that a further hearing date had been vacated. Nor was I aware of the things mentioned at paragraphs 62 to 68 of the 17 January 2020, affidavit of Mr Coulston. He never disclosed these in writing nor at the meeting on 9 August 2018. 341 As at 24 August 2018, the date of the email referenced at paragraphs 69 and 70, I was not aware that a further hearing date had been vacated. Nor was I aware of the things mentioned at paragraphs 62 to 68 of the 17 January 2020, affidavit of Mr Walt Coulston. He never disclosed these in writing nor at the meeting on 9 August 2018.
375 As I have said I was made to believe from the 21 and 24 August 2018, emails and that we clearly said we would not extend time nor agree to anything other than a clause 24.11 DA, that Mr Coulston was in fact prosecuting such. I thought that Mr Coulston was now able to achieve what we had agreed and hence why he changed his position and accepted that we would not extend time nor any DA with studios as we had agreed. Otherwise we would rely on the Deed and our letter of 14 August 2018 and the oral position and refusal at the meetings in April 2018 and 9 August 2018, respectively. 342 As I have said I was made to believe from the 21 and 24 August 2018, emails and that we clearly said we would not extend time nor agree to anything other than a clause 24.11 DA, that Walt was in fact prosecuting such. I thought that Walt was now able to achieve what we had agreed and hence why he changed his position and accepted that we would not extend time nor any DA with studios as we had agreed. Otherwise we would rely on the Deed and our letter of 14 August 2018 and the oral position and refusal at the meetings in April 2018 and 9 August 2018, respectively.
377 At paragraphs 71 and 72 Mr Coulston talks about a further email dated 30 August 2018 sent to Frank Ngo. Again, that came to my attention, nothing had changed as between 24 August 2018 and 30 August 2018, in my mind. I was not aware that drawings were being changed to include studios. I was not aware of any of the changes that Mr Coulston now discloses for the first time in his affidavit. 344 At paragraphs 71 and 72 Mr Walt Coulston talks about a further email dated 30 August 2018 sent to Frank Ngo. Again, that came too [sic] my attention, nothing had changed as between 24 August 2018 and 30 August 2018, in my mind. I was not aware that drawings were being changed to include studios. I was not aware of any of the changes that Walt now discloses for the first time in his affidavit.
378 As at 30 August 2018, the only thing known to me was, that Mr Coulston had our letter dated 14 august 2018, in which all things proposed by him had been refused, the meetings on 9 August 2018 again were I had refused to extend time and demanded compliance with the clause 24.11 DA, and he had the discussion with Frank Ngo on 21 August 2018, that clearly stated that Mr Yan would not accept nor settle for anything other than what was agreed namely no studios and otherwise what was in clause 24.11. As such I took the email of 30 August 2018 as it is at page 475 of 'WC-1" as further confirmation that Mr Coulston had abandoned the termination claim and was in fact prosecuting the DA as provided for in clause 24.11. I had seen nothing to suggest otherwise. I had not seen any of the documents he now says he was creating with his experts. I had no notice of these things 345 As at 30 August 2018, the only thing known to me was, that Mr Walt Coulston had our letter dated 14 august 2018, in which all things proposed by him had been refused, the meetings on 9 August 2018 again were I had refused to extend time and refused any change to 24.11 DA, and he had the discussion with Frank Ngo on 21 August 2018, that clearly stated that I not accept nor settle for anything other than what was agreed namely no studios and otherwise what was in clause 24.11. As such I took the email of 30 August 2018 as it is at page 475 of 'WC-1' as further confirmation that Walt had abandoned the termination claim and was in fact prosecuting the DA as provided for in clause 24.11. I had seen nothing to suggest otherwise. I had not seen any of the documents he now says he was creating with his experts. I had no notice of these things
379 Otherwise I thought we had the Deed and our letter and meetings but otherwise through the Council had changed its position. Nothing in the email put me on notice that Mr Coulston was taking about anything else, as it was made clear in the meetings that Mr Yan would not accept anything else and the 14 August 2018, letter from Mr Frank Ngo made it clear. 346 Otherwise I thought we had the Deed and our letter and meetings but otherwise through the Council had changed its position. Nothing in the email put me on notice that Walt was taking about anything else, as it was made clear in the meetings that I would not accept anything else and the 14 August 2018, letter from Mr Frank Ngo made it clear.
380 At paragraphs 73 and 74 Mr Coulston again writes to Frank Ngo. It is dated 1 September 2018. It is at page 480 of #WC-1'. These did come to my attention. As between 14 August 2018 and 1 September 2018, I was not aware of any drawings including studios. All I was aware was that Mr Coulston tried to terminate the Deed, this was rejected both orally and in writing, he asked for more time, this was rejected orally and in writing a number of time, he suggested including studios and this was rejected orally and in writing a number of time. These rejections were in writing and again in discussions with Mr Frank Ngo on 21 August 2018 and in writing on 14 August 2018, otherwise on 9 august 2018 at the meeting I made it very clear that Mr Yan wanted the DA defined in Clause 24.11 and not otherwise. 347 At paragraphs 73 and 74 Walt again writes to Frank Ngo. It is dated 1 September 2018. It is at page 480 of 'WC-1'. These did come to my attention. As between 14 August 2018 and 1 September 2018, I was not aware of any drawings including studios. All I was aware was that Walt tried to terminate the Deed, this was rejected both orally and in writing, he asked for more time, this was rejected orally and in writing a number of time, he suggested including studios and this was rejected orally and in writing a number of time. These rejections were in writing and orally at meetings 9 August 2018 and again in discussions with Mr Frank Ngo on 21 August 2018 and in writing on 14 August 2018.
381 As at 1 September 2018, when this email and letter came to my attention, I understood Mr Coulston was prosecuting the DA as agreed namely 96 units, no apartments less than 50 square meters and no more than 22 apartments of a size of 50 square meters or less, namely no studios and the car parking would be at least 105 as sought in writing, otherwise 130 car parking spaces. At the time of this email I was not aware of all the things he now claims he was doing that were at odd with clause 24.11. 348 As at 1 September 2018, when this email and letter came to my attention, I understood Walt was prosecuting the DA as agreed namely 96 units, no apartments less than 50 square meters and no more than 22 apartments of a size of 50 square meters or less, namely no studios and the car parking would be at least 105 as sought in writing, otherwise 130 car parking spaces. At the time of this email I was not aware of all the things he now claims he was doing that were at odd with clause 24.11.
383 I though and understood from this that the Council had changed its mind or that with the childcare then we get the childcare and the mix we wanted. We waited. 350 I though and understood from this that the council had changed its mind or that with the childcare then we get the childcare and the mix we wanted. We waited.
385 At paragraphs 75 to 76, Mr Coulston talks about amened drawings and a notice of Motion and an amended DA. These are said to have occurred as between 7 September and 13 September 2018,1 was not aware of these nor were copies made available as the Deed required at clause 24.4. the first these came to my attention as to documents dated September 2018 was after 17 January 2020, while I was reading and trying to understand the affidavit of Mr Coulston. This was never agreed to by AEN and AEN never had notice of such while it was occurring. Had it further complaint and meetings would have been called for. 351 At paragraphs 75 to 76, Mr Walt talks about amened drawings and a notice of Motion and an amended DA. These are said to have occurred as between 7 September and 13 September 2018, I was not aware of these nor were copies made available as the Deed required at clause 24.4. the first thing came to my attention as to documents dated September 2018 was after 17 January 2020, while I was having translated to me and trying to understand the affidavit of Mr Walt Coulston. This was never agreed to by AEN and AEN never had notice of such while it was occurring.
386 My understanding to 1 September and to 9 September 2018, was that Victoria Dragons and Mr Coulston were still prosecuting the drawings as last provided in April 2018, I knew a version existed dated June 2018, as with Council and understood that these were being prosecuted. So, we waited given the positive news. 352 My understanding to 1 September and to 9 September 2018, was that Victoria Dragons and Walt were still prosecuting the drawings as last provided in April 2018, I knew a version existed dated June 2018, as with counsel and understood that these were being prosecuted. So, we waited given the positive news.
387 Nothing had been provided or said by Mr Coulston, that suggested he was prosecuting DA drawings that included studios. We had stated our position clearly on 9 August 2018 and again on 14 august 2018 [sic and note the same error as in Mr Yan's affidavit], in writing and again on 21 August 2018 in discussions as between Mr Ngo and Walt and as such as I have stated I believed from the things being said by Mr Coulston that the council had changed its position so we waited. 353 Nothing had been provided or said by Walt Coulston that suggested he was prosecuting DA drawings that included studios. We had notice of this on 9 August 2018 and against on 14 august 2018 (sic and note the same error as in Ms Wang's affidavit, in writing and again on 21 August 2018 and as such as I have stated I believed from the things being said by Walt that the council had changed its position so we waited.
389 At paragraphs 80 and 81 and 83 and 84, Mr Coulston talks about further emails sent to Frank and Charlie these did come to my attention. The one referenced at page 492 to 493 and that at pages 494 to 495 of 'WC-l', put me on notice that Mr Coulston was not in fact prosecuting the DA as provided for at clause 24.11, rather doing something else and different to what was suggested in the emails to 1 September 2018, and was again taking about changes to drawings and provided drawings suggesting studios in the mix. 355 At paragraphs 80 and 81 and 83 and 84, Walt Coulston talks about further emails sent to Frank and Charlie these did come to my attention. The one referenced at page 492 to 493 and that at pages 494 to 495 of 'WC-1', put me on notice that Mr Walt Coulston was not in fact prosecuting the DA as provided for at clause 24.11 rather doing something else and different to what was suggested in the emails to 1 September 2018, and was again taking about changes to drawings and provided drawings suggesting studios in the mix.
390 Once this came to my attention, I called for an urgent meeting. 356 Once this came to my attention I called for an urgent meeting.
392 I think it was at this meeting that I was given a version W. As I have a hard copy of that. These are dated 4 October 2018, and as such the meeting was after this date. 358 I think it was at this meeting that we were given a version W. As we have a hard copy of that. These are dated 4 October 2018, and as such the meeting was after this date.
393 Mr Coulston was again told at the meeting: 359 Mr Coulston was again told at the meeting as I instructed he be told:
"Mr Yan will not accept what you are doing. You are not acting in accordance with the Deed and unless you get what we agreed to, then Mr Yan will not agree to the release of the $1.4 million plus nor will he pay any further sum. You can proceed as you want but if studios are included and what we agreed on is not achieved then he will not accept what you are doing, it was made clear to you in the letter of 14 August 2018 and you miss lead us through August and September. In any event come 26 November 2018, if the DA is not as we agreed then Mr Yan will rely on the Deed to get a refund." "Mr Yan will not accept what you are doing. You are not acting in accordance with the Deed and unless you get what we agreed to, then Mr Yan will not agree to the release of the $1.4 million plus nor will he pay any further sum. You can proceed as you want but if studios are included and what we agreed on is not achieved then he will not accept what you are doing, it was made clear to you in the letter of 14 August 2018 and you miss lead us through August and September. In any event come 26 November 2018, if the DA is not as we agreed then Mr Yan will rely on the Deed to get a refund."
396 At paragraph 82, makes reference to a conversation. Mr Ngo informs me no such conversation took place. 362 At paragraph 82, makes reference to a conversation. Mr Ngo informs me no such conversation took place.
397 Mr Ngo had no authority to say any such things. 363 Mr Ngo had no authority to say any such things.
398 I say that as between June 2017 to August 2018, Mr Couslton [sic and note the same error occurs in Mr Yan's affidavit] did nothing and said nothing to suggest he was prosecuting a DA other than that provided for at clause 24.11 as such there was no need to do anything or otherwise try and stop him. 364 I say that as between June 2017 to August 2018, Mr Walt Couslton [sic and note the same error occurs in Ms Wang's affidavit] did nothing and said nothing to suggest he was prosecuting a DA other than that provided for at clause 24.11 as such there was no need to do anything or otherwise try and stop him.
399 As between 10 and 14 August 2018, I was on notice of the things Mr Coulston was planning and he was told in an email dated 14 August 2018 and in calls that we did not agree and otherwise had stated our position at a meetings 9 August 2018 and another post 4 October 2018 that we did not agree and in telephone calls we did not agree. 365 As between 10 and 14 August 2018, I was on notice of the things Mr Walt Coulston was planning and he was told in an email dated 14 August 2018 and at meetings that we did not agree and in telephone calls we did not agree.
400 As between August and to late September 2018 I understood from emails that Mr Coulston was again prosecuting the 24.11 DA and as such we waited. 366 As between August and to late September 2018 I understood from emails that Mr Walt Coulston was again prosecuting the 24.11 DA and as such we waited.
403 As such I say that Victoria Dragons never complied with the Nomination Deed and while it issued a claim it is not entitled to make any such demand or claim as the Development Approval provided was not that which was agreed to, at clause 24.11. Further to date Victoria Dragons has provided no writing from the council to authorise it to agree or in fact make any change to the DA as defined at clause 24,11. 369 As such I say that Victoria Dragons never complied with the Nomination Deed and while it issued a claim it is not entitled to make any such demand or claim as the Development Approval provided was not that which was agreed to, at clause 24.11. Further to date Victoria Dragons has provided no writing from the council to authorise it to agree or in fact make any change to the DA as defined at clause 24.11.
405 As between 15 August 2018 to the almost the end of September 2018, following the 9 August 2018 meeting and the email of 14 August 2018 from Frank Ngo and the conversation on 21 August 2018, with Frank Ngo, I understood from the emails written by Mr Coulston, that he had accepted our position that we would not extend the Sunset date and we would not accept a DA that did not comply with clause 24.11, that would include studios, as such he had returned to prosecuting the DA as provided for in clause 24.11. I was not aware that in fact he was doing some thing [sic and note the same usage occurs in Mr Yan's affidavit] very different. As such in so far as we did not write that was because we were not aware of what he was doing until late September 2018. 371 As between 15 August 208 to the almost the end of September 2018, following the 9 August 2018 meeting and the email of 14 August 2018 from Frank Ngo and the conversation on 21 August 2018, with Frank Ngo, I understood from the emails written by Walt, that he had accepted our position that we would not extend the sun set date and we would not accept a DA that did not comply with clause 24.11, that would include studios, as such he had returned to prosecuting the Da as provided for in clause 24.11.1 was not aware that in fact he was doing some thing [sic and note the same usage occurs in Ms Wang's affidavit] very different. As such in so far as we did not write that was because we were not aware of what he was doing until late September 2018.
406 At pages 501 to 735 of 'WC-1' is a DA to which Victoria Dragons agreed too. That DA is different to that agreed to and provided for in the Nomination Deed and one that AEN disputes as entitling Victoria Dragons to any further payment. 372 At pages 501 to 735 of 'WC-l' is a DA to which Victoria Dragons agreed too. That DA is different to that agreed to and provided for in the Nomination Deed and one that AEN disputes as entitling Victoria Dragons to any further payment.
407 Through the material Victoria Dragons claims that AEN never complained or raised objection that is not true. Once AEN was on notice that Victoria Dragons was doing something at odds with clause 24.11 it raises objection on 14 August 2018 in writing and again at meetings on 9 August 2018 and in telephone calls and at a meeting post 4 October 2018. As between the end of August and late September 2018 no objections were raised as I understood from emails that Victoria Dragons had agreed to prosecute the clauses 24.11 DA and AEN was not on notice of the things it was in fact doing. Once on notice from late September 2018 that in fact Victoria Dragons was not prosecuting the clause 24.11 DA, AEN again raise objections by calling for meetings and otherwise relied and was intending to rely on the Deed. 373 Through the material Victoria Dragons claims that AEN never complained or raised objection that is not true. Once AEN was on notice that Victoria Dragons was doing something at odds with clause 24.11 it raises objection on 14 August 2018 in writing and again at meetings on 9 August 2018 and in telephone calls. As between the end of August and late September 2018 no objections were raised as I understood from emails that Victoria Dragons had agreed to prosecute the clauses 24.11 Da and AEN was not on notice of the things it was in fact doing. Once on notice from late September 2018 that in fact Victoria Dragons was not prosecuting the clause 24.11 DA, AEN again raise objection and otherwise relied on the Deed.
408 I say that Victoria Dragons is not entitled to make the claims it is making and the final instalment fee should be refunded to AEN. AEN was entitled to resist such payment as claimed by Victoria Dragons and make the claims it is now making. 374 I say that Victoria Dragons is not entitled to make the claims it is making and the final instalment fee should be refunded to AEN. AEN was entitled to resist such payment as claimed by Victoria Dragons and make the claims it is now making.
[10]
The difficulty that arises from the copying of parts of Mr Yan's and Ms Wang's affidavits is not limited to those affidavits. The affidavit dated 7 August 2020 of AEN's solicitor, Mr Ngo, also contains passages, dealing with factual matters, that are identical to parts of Ms Wang's and Mr Yan's affidavits of the same date. Without seeking to be exhaustive, paragraphs 8-12 of Mr Ngo's affidavit are wholly or partly copied from paragraphs 16-20 of Mr Yan's affidavit or vice versa; part of paragraph 13 of Mr Ngo's affidavit from paragraph 11 of Ms Wang's affidavit or paragraph 23 of Mr Yan's affidavit or vice versa; paragraph 14 of Mr Ngo's affidavit from paragraph 25 of Mr Yan's affidavit or vice versa; part of the quote in paragraph 45 of Mr Ngo's affidavit from paragraph 269 of Ms Wang's affidavit or paragraph 240 of Mr Yan's affidavit or vice versa; paragraphs 47-50 of Mr Ngo's affidavit from paragraphs 270-271 and 343-344 of Ms Wang's affidavit or paragraphs 241-242 and 310-311 of Mr Yan's affidavit or vice versa; paragraphs 52-60 of Mr Ngo's affidavit from paragraphs 345-353 of Ms Wang's affidavit or paragraphs 312-320 of Mr Yan's affidavit or vice versa; paragraph 62 of Mr Ngo's affidavit from paragraph 358 of Ms Wang's affidavit or paragraph 325 of Mr Yan's affidavit or vice versa; and paragraphs 71-73 of Mr Ngo's affidavit from paragraphs 393-395 of Ms Wang's affidavit or paragraphs 359-361 of Mr Yan's affidavit or vice versa.
Mr Ngo, in cross-examination, gave varying accounts of the manner in which identical paragraphs were included in the affidavits of Mr Yan, Ms Wang and his own affidavit. Mr McInerney, with whom Mr Pokoney appears for 1VD, drew attention to Mr Ngo's evidence in cross-examination as follows:
"Q. The only plausible explanation for the similarity between the affidavits of Mr Yan and Ms Wang of August 2020 is that you copied and pasted parts of Ms Wang's affidavit into Mr Yan's affidavit, correct?
A. As I said, insofar as the representations they say were made to them, yes. But as to the balance, whatever that my instructions, I just follow their instructions.
Q. Are you saying that in respect of the representations, are you saying that there were parts of Ms Wang's affidavit which you copied and pasted into Mr Yan's affidavit?
A. Not copied, but because the content is similar, so I've used that as the phrase that they would have used" (T345)
As Mr McInerney points out, Mr Ngo was then given the opportunity to identify those passages which he regards as containing the "representations", in respect of which he "used that as the phrase that they would have used". He initially identified only paragraphs 70 and 73 of Ms Wang's affidavit as having the character of representational evidence (T347). I then allowed him further time to review the affidavits and identify any other paragraphs to which that characterisation applied and he gave the following evidence:
"Q. Mr Ngo, I understand you've had enough time.
A. Yes. Okay. So, it's paragraph - yes, paragraph 43, 44, 45, 46, 57, 52, 55, 57, 58, 70, 72, 87, 160, 162, 240." (T348)
[11]
The parties' submissions and determination as to matters raising from Mr Yan's and Mr Ngo's evidence
Not surprisingly, Mr McInerney submits that:
"There can be no other plausible explanation for those passages of identical or substantially identical evidence recorded in [Ex P4], other than a conclusion that:
(a) Ms Wang and Mr Yan themselves colluded in their evidence to ensure its consistency; or
(b) Mr Ngo coordinated the evidence of Ms Wang and Mr Yan to ensure its consistency.
The prospect that two witnesses could independently have prepared evidence expressing their recollections in the same way, in the same form, is fanciful. What is fantastic becomes absurd when regard is had to the fact that Mr Yan is a non-English speaker, whilst Ms Wang is. The proposition that the translation of Mr Yan's Mandarin instructions would produce identical evidence to that provided by Ms Wang in English is unmaintainable."
AEN, represented by Mr Santisi and Mr Ngo, addressed these issues at some length in submissions. In the unusual circumstances of this case, I also advised the parties (and Mr Ngo, who was still acting as AEN's solicitor) that I would likely grant leave for Mr Ngo to be separately represented at the point of closing submissions, in the manner permitted by the Court of Appeal in British American Tobacco Australia Services Ltd v Cowell (2002) 7 VR 524; [2002] VSCA 197 at [11], if he wished to seek such leave. Mr Ngo initially indicated, through Mr Santisi, that he wished to take up that opportunity and I adjourned the closing submissions which were to be made on 9 September 2022 to 13 September 2022 to allow him the opportunity to obtain such representation and prepare such submissions. When closing submissions then commenced on 13 September 2022, Mr Santisi indicated that Mr Ngo did not wish to take up the opportunity that had been afforded to him.
Nonetheless, Mr Santisi made detailed written submissions as to these matters under the striking heading:
"… the Credit Issue Raised By The Comparison (Now [Ex P4]) be Reduced Too [sic] Nothing, and Did not Justify the Allegations Made, as Against Mr Yan and especially of An Officer of the Court".
Those submissions commence with the proposition that 1VD, by its Senior Counsel, "sought to make an issue" by cross-examining Mr Yan and then Mr Ngo and raised "very serious allegations" against them both. It seems to me that the issue which I have identified above was not in any sense "ma[d]e" by Mr McInerney but arose from the many identical or substantially identical paragraphs in Mr Yan's and Ms Wang's affidavits, the common errors in their first affidavits, their common corrections in their second affidavits, and the fact that some of the same or substantially the same paragraphs were also reproduced in Mr Ngo's affidavits. That issue was, with respect, an issue that arose from AEN's conduct of its case and cannot be attributed to Mr McInerney.
[12]
The proper construction of the Nomination Deed
I first set out the identified claims before turning to the relevant terms of the Nomination Deed and then to the parties' submissions in that regard. 1VD contends that it has satisfied the requirements for payment of the Final Instalment of the Nomination Fee under the Nomination Deed. Its case is put simply in its Amended Commercial List Statement ("ACLS"), and the complexity of the issues in the proceedings arises not from that case but from AEN's response to it. 1VD pleads (ACLS [3]) the terms of the Nomination Deed; it pleads (ACLS [15]) that the amended plans in the Final DA were prepared in accordance with the Apartment Design Guide, provided for 96 residential apartments and comprised a variation of the apartment mix authorised by cll 24.11 and 25.1 of the Nomination Deed; it pleads (ACLS [16]) that the approval of the Final DA was a Development Approval within the meaning of the Nomination Deed; and it identifies (ACLS [17]-[18]) AEN's obligation to pay the specified amount under item 2(c) of the Schedule to the Nomination Deed, to which I refer below.
AEN contends (CLR [5]), in response, that on a proper construction of the Nomination Deed, before 1VD became entitled to the Final Instalment of the Nomination Fee, the Development Approval had to provide "as a minimum":
"a. No more than 22 apartments that in combination were 1 bedroom apartments and/or 1 sleeping facility apartments and that had no apartment with less than 50 square metres of internal area excluding balcony area; and/or
c. [sic] That did not provide for studio apartments and if it did they would be viewed as a one bedroom apartment and not otherwise as no apartment was to be of less than 50 square metres of internal area."
AEN also seeks a declaration (ACS [4]) that the Nomination Deed contained a term, on its proper construction or had an implied term with the effect that:
"It required [1VD and Mr Coulston] from on or about 22 December 2016 and at all times thereafter to make application to be lodged and any application of it to be lodged or filed such that the Development Approval to be obtained and assigned was one that as a minimum 'did not provide and include for more than 22 apartments with a single sleeping facility namely be they, one bedroom apartments or otherwise defined that there be no more than 22 apartments that allowed for just one sleeping facility as a dedicated sleeping facility or part of an open plan sleeping facility and that in fact no apartment in the mix be less than 50 square metres of internal area (excluding balcony area) in such calculation."
[13]
Determination as to construction of the Nomination Deed
I approach the question of construction of the Nomination Deed in accordance with well-established principles of contractual construction. Mr McInerney submits, uncontroversially, that an objective approach is required to determine the rights and liabilities of a party to a commercial contract, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose; and that the meaning to be given to its terms is determined by reference to what a reasonable businessperson would have understood those terms to mean, having all the background knowledge that would be reasonably available to the contracting parties at the time of the contract, and this requires consideration of the language used in the contract, the surrounding circumstances known to the parties, and the commercial purposes or objects sought to be secured by the contract: Woodside at [35]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [46]; Price v Spoor (2021) 270 CLR 450; 391 ALR 532; [2021] HCA 20 at [27] and [42], where the High Court observed that an objective approach is applied in determining the rights and liabilities of a party to a commercial contract, by reference to its text, context and purpose, and "[t]he meaning to be given to its terms is determined by reference to what a reasonable business person would have understood those terms to mean."
For the reasons I have set out above in dealing with the parties' submissions, it seems to me there is no textual support in the Nomination Deed for the term for which AEN contends as a matter of construction, that the Development Approval had to provide "as a minimum" for "no more than 22 apartments that in combination were 1 bedroom apartments and/or 1 sleeping facility apartments and that had no apartment with less than 50 square metres of internal area excluding balcony area; and/or [sic] that did not provide for studio apartments and if it did they would be viewed as a one bedroom apartment and not otherwise as no apartment was to be of less than 50 square metres of internal area." That clause is inconsistent with the distinction between a one bedroom apartment and a studio apartment to which I have referred above, as a matter of general usage, under the Apartment Design Guide and under the Nomination Deed.
[14]
AEN's further contention that a term should be implied into the Nomination Deed
In determining whether the term for which AEN contends can alternatively be implied, I have regard to the well-known conditions for implication of a term, stated in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282-283; 52 ALJR 20, which require that the term must be reasonable and equitable; the term must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it; the term must be so obvious that "it goes without saying"; the term must be capable of clear expression; and the term must not contradict any express term of the contract. I also have regard to the observations of Mason J in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337; [1982] HCA 24 ("Codelfa"), Mason J observed that, to justify the importation of an implied term it is '"not sufficient that it would be reasonable to imply the term. … It must be clearly necessary". His Honour also observed (at 346) that:
"For obvious reasons the courts are slow to imply a term. In many cases, what the parties have actually agreed upon represents the totality of their willingness to agree; each may be prepared to take his chance in relation to an eventuality for which no provision is made. The more detailed and comprehensive the contract the less ground there is for supposing that the parties have failed to address their minds to the question at issue. And then there is the difficulty of identifying with any degree of certainty the term which the parties would have settled upon had they considered the question."
In Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 at 241; [1986] HCA 14 , the High Court held that a contract there under consideration was "capable of sensible operation in the absence of… implied terms" and that "the appellant's submission amount[ed] to little more than an assertion that the terms are necessary to make the contract work in a manner that will avoid additional liability of the assured".
Those observations were recently applied by the Court of Appeal in Hobhouse v Macarthur-Onslow [2022] NSWCA 158 ("Hobhouse"), where Macfarlan JA drew (at [20], with whom Ward P and White JA agreed) particular attention to the observation of Mason J in Codelfa:
"Accordingly, the courts have been at pains to emphasize that it is not enough that it is reasonable to imply a term; it must be necessary to do so to give business efficacy to the contract. So in [Heimann v Commonwealth (1938) 38 SR (NSW) 691 at 695] Jordan CJ, citing [Bell v Lever Brothers Ltd [1932] AC 161 at 226], stressed that in order to justify the importation of an implied term it is 'not sufficient that it would be reasonable to imply the term. … It must be clearly necessary'. To the same effect are the comments of Bowen LJ in [Moorcock (1889) 14 PD 64 at 68]; Lord Esher MR in [Hamlyn & Co v Wood & Co [1891] 2 QB 488 at 491-492]; Lord Wilberforce in Irwin [[1977] AC at 256]; Scrutton LJ in Reigate v Union Manufacturing Co (Ramsbottom) [[1918] 1 KB 592 at 605-606]."
[15]
AEN's claims for a collateral contract and rectification of the Nomination Deed
I have addressed the construction and implied term claims raised by AEN in its Amended Commercial List Cross-Claim Statement above. I now turn to the other matters raised in AEN's Cross-Claim.
By its Amended Cross-Summons, AEN seeks an order for rectification of cl 24.11(a) of the Nomination Deed by adding the words, "such that no apartment is to be less than 50 metres square in internal area excluding the balcony area in the mix" following the words, "as described in Clause 24.11(a)". AEN also contends (ACCS [13]-[14]) that:
"Further and in the alternative, the Cross Claimant says that at all material times as from 7 December 2016 to 22 December 2016 the parties negotiated an agreement in which the Development Approval to be obtained and assigned would have the smallest apartment size at no less than 50 square meters internal area and excluding the balcony area in such calculation such that no apartment was to be less than such size and that in so far as only one bedroom or one sleeping facility was to be provided that there would be no more than 22 such apartments as providing for only one bedroom and/or one sleeping facility and that in the event there was more than 22 such apartments or any apartment with less than 50 square meters in internal area and excluding balcony area in such calculation, then notwithstanding anything else in the Nomination Deed it was within the discretion of the Cross Claimant and it was so entitled to rescind the Nomination Deed and obtained a refund of the Final Instalment amount.
That in so far as the Nomination Deed does not provide for that, which the Cross Claimant says it does, then the Cross Claimant seeks the orders as to rectification as in the Cross Summons."
It is uncertain whether this pleading is limited to AEN's claim for rectification or whether AEN also here pursues a claim that there existed a collateral contract with 1VD. Mr Santisi did not address the latter claim and it may be that it was not made, or is not pressed, although Mr McInerney responded to it in closing submissions. If that claim is pressed, I do not accept it for the reasons put by Mr McInerney, including that the asserted agreement would be directly inconsistent with the express terms of the Nomination Deed, and would not satisfy the requirement that a collateral contract be consistent with and not contradict or conflict with the terms of the main agreement: Hoyt's Pty Ltd v Spencer (1919) 27 CLR 133 at 147; Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507 at 517; Esanda Ltd v Burgess [1984] 2 NSWLR 139 at 145-146, 152.
[16]
AEN's claims under the Australian Consumer Law
By its Amended Cross-Summons, AEN also seeks further declarations, including declarations in respect of a claim for misleading and deceptive conduct and/or unconscionable conduct under the Australian Consumer Law.
I should briefly refer to the applicable principles in respect of misleading and deceptive conduct and unconscionability. I outlined the applicable principles in a claim for misleading and deceptive conduct in Changizi v Rizaie [2021] NSWSC 613 at [93]-[94] as follows:
"The approach to be adopted in assessing whether conduct is misleading or deceptive was summarised by Gordon J in Australian Competition and Consumer Commission v Telstra Corporation Ltd (2007) 244 ALR 470; [2007] FCA 1904 at [14]-[15], in a passage which Griffiths J followed in Forty Two International Pty Ltd v Barnes (2014) 97 ACSR 450; [2014] FCA 85 at [446] and which I followed in Re Colorado Products Pty Ltd (in prov liq) [(2014) 101 ACSR 233; [2014] NSWSC 789] at [86], as follows:
The relevant legal principles have been well traversed by Australian courts. A two-step analysis is required. First, it is necessary to ask whether each or any of the pleaded representations is conveyed by the particular events complained of … Second, it is necessary to ask whether the representations conveyed are false, misleading or deceptive or likely to mislead or deceive. This is a 'quintessential question of fact'… [citations omitted]
Conduct is misleading or deceptive or likely to mislead or deceive if it is capable of inducing error: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54 . It is not necessary for [the plaintiff] to establish that [the defendant] intended to mislead or deceive and the relevant question is whether, viewed objectively, the relevant conduct was misleading or deceptive or likely to mislead or deceive: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 197 per Gibbs CJ, 216 per Brennan J; [1982] HCA 44; Australian Competition and Consumer Commission v Jewellery Group Pty Ltd (2012) 293 ALR 335; [2012] FCA 848 at [66]. Conduct is likely to mislead or deceive if there is a real and not remote chance or possibility that a person is likely to be misled or deceived, and this is so even though the possibility of that occurring is less than 50 per cent: Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 at [112] per McHugh J; Colorado Products above at [87]; Redmond Family Holdings v GC Access Pty Ltd [2016] NSWSC 796 at [49] ff."
[17]
The declarations and other orders sought by AEN in the Cross-Claim
AEN seeks several declarations in its Amended Cross-Claim Cross-Summons. In addressing these claims, I bear in mind that the Court should not generally make a declaration, even if it has jurisdiction to do so, unless it is satisfied both that the declaration sought is appropriate and that it has sufficient practical utility or where it would merely be prefatory to other relief: Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286; [1974] HCA 18; Attorney-General (NSW); Ex rel Corporate Affairs v Australian Softwood Forests Pty Ltd [1979] 2 NSWLR 73 at 76 per Hutley JA (with whom Reynolds and Samuels JJA agreed); PW Young, C Croft and ML Smith, On Equity (Lawbook Co, 2009) at 1084.
First, AEN seeks, in paragraph 1 of the relief sought in the Amended Cross-Claim Cross-Summons, a declaration that AEN is entitled to specific performance of the Nomination Deed as varied on 29 March 2017 and 24 April 2017 "namely clause 24.2 and 24.11 and the Schedule as such did not merge or stop to be enforceable on rescission for breach". I put aside the fact there is no evidence that the Nomination Deed was varied in the manner assumed by the declaration sought. I cannot make that declaration where it is directed to a hypothetical situation, since AEN has not established a basis to terminate or rescind the Nomination Deed.
Second, AEN seeks a declaration that it is entitled to rescind the Nomination Deed on 6 November 2018 and seeks a release and refund of the Final Instalment of the Nomination Fee. That declaration cannot be made given the findings that I have reached above, and the restrictions on AEN's right to rescind under cl 24.11 of the Nomination Deed, which I addressed above. In any event, this declaration would not have been necessary, so far as the relevant issues have been determined by this judgment and it would be merely anterior to any relief ordered.
Third, AEN seeks a declaration that 1VD was not entitled to raise tax invoices and seek and demand payment of the Final Instalment amount in a specified sum, as it and Mr Coulston had breached the Nomination Deed and failed to perform their obligations under the Nomination Deed by the due date of 26 November 2018 and at all. That declaration cannot be made given the findings that I have reached above. In any event, it would not have been necessary to make that declaration, where the issues are sufficiently determined by this judgment, and that declaration could not be made in the form sought where AEN did not identify the material facts of any breach of Mr Coulston's obligations as guarantor under the Nomination Deed.
[18]
1VD's reliance on an estoppel in reply
For completeness, 1VD also relies on an estoppel in its Commercial List Reply, apparently in the nature of a promissory or representational estoppel of the kind considered in Waltons Stores (Interstate) Ltd v Maher (1998) 164 CLR 387 ("Waltons v Maher") and Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39 ("Verwayen"), in response to AEN's denial of its contractual claims. In its Reply to AEN's Commercial List Response, 1VD repeats paragraph 4(c) of its Commercial List Cross-Claim Response (to which I refer below) and contends that AEN is estopped from rescinding the Nomination Deed, contending that a valid Development Approval cannot provide for more than 22 one-bedroom apartments and studios in total and/or apartments having less than 50 square metres in total area and asserting that the Final DA is not a valid Development Approval within the meaning of cl 24.1 of the Nomination Deed.
1VD's estoppel claim is more fully articulated in its Amended Commercial List Cross-Claim Response (ACCR [4(c)]), where 1VD identifies a number of occasions from August 2018 until October 2018 which it contends amounted to notification to AEN that it intended to change the apartment mix for the purposes of the Development Approval in order to meet Council's requirements, by including studio apartments of less than 50 metres internal area such that there would be greater than 21 one bedroom apartments and studios in total.
1VD refers, first, to a meeting on 9 August 2018 at the offices of 1VD's solicitors, attended by Mr Coulston, Mr Ngo and Mr Huang. Mr Coulston's evidence is that the possible inclusion of studio apartments in the project was first raised at this meeting. Mr Ngo denies that matter was raised at that meeting. On balance, I prefer Mr Coulston's evidence to Mr Ngo's evidence, both because of the view that I have formed as to their respective credit, and because it is likely that it was raised at that meeting, when it was confirmed in a letter dated the next day, 10 August 2018 (Ex P6, 2554) which Mr Coulston emailed, inter alia, to Mr Ngo and Mr Huang on 12 August 2018 (Ex P6, 2555) which also attached amended sketches and a dropbox link providing access to proposed further amended plans. By the attached letter dated 10 August 2018, Mr Coulston put a proposal as to a dispute between the parties as to 1VD's then threat to terminate the Nomination Deed, and then went on to observe that AEN "reserves its right to otherwise vary the apartment/carpark mix in accordance with clauses 24.11, 25.1 & 25.2 including but not limited to the inclusion of A[partment] D[esign] G[uide] compliant studio apartments in order to ensure the DA accords with the Gazettal" (Ex P6, 2555; emphasis added). By email dated 14 August 2018 to Mr Ngo, Mr Coulston requested an urgent response to his email dated 12 August 2018 and provided a further copy of that letter (Ex P6, 2556).
[19]
Orders and costs
For these reasons, 1VD succeeds in its primary claim and AEN fails in its Cross-Claim. AEN must, in the ordinary course, pay 1VD and Mr Coulston's costs of the proceedings, and I note that Mr McInerney has foreshadowed that an order for costs may be sought on a special basis.
I direct the parties to bring in agreed short minutes of order to give effect to this judgment, including as to costs, or otherwise their respective short minutes of order and short submissions as to the differences between them within 7 days of this judgment.
[20]
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: 06 October 2022
Parties
Applicant/Plaintiff:
No 1 Victoria Dragons Pty Ltd
Respondent/Defendant:
AEN Developments Pty Ltd
Legislation Cited (3)
Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015(NSW)
On 23 September 2016, 1VD and Mr Overton, a real estate agent, executed a non-exclusive agency agreement in respect of a development site at Kogarah (Ex D7). In October 2016, Mr Yan and Ms Wang, who are associated with AEN, met with Mr Overton and others, but not Mr Coulston of 1VD, at that development site and commenced discussions concerning AEN's possible acquisition of that development site. AEN, through Ms Wang, then provided undated instructions to its solicitor, Mr Ngo (Ex D1, 7-8) indicating AEN's then commercial objectives or requirements, including that there should be no fewer than 88 units in the project; no fewer than 19 one bedroom units (including 1 bedroom units with a study) with residential carpet area (not including the balcony) no less than 48 square metres each; no fewer than 60 two bedroom units, with residential carpet area (not including the balcony) no less than 75 square metres each; and no few than 9 three bedroom units, with residential carpet area (not including the balcony) no less than 95 square metres each. Those instructions contemplated a total price payable to acquire the development site of $18 million, from which AEN was to deduct $2 million as the five year rent for a ground floor childcare centre (later abandoned) to be leased to 1VD upon completion of the project. An attached list of units referred to 19 one bedroom units, 60 two bedroom units, 9 three bedroom units, for 88 units in total and a total carpet area of 6,536 square metres.
A draft heads of agreement dated 6 December 2016 (Ex D9), which was substantially different from the Nomination Deed later executed by the parties and had been prepared before Mr Coulston of 1VD had met with Mr Yan of AEN, provided for a payment of $500,000 to be made on execution and that the arrangement would be subject to the gazettal of a 4:1 rezoning of the land, after which further payments would be made including to 1VD.
In early December 2016, meetings took place between representatives of 1VD and AEN. An exchange of text messages between Mr Overton and Mr Coulston on 6 December 2016 refers to a first meeting to take place the following day which would be attended by Mr Yan and his solicitor, Mr Ngo, and Mr Coulston (Ex J1, 708). A meeting invitation records the subject of that meeting as the "Victoria Street Kogarah deal" (Ex J1, 710). That first meeting took place on 7 December 2016 at a restaurant owned by Mr Yan, and I address a dispute as to what was discussed in dealing with the affidavit evidence and cross-examination below.
By a subsequent email dated 7 December 2016 (Ex J1, 711), Mr Coulston sent Mr Overton, AEN's solicitor (Mr Ngo), and 1VD's then solicitor (Mr Garling) an updated draft heads of agreement (Ex J1, 712) and confirmed a second meeting for 8 December 2016. That draft heads of agreement recorded the contract price for the land and noted that the total price paid by AEN would be $18 million, equating to $187,500 per hypothetical unit, subject to "a minimum 4:1 F[loor] S[pace] R[atio] at Gazettal; and a minimum 96 units at D[evelopment] A[pplication] approval". That draft heads of agreement also referred to a first payment of $300,000 to be irrevocably released to 1VD upon signing of a share sale agreement (which was not implemented); a second payment of $550,000 to be irrevocably released to 1VD following notice of rezoning of the land to the minimum of a 4:1 floor space ratio and a third payment of $1,350,000 to be irrevocably released to 1VD within seven days of notice of approval of a development application for a minimum of 96 apartments, and also comprising repayment of 1VD's design fees for the development application, agreed to be $200,000. That draft heads of agreement also stated, with a handwritten question mark behind it, that:
"Should less than 96 apartments be approved, $187,500 shall be deducted for each unit less than 96 from the vendor's payment No 3".
A second meeting took place at the offices of 1VD's solicitors on 8 December 2016. Mr Garling made a contemporaneous file note of that meeting (Ex J1, 768) which recorded the attendees as Mr Yan, Ms Wang, Mr Ngo, Mr Overton, presumably in addition to himself and Mr Coulston. He recorded the matters discussed as follows:
" 8/12/16
Tim Overton - agent
Frank Ngo - Lawyer
Mr Yan & Angela
→ SSA or Nomination Deed
→They want a Nomination Deed.
→ Nomination is to occur @ the same time as they are to exercise the call option.
→ Wants confirmation of receipt of all of the option fees, extension fees and legal fees by the vendors.
→ The purchase price/nomination fee will be reduced accordingly to the following formula:
(96 - no. of units approved) x ($18,000,000.00 ÷ no. of units approved)
→ No more than 15% of one bedders
→ No more than 10% three bedders
→ Apartment Design Guide - send to Frank.
→ All apartments to be build in accordance with the A[partment] D[esign] G[uide]
→ For every apartment offered re the D[evelopment] A[pplication] above 96 apartments [1VD] gets an additional $93,750 $80,000 per unit.
→ $20k DD fee comes off payment 1."
That file note does not record any express discussion of any requirement that that there were to be no units smaller than 50 square metres in the development, although the percentage of one and three bedroom units was discussed, or that there were to be no studio apartments, as defined in the Apartment Design Guide, to which I refer below, as "an apartment consisting of one habitable room that combines, kitchen, living and sleeping space". I return to those matters and also address the affidavit evidence as to this meeting below.
AEN was incorporated on or about 8 December 2016 (Ex J1, 771). A second written set of instructions from AEN to Mr Ngo (Ex D1, 63-64), also undated, appears to have been prepared after the incorporation of AEN since it refers to the agreement being signed by the "new company", AEN. Those instructions record that the approval for the development application should include at least 96 units, with average residential carpet area (not including the balcony) of no less than 75 square metres, with no fewer than 19 one bedroom units, no fewer than 68 two bedroom units and no fewer than 9 three bedroom units. They also refer to a staged payment of $300,000 at signing the agreement; $550,000 within 60 days of the approval of 4:1 floor space ratio by the Council; $15.8 million to the land owners within 120 days of that approval; and $1.55 million to 1VD when approval of a development application for the block was obtained, with a deduction of $200,000 for each unit if the vendor could not ensure the number of 96 units with average residential carpet area (not including the balcony) of not less than 75 square metres in the approved development application. That approach was not adopted in the executed Nomination Deed.
On 9 December 2016, Mr Garling sent an email to AEN's solicitor, Mr Ngo, regarding a proposed form of Nomination Deed (Ex P6, 776). On 13 December 2016, 1VD's solicitors followed up with Mr Ngo for an update as to his review of the Nomination Deed (Ex J1, 789). A subsequent draft of the Nomination Deed with the handwritten date of 14 December 2016 (Ex J1, 790; possibly also Ex D5, Tab 1) provided, in a schedule, for a Nomination Fee of $2,196,757, payable in three instalments. Mr Ngo, on behalf of AEN, provided comments on the then draft Nomination Deed on 14 December 2016 (Yan 7.8.20, reaffirmed 1.10.21, [69], [75], [87]; Ngo 7.8.20, [28]). Clause 24.11 of the Nomination Deed then contained an indication of the number of apartments to be included in the development, providing for not more than 15% of one bedroom apartments with not less than 50 square metres of net saleable area; and not more than 10% of three bedroom apartments with not less than 95 square metres of net saleable area. There was no specific reference to studio apartments in those instructions, although I recognise that a studio apartment would ordinarily be of a lesser size.
Several further drafts of the Nomination Deed were then exchanged between the parties' solicitors. By an email dated 15 December 2016 (Ex J1, 1124; Ex D5, Tab 2), Mr Ngo sent Mr Garling a draft Nomination Deed with proposed amendments which included deleting a provision excluding any representation or warranty in relation to the development application or development approval and amending cl 24.11 of the draft Nomination Deed to provide for not less than 15% but not more than 20% of one bedroom apartments being not less than 50 square metres internal area (excluding balcony area), not less than 70% of two bedroom apartments and not less than 8% but not more than 10% of three bedroom apartments. AEN also sought to obtain a warranty, which 1VD did not give, that the development application would have an approved gross floor area of not less than 8,251.56 square metres.
On 19 December 2016, Mr Garling sent Mr Ngo a further mark-up of the draft Nomination Deed (Ex J1, 1178; Ex D1, 176-203), subject to 1VD's instructions, and additional documents. Clause 24.11 in that draft Nomination Deed further amended the number of apartments and introduced a proviso that the apartment mix "will at all times be subject to all statutory, authority and Council requirements" and acknowledging that the apartment mix "may be varied pursuant to the requirements of the relevant statutory, authority and Council requirements" and that AEN would not be entitled to make any objection, requisition, claim, rescind or terminate the Nomination Deed as a result of that matter. I will refer to this proviso, which was substantially retained in the executed Nomination Deed after negotiation, as the "variation proviso", and it prevented an exercise of AEN's rights adverse to 1VD in respect of a variation of the apartment mix in the specified circumstances.
Mr Ngo forwarded documents including the draft Nomination Deed to Mr Yan's personal assistant, Ms Wang, on 19 December 2016 (Ex J1, 1206). By email dated 20 December 2016 (Ex J1, 1211), Mr Ngo advised 1VD's solicitor that Mr Yan would arrive in Australia that day; Mr Ngo would meet Mr Yan that afternoon to discuss the Nomination Deed and all other outstanding issues; and Mr Ngo's timeframe was to "get everything done" by close of business on 21 December 2016.
A third set of instructions (Ex D1, 65) from AEN to Mr Ngo are also undated and were likely provided shortly before execution of the Nomination Deed, since they raise the possibility of that Deed being signed in both the English and Chinese languages, which was then raised by Mr Ngo shortly before that Deed was ultimately executed only in an English language version. Those instructions provided that:
"… The vendor should ensure that the DA approval should include at least 96 units. Among the 96 units, each of the 1-bedroom unit should have net interior area (not including the balcony) of no less than 50 square metres. In addition, the number of 1-bedroom units should be between 15% and 20% in the total of 96 units.
Each of the 3-bedroom unit should have net interior area (not including the balcony) of no less than 90 square metres. In addition, the number of three bedroom units should be between 8% and 10% in the total of 96 units.
Each of the 2-bedroom unit should have net interior area (not including the balcony) of no less than 70 square metres. In addition, the number of 2-bedroom units should be no less than 70% in the total of 96 units."
There is again no reference to studio apartments in those instructions, which referred to a total price of $18.2 million, with $300,000 payable within 5 days of signing the agreement, $550,000 payable within 60 days of the approval of "1:4 plot ratio" [sic] by the Council, $15.8m payable to the land owners within 120 days of such approval, and the balance of $1.55 million payable to 1VD within 15 working days of the approval of the development application for the agreed land block, with a reduction of $190,000 for each unit not approved if the vendor could not ensure 96 units in the approval of the development application, and an additional $65,000 payable for each unit approved in excess of 96 units.
By email dated 21 December 2016, Mr Ngo sent proposed amendments to the Nomination Deed to 1VD's solicitor (Ex J1, 1244; possibly also Ex D5, Tab 4) and proposed that the Nomination Fee be $20,000, which had already been paid, and the remaining $2,249,736 be dealt with as selling commission payable to 1VD. The amendment sought to exclude the variation proviso in cl 24.11 of the Nomination Deed. The request to exclude that provision supports an inference that AEN, or at least Mr Ngo, had by then rightly recognised that that proviso qualified 1VD's obligations and limited AEN's capacity to terminate or rescind the Nomination Deed or avoid payment of the Final Instalment of the Nomination Fee if the apartment mix was varied adversely to its interests in the specified circumstances. AEN was not successful in excluding that provision and ultimately executed the Nomination Deed in a form that limited its rights in that way.
Also on 21 December 2016, a dinner took place at the Golden Century Chinese restaurant in Sydney attended by Mr Yan and Ms Wang of AEN, Mr Overton and his wife Ms Chen, and Mr Coulston of 1VD, apparently anticipating a successful transaction. A photograph recorded Mr Coulston holding a cheque in payment of the first instalment of the Nomination Deed at that dinner (Ex J1, 1407).
By a handwritten note dated 21 December 2016 (Ex J1, 1243), Mr Garling recorded events on that day as follows:
"A number of phone calls between [Mr Coulston]/[Mr Ngo] and [Mr Overton] and then dinner @ Golden Century.
Discussion points:
1. The formula re the 96 units. They were trying to delete the uplift clause entirely. [Mr Coulston] would not agree. Parties at dinner agreed that would only be an uplift if [Mr Coulston] [?] more than 96 apartments and another storey on the building. Agreed a sliding scale of prices as well.
2. They wanted our paragraph below the apartment mixed clause deleted. [Mr Coulston] wouldn't agree. The parties agreed that there could not be more than 22 one (1) bedroom apartments, and the ratio of 3 bedroom apartments shifted by 1%. Our paragraph to remain.
3. Release of funds agreed to be on nominees' solicitor approval, however this not to be unreasonably withheld.
4. Gave us cheque and shook hands on the deal."
The correspondence between 1VD's solicitors and AEN's solicitors between 7 December 2016 and 22 December 2016, and the draft Nomination Deeds, refer to the inclusion of one, two and three bedroom apartments but do not refer to any requirement that there be no apartments smaller than 50 square metres in the development or that there be no studio apartments in the development for which, as I noted above, AEN now contends.
On 22 December 2016, Mr Garling sent Mr Ngo an updated draft Nomination Deed (Ex J1, 1584; possibly also Ex D5, Tab 5) subject to final instructions, and a copy of the deposit slip for the bank cheque provided by AEN to 1VD on account of the first instalment of the Nomination Fee. Clause 24.11 of that draft continued to include the variation proviso protecting a variation of the apartment mix in the specified circumstances, although additional words were added acknowledging that the development approval may not contain more than 22 one bedroom apartments, and providing for a refund of the Final Instalment of the Nomination Fee if that occurred. Again, there was no reference to studio apartments, where the parties had apparently not turned their mind to that question at that time.
Also on 22 December 2016 at 11.48am, Mr Ngo sent Mr Garling a further draft Nomination Deed (Ex P6, 1614; possibly also Ex D5, Tab 6), the changes to which do not appear to affect cl 24.11 of the Nomination Deed. On the same day at 1.47pm, Mr Garling sent Mr Ngo a further draft Nomination Deed (Ex J1, 1673; possibly also Ex D5, Tab 7). At 3.15pm on 22 December 2016, 1VD's solicitor sent Mr Ngo the final version of the Nomination Deed for execution by AEN, which included a definition of the term "Apartment Design Guide" and included cl 24.11 in its final form (Ex J1,1738; the document may be the same as that at Ex D5, Tab 8, other than for different footers),
1VD and AEN then executed the final version of the Nomination Deed (Ex P2, 1339, 1368). I will address the terms of the executed Nomination Deed in dealing with issues of construction below. It is common ground that, on 22 December 2016, AEN paid the Nomination Fee into the trust account of a firm of solicitors (1VD's Amended Commercial List Statement ("ACLS") [4]; AEN's Commercial List Response ("CLR") [6]). AEN contends the Nomination Deed was later varied on 29 March 2017 and again on 29 April 2017 (CLR [2]); however, there is no evidence that the relevant variation agreements were executed.
On 26 May 2017, the Kogarah Local Environmental Plan 2012 (Amendment No 2) (New City Plan for Kogarah) ("LEP") was gazetted (Ex P2, Vol 2 Tab 3). The LEP provided, inter alia, for the introduction of Zone R4 High Density Residential which permitted, inter alia, residential flat buildings with consent. Clause 1.2 of the LEP provided that it sought "… to encourage a diversity of housing choice suited to meet the needs of the current and future residents of Kogarah"; cl 2.3 deals with zone objectives and the "Land Use Table", and that table refers to an objective "to provide a variety of housing types within a high density residential environment"; cl 4.3 provides for the maximum height of buildings by reference to a "Height of Buildings Map" and it is common ground the permissible maximum height was 33 metres; and cl 4.4 provides for the floor space ratio by reference to a "Floor Space Ratio Map", which it is common ground was a maximum 4:1 ratio.
Shortly after the LEP took effect, on 2 June 2017, 1VD lodged a development application for the property with Georges River Council ("Council") (Ex P2, 1870). It is common ground that application was prepared in accordance with the Apartment Design Guide and contained an apartment mix within the range provided in cl 24.11 of the Nomination Deed (ACLS [6], CLR [8]). The relevant design drawings, in version J dated 1 May 2017 (but also recording a date of 19 September 2016) (Ex D1, 412) provided for 17 one bedroom units, 71 two bedroom units, and 8 three bedroom apartments, totalling 96 units, within a building that exceeded the applicable height limit under cl 4.3 of the LEP and could only proceed if Council or the Land and Environment Court did not apply it. That version of the drawings did not include the studio apartments to which AEN objects, where Council's requirement for an apartment mix including studio apartments was not introduced until January 2018, a matter to which I return below.
It is also common ground that further project drawings, in versions K to U, prepared between July 2017 and 4 September 2018 also provided for an apartment mix that would have complied with cl 24.11(a)-(d) of the Nomination Deed, without need to rely on the variation proviso, and provided for 96 apartments. For example, version U provided for 19 one bedroom apartments, 65 two bedroom apartments, 12 three bedroom apartments and 105 car parking spaces (Ex D1, 971-1002), in a building that exceeded the applicable height limit under cl 4.3 of the LEP and could only proceed if Council or the Land and Environment Court did not apply that limit.
Council did not approve the development application as lodged in June 2017 and, by 14 July 2017, it was deemed to have refused that development application (ACLS [7], CLR [9]). On 17 July 2017, 1VD commenced Class 1 appeal proceedings in the Land and Environment Court ("LEC proceedings") concerning that deemed refusal (ACLS [8]; CLR [10]; Ex P2, 1874). Mr Yan says that he was first advised of the LEC proceedings on 18 July 2017; no claim for any breach of the Nomination Deed in that regard is raised by AEN's Amended Commercial List Cross-Claim Statement ("ACCS").
On 14 September 2017, Council filed a Statement of Facts and Contentions ("SFC") in the LEC proceedings (ACLS [9]; CLR [11]; Ex P2, 1892) which contended that the height of the proposed building exceeded the mandated LEP height limit of 33 metres by approximately 4 metres and identified an issue as to setbacks to the street and adjoining sites (Ex P2, 1909). On 3 October 2017, Mr Coulston emailed Mr Ngo regarding lodgement of the development application and Council's SFC (Ex P6, 1944) and advised that:
"Whilst of course disappointing that Council's current prevailing view is that our DA should be refused, we are in the process of responding to Council's SOFAC. This may well necessitate some changes to the submitted DA in line with Council's stated contentions, however this should also provide us with a better chance of approval."
The Kogarah DCP 2013 - Amendment No 2 - Kogarah North Precinct ("DCP") was then adopted by Council in late 2017 and came into effect on 10 January 2018 (Ex P2, Vol 2, Tab 4) and applied to the Kogarah North Precinct. Section 14, dealing with housing choice, identifies the objectives of ensuring the provision of a "range of housing types" and "a suitable mix of dwellings that encourages social diversity within the development and addresses the needs for future residents and households" and, under the heading "Controls" provides that:
"(i) All residential development (or residential component within a mixed development must provide a mix of studio, one bedroom, two bedroom and three bedroom apartments of a range of sizes and layouts so as to meet the needs of residents and accommodate a range of household types.
(ii) An apartment mix is to be provided, taking into consideration:
(a) the distance to public transport, employment and education centres;
(b) the current market demands and projected future demographic trends;
(c) the demand for social and affordable housing;
(d) different cultural and socio-economic groups;
(iii) Apartment configurations are to support diverse household types and stages of life including single person households, families, multi-generational families and group households."
On 13 April 2018, 1VD filed a Notice of Motion in the LEC proceedings seeking leave to rely on amended plans ("Amended DA") (Ex P2, 2077), which included 96 apartments across 11 residential levels, comprising 15 one bedroom apartments, 73 two bedroom apartments and 8 three bedroom apartments. It is common ground that the Amended DA was prepared in accordance with the Apartment Design Guide and also contained an apartment mix within the range contemplated by cl 24.11 of the Nomination Deed, although AEN contends that it was not provided a copy of it (ACLS [10]-[11]; CLR [12]-13]).
On 23 April 2018, Mr Coulston emailed Mr Ngo advising that:
"Ahead of our proposed meeting on Wednesday this week, please see below a link to the updated information regards to Victoria Street, Kogarah.
I confirm we are doing our best to have this project DA approved for Mr Yan. I also confirm that we're aware of all of our obligations relating to the contract and all changes made since our original DA have been made at the written direction of Coun[ci]l. We would be pleased to show such evidence as required after we meeting [sic] with Mr Yan and yourself this wed." (Ex P6, 2493)
By a further email dated 25 April 2018, Mr Coulston sent Mr Ngo a schedule of modifications which he described as "specific changes which have been driven by Council" and indicated that he would also bring a full plan set to the meeting (Coulston 26.8.22, Annexure G).
On 26 April 2018, Mr Coulston met with Mr Yan and Mr Ngo at Mr Ngo's office in Sydney (Ex P6, 2493). By email dated 29 April 2018, marked "without prejudice" but tendered (Ex D11, 2495) without objection, Mr Coulston advised Mr Ngo he understood from the meeting with Mr Yan and Mr Ngo that:
"… we are all in agreement to proceed with the current set of plans which I tabled with you. It's also agreed that we'll deal with the issue of seeking additional parking (up to 130 cars) after approval of our current plan set. Just further to this point, please see below an email from Council to our planning lawyer regards to the car parking issue as it now stands. Note that if we were to go for 130 cars now, all car parking area over 81 car parks would be included in the F[loor] S[pace] R[atio] and hence we'd risk losing 7 or 8 units also of course jeopardise the whole approval process."
On 23 May 2018, Council filed an Amended Statement of Facts and Contentions ("ASFC") in the LEC proceedings in response to the Amended DA, identifying objections to the Amended DA including that the height of the proposed building was not justifiable and contributed to the bulk and scale of the development, and (at part 2.2 Built Form and Scale) that the Amended DA should be refused because it was unacceptable in terms of its built form and scale, and did not meet the Built Form and Scale principles (Apartment Design Guide Principle 2), and that "[t]he proposal exceeds the [LEP] planning control for building height by approximately 28%", and "exceeds the [LEP] planning control for F[loor] S[pace] R[atio] by approximately 26m2". Council also there contended the development included insufficient car parking; there were public interest reasons not to approve the development including site isolation and sterilisation of adjacent properties, overshadowing, loss of views, loss of privacy, poor aesthetics, increasing traffic and parking problems in area and a failure to meet the strategic intent of the DCP; and the apartments did not provide adequate amenity in accordance with Principle 6 of SEPP 65 and the Apartment Design Guide (ACLS [12]; CLR [14]; Ex P2, 2498). On 26 May 2018, Mr Coulston sent Mr Ngo a copy of the ASFC (Ex P6, 2519).
On 24 July 2018 the Land and Environment Court handed down its decision in Regent Land Pty Limited atf Regent Land Unit Trust v Georges River Council [2018] NSWLEC 1370, concerning the first application for a development application for a high rise development in the Kogarah North Precinct. Commissioner Smithson rejected that application because that development exceeded the maximum height of 33m and the requirements of cl 4.6 of the LEP to vary the height exceedance were not met, and because its floor space ratio exceeded the maximum permissible floor space ratio of 4:1. The approach there taken by the Land and Environment Court was obviously relevant to the prospects of 1VD obtaining development approval for the project in its then form and 1VD's architect, Mr Dickson, had regard to it in preparing amended plans for the development that reduced its height.
On 8 August 2018, Mr Dickson, suggested to Mr Coulston that the then development application be further amended to reduce the height of the building by two storeys to meet height restrictions and deliver the apartment mix required under cl 14 of Pt E4 of the DCP by including studio apartments (Ex P6, 2546). I will address Mr Dickson's evidence of that recommendation below. On 9 August 2018, Mr Coulston sent amended sketches to Mr Dickson which included studio apartments (Ex P6, 2550) and, on the same day, Mr Dickson sent Mr Coulston an email dealing with potential amendments to the Amended DA including variations to the apartment mix to achieve compliance with the Apartment Design Guide (Ex P6, 2551). A meeting then took place on that date at the offices of 1VD's solicitors, attended by Mr Coulston, Mr Ngo and Mr Huang, who was an adviser or consultant to AEN. Mr Coulston's evidence is that the possible inclusion of studio apartments in the project was first raised at this meeting. I return to that meeting in dealing with 1VD's estoppel claim below.
On 12 August 2018, Mr Coulston sent an email to, inter alia, Mr Huang and Mr Ngo (Ex P6, 2555) attaching amended sketches, a dropbox link providing access to the proposed further amended plans, and a letter (Ex P6, 2554) dated 10 August 2018, which stated (in part) that 1VD:
"reserves its right to otherwise vary the apartment/carpark mix in accordance with clauses 24.11, 25.1 & 25.2 including but not limited to the inclusion of A[partment] D[esign] G[uide] compliant studio apartments in order to ensure that the DA accords with the gazettal".
By email dated 14 August 2018 to Mr Ngo, Mr Coulston to Mr Ngo requested an urgent response to that email dated 12 August 2018 (Ex P6, 2556). I return to these emails in dealing with 1VD's estoppel claim below.
On 17 August 2018, 1VD filed a Notice of Motion in the LEC proceedings seeking orders that the proceedings be expedited or allocated a compressed timetable (Ex P6, 2561).
On 21 August 2018, Mr Coulston emailed Mr Ngo regarding the extension of the DA Sunset Date (as defined) under the Nomination Deed and the proposed amendments to the plans to satisfy statutory and Council requirements necessary for approval (Ex P6, 2594). On the same date, Mr Coulston emailed Mr Dickson regarding amendments to the then Amended DA (Ex P6, 2595). On the same day, Mr Coulston emailed Ms Ware, director of legal services and general counsel at Georges River Council, foreshadowing variations to the apartment mix by including studio apartments to comply with statutory and Council requirements (Ex P6, 2596), as follows:
"Until recently we stayed with the higher scheme due in part to earlier general consentient [sic] to it in the s.34. We incorrectly thought perhaps your experts might stick with this as being a better planning outcome as it seemed the Councillors were perhaps politically motivated to vote against height late last year. I got that wrong and so that's my fault.
The recent Regent St determination of course made it abundantly clear how wrong that strategy was. So since then at our end its been full steam to provide plans at 33m and with a lower F[loor] S[pace] R[atio] - in accordance with the conditions of the Regent St determination. These will be fully compliant plans which will be much lower in height, have greater setbacks, less parking and provide less of an isolation issue (this will be achieved in large part by reducing height and providing a greater apartment mix with introduction of Studio's therefore providing less built space). I'm sure its this haste and also my sunset deadlines which have led in large part to these extra contentions of late (i.e. today). For this I apologise.
As I said today, there is no point in furthering plans which are in dispute and have no chance of being approved. Whilst I know protocol must be followed, I really hope that once our LEP, A[partment] D[esign] G[uide] and largely DCP compliant plans are properly tabled that we can more peacefully look to conclude the matter. Whilst I'll accept our shortcomings to date, I do sense a level of animosity between the parties that I'm not convinced should be there and which I can't quite put my finger on why it exists to the extent to which it seems to. If there's anything we've done to cause this or if we can do anything to help resolve it, please let me know as it troubles me greatly." [emphasis added]
It is plain from that email that 1VD was then seeking to address Council's continued opposition to the development application in the LEC proceedings at least by reducing the height of the development to comply with the 33 metre limit under cl 4.3 of the LEP, which would necessarily require a change in the number or size of the apartments or both, and address the question of the apartment mix requirement under the DCP.
Ms Ware responded on the same day (Ex P6, 2598) in a manner that recognised the delay in the LEC proceedings but also made clear that Council continued to require that the development not exceed the maximum height requirement under the LEP and also gave weight to compliance with the Apartment Design Guide, and otherwise appeared supportive of 1VD's changed approach:
"Council is committed to ensuring high quality residential flat buildings for this new precinct. The area is very important to Council, having been ear-marked strategically by the State Government and indeed identified by the former Kogarah Council as appropriate for high density.
I can understand your frustration. Two vacations of hearing dates in one matter has not occurred in any case in which I have been involved for 25 years. I acted for developers for 20 years and understand and appreciate your commercial drivers.
Council's view is that the Regent Land decision is clear that height controls cannot be ignored in pursuit of the F[loor] S[pace] R[atio] (which is a maximum). Council will continue to press the position of compliance with height and F[loor] S[pace] R[atio], which, frankly, has been our position since adoption of the DCP in January. Particular attention is to be given towards Councils Statement of Facts & Contentions (SoFACS). LEP and A[partment] D[esign] G[uide] compliance is essential, however so too is compliance with the desired future character provisions of the Kogarah North Precinct. Your suggested approach with fully compliant plans sounds like the right one to me.
Council is not being overly bureaucratic in its approach. It is keen to ensure good outcomes for the community. On 5 July 2018, I entered into a s34 agreement on behalf of Council with another applicant on a site in the precinct. This saved both parties significant costs. Council and applicants can work together in this area an indeed throughout the LGA. I think, generally, you will find that I have a reputation for trying to ensure, where appropriate, and acting in the bests interests of Council conciliated outcomes which result in the best possible development." (emphasis added)
On 22 August 2018, Mr Dickson's firm emailed Mr Coulston an amended set of drawings incorporating studio apartments (Ex P6, 2601) and, on 23 August 2018, Council filed an Agreed Statement of Facts in the LEC proceedings (Ex P6, 2615). On 24 August 2018, Mr Coulston emailed Mr Ngo regarding revocation of a termination notice previously given by 1VD (to which tangential reference was made in these proceedings) and an extension of the DA Sunset Date under the Nomination Deed (Ex P6, 2631); on 30 August 2018, he emailed Mr Ngo claiming that 1VD continued to work in good faith in accordance with Nomination Deed in order to obtain approval (Ex P6, 2633); and, on 1 September 2018, he emailed Mr Ngo attaching a letter providing an update on the progress of the development application (Ex P6, 2636). AEN contends that letter represented that the development application as agreed was being prosecuted and that was a "false statement"; however, no such claim is raised by AEN's Amended Commercial List Cross-Claim Statement.
On 7 September 2018, 1VD filed a Notice of Motion in the LEC proceedings seeking leave to rely on further amended plans ("Further Amended DA"), which reduced the height of the building from 11 to 9 storeys, and reconfigured the apartments in the building to provide a residential gross floor area of 7,284 sqm consisting of 96 apartments, made up of 17 studio apartments, 21 one bedroom apartments, 54 two bedroom apartments and 4 three bedroom apartments (Ex P6, 2638).
On 9 September 2018, Mr Coulston emailed Mr Ngo requesting a response to his email dated 1 September 2018 (Ex P6, 2646). AEN contends this email was "[f]urther misleading conduct" where 1VD's actions of 7 September 2022 are not disclosed, but no such claim is raised by its Amended Commercial List Cross-Claim Statement. Version V of the project drawings, dated 19 September 2018, reflects a reduction in the height of the building to comply with cl 4.3 of the LEP and a change in the apartment mix in a manner that improves compliance with the apartment mix requirements of the DCP. It provides for 17 studio apartments; 21 one bedroom apartments; 54 two bedroom apartments, 4 three bedroom apartments and 97 car parking spaces, and reduces the gross floor area to about 7,250 square metres and reduces the floor space ratio below 4:1 ratio as a result of reducing the height of the building and providing street setbacks (Ex D1, 1123).
On 23 September 2018, Mr Coulston emailed Mr Huang and Mr Ngo providing an update regarding the development application approval process, including the reduction in height and variation of the apartment mix, which formed part of the orders ultimately made in the LEC proceedings approving the final version of the development application ("Final DA") (Ex P6, 2647). He initially referred to a negotiated outcome that had been achieved with Council in respect of another project and then observed that:
"In short, the planning process continues to be a nightmare, with Council making things very hard. The L&E Court has also set a clear precedent that they (nor Council) will not accept any height exceedance except for lift overruns and communal open space on the roof top.
In order to agree an outcome with Council and obtain an approval for Palmerston St, the following concessions were required by Council:
1. Reduce height to 10 storeys (from our earlier proposed 12 storeys);
2. Change of unit mix to reduce from proposed 67 apartments to 51 apartments and 6 studio serviced apartments (in order to achieve our required street setback, otherwise we would have lost a lot more units);
3. Allocation of a 10% key worker housing.
This has obviously impacted the returns from the project, however our legal option [sic] was that we would have lost in the L&E Court hearing and so this negotiated outcome was deemed to be the best outcome given the issues at hand.
We are now working up revised plans for Victoria St and would welcome the opportunity to review these with you at a mutually convenient time. Please let me know when may work for you?"
I refer to Mr Coulston's evidence of a conversation with Mr Ngo on the next day in dealing with the affidavit evidence below.
On 26 September 2018, Mr Coulston emailed Mr Ngo outlining the Council's remaining issues with the Final DA, and stating that one of the strategies being used was the inclusion of smaller Apartment Design Guide compliant studio apartments into the apartment mix (Ex P6, 2648). He there observed that:
"The good news is we're quietly confident in our ability to provide an approved scheme in keeping with the Deed and providing 96 apartments in the near term. This will yield no more than 22 x 1 BR apartments (which is a strict condition of our Deed), however may otherwise require the mix to be amended in order to comply with Council requirements and to achieve the require yield and otherwise comply with the LEP and with the Apartment Design Guide. We understand the Deed to be quite clear that the apartment & carparking mix is at all times subject to statutory and Council requirements and that (whilst we'd prefer not to make changes - as these continual changes cost me a fortune in design, legal and planning fees) the Nominator has the ability to make such changes as required by Council in order to make the DA accord with the LEP and A[partment] D[esign] G[uide]. That said, we're doing out level best to achieve the desired outcome in terms of unit and car parking mix. In particular, Councils view as to parking is really varied and so far we've had a number of difference views expressed to us by Councils parking expert. Needless to say, we'll end up with the best outcome we can in this regard.
We're hopeful that this matter can be resolved by way of a section 34 agreement at or before the currently listed hearing dates. When our working set of DA plans are finalised (after further discussion and direction by Council) we will send a set across for your review. Should you wish us to discontinue our efforts to seek an approval, please advise asap as it is indeed a very expensive and time consuming process."
I return to that email in dealing with AEN's estoppel claim below.
On 4 October 2018, Mr Dickson's firm emailed amended architectural plans for inclusion in the Final DA to Mr Coulston (Ex P6, 2654) and, by email dated 5 October 2018, Mr Coulston sent Mr Ngo a copy of those plans (Ex P6, 2656, 2658) and advised that those plans:
"continue to respond to Council's requirements in order to make the DA accord with the LEP and A[partment] D[esign] G[uide] and our deed generally."
On 14 October 2018, Mr Coulston advised Mr Ngo that approval was likely to be obtained in accordance with the final architectural plans sent to Mr Ngo on 5 October 2018 (Ex P6, 2717). I return to these emails in dealing with AEN's estoppel claim below.
On 17 October 2018, Council and 1VD reached agreement for approval of the Final DA at a conciliation conference under s 34 of the Land and Environment Court Act 1979 (NSW) (Ex P2, 2718) and they then requested the Land and Environment Court dispose of the proceedings by granting leave for 1VD to rely on amended plans, drawings and documents as specified. The Land and Environment Court made the requested orders on 23 October 2018 (Ex P2, 2896).
On 25 October 2018, 1VD's solicitors sent AEN's solicitors a letter advising of the approval of the Final DA by the orders made in the LEC proceedings and calculating the Final Instalment of the Nomination Fee payable under the Nomination Deed as $1,419,736 plus GST. That letter enclosed a tax invoice claiming development approval cost of $200,000 plus GST and attached a copy of the "Final Development Approval comprised of the Notice of Orders made by the Land and Environment Court of New South Wales in case number 2017/00217118" and a zip file with copies of tax invoices incurred by 1VD in respect of the development application in excess of $200,000 plus GST (Ex P2, 2953). 1VD contends, and AEN denies, that the approval of the Final DA was a Development Approval within the meaning of the Nomination Deed and that the Final Instalment of the Nomination Fee calculated in accordance with item 2(c) of the Schedule to the Nomination Deed is $1,419,736. 1VD also pleads that it has incurred reasonable consultant costs for the preparation of the development application, in excess of $200,000 plus GST and claims payment of that amount.
Mr Coulston then met with Mr Ngo and with Mr Yan's wife and daughter on 5 November 2018 and recorded what occurred at that meeting in an email (Coulston 26.8.22, Annexure E) to his solicitor on the same day. He observed that:
"Whilst it was pleasant enough, there was general disagreement regards to the apartment mix. In particular Frank [Ngo] felt the studio's [sic] should account for 1BR's and by his logic we therefore breach the 1BR maximum set in clause 24. We've done good research on this and feel confident that studio's [sic] apartments are not 1 BR's and are clearly recognised in the Apartment Design Guide, which the deed references and relies upon. He said he will seek an instruction from Mr Yan and will get back to us."
It is common ground that, on 6 November 2018, AEN's solicitor sent a letter to 1VD which purported to rescind the Nomination Deed.
By letter dated 6 March 2019, the then solicitors for 1VD noted the dispute between 1VD and AEN in relation to the Nomination Fee and indicated they would abide any Court order that bound the parties to the Nomination Deed and not release the Nomination Fee unless pursuant to a Court order or an agreement between the parties to the Nomination Deed (Ex P1).
I also note the matters relevant to the assessment of spoken words in the context of a contractual dispute, which were identified by Hammerschlag J (as his Honour was then) in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [95]:
"Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR 691 at 712; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (1995) 49 NSWLR 315 at 319."
I also bear in mind the observations of Bell P (as the Chief Justice then was, with whom Bathurst CJ agreed) in ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24 at [27]-[29]:
"Whilst the quality and accuracy of oral recollection of actual conversations should be treated with care and caution given the fallibility of human memory (of which there has been a growing appreciation within the judiciary in recent decades), oral testimony may still be of value and importance, as was recognised in the nuanced observations of Leggatt J (as his Lordship then was) in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC (Comm) 3560 at [22] (Gestmin):
"the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose - though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth." (emphasis added)
Documents and events have to be understood in their context, and evidence of context will often be furnished by witnesses in their oral evidence. Documents, moreover, will not always present a complete picture of events. Indeed it would be rare that they do. Nor do contemporaneous documents necessarily or invariably convey or record the background or context in which events took place. That background or context will be familiar to the actors at the time of those events but may not always emerge from documents."
I have here also drawn on my summary of the applicable principles in Re Atlas Advisors Australia Pty Ltd [2022] NSWSC 705 ("Atlas") at [5].
By his second affidavit dated 29 August 2022, Mr Dickson referred to a number of further documents, including a summary of the Nomination Deed which had been provided to him in September 2017. By his third affidavit dated 31 August 2022, Mr Dickson referred to the statutory requirements to which he had regard in drafting relevant plans, and the objectives which he had sought to achieve in doing so.
Mr Dickson was cross-examined at substantial length by Mr Santisi who appears for AEN. He was cross-examined at length as to many design drawings for the project (Ex D1) which demonstrated, unsurprisingly, that the design drawings provided for a building of greater height, which did not contain studio apartments, until they were amended in the course of the LEC proceedings to provide for a building of lower height and to introduce provision for studio apartments at the same time. I have referred to several of those drawings in the chronology which appears above.
Mr Dickson presented as highly experienced and knowledgeable in respect of architectural and planning matters and I formed the view that he was a plainly honest witness doing his best to assist the Court. He provided some relatively fulsome answers to questions, but I am satisfied that he did so in order to assist the Court in understanding the relevant requirements and the process which he adopted. There was no apparent basis for Mr Santisi putting to Mr Dickson, as he did, that he had been untruthful in his evidence to the Court; it was not surprising that Mr Dickson did not accept that proposition; and I also do not accept that proposition. Mr Dickson's cross-examination supports a finding that the change in apartment mix made by 1VD was prompted by the wish to reduce the height of the building so as to comply with the 33 metre height limit, maintain the number of apartments in the building at 96 apartments and comply with the apartment mix requirement under the DCP in a manner which Mr Dickson believed would have architectural merit, by placing studios next to other apartments within a "dual key" design. Not surprisingly, Mr Dickson accepted, and I find, that that amendment in the design was prompted by the need to comply with required height limit, as well as by the perceived advantage of complying with the apartment mix requirement in the DCP in persuading Council to consent to the grant of development approval in the LEC proceedings, as it did after that change was made. I will address the consequences of that finding below.
1VD relies on five affidavits dated 17 January 2020, 5 February 2021, 8 March 2021, 26 August 2022 and 7 September 2022 of its director, Mr Coulston. Mr Coulston's first affidavit was directed to the relatively narrow contractual claim brought by 1VD against AEN, before the issues in the proceedings were substantially expanded by AEN's Amended Commercial List Cross-Claim Statement. Mr Coulston there referred to 1VD's entry into option deeds in relation to the several properties at Kogarah, between late December 2014 and mid-July 2015, and the entry into the Nomination Deed with AEN on 22 December 2016. Mr Coulston also referred to relevant statutory instruments and Council requirements in respect of the design of the development, including SEPP 65, the Apartment Design Guide, and to the lodgement of the development application with Council on 2 June 2017. He addressed subsequent steps in the LEC proceedings including 1VD's Notice of Motion seeking leave to rely on amended plans filed in the LEC proceedings on 13 April 2018, and ongoing negotiations, discussions and joint conferences between expert witnesses, 1VD and Council. Mr Coulston also referred to the requirements of the DCP, the further Notice of Motion filed by 1VD on 24 July 2018 seeking to rely on further amended plans and an email sent by Mr Dickson, on 9 August 2018, regarding amendments to the Amended DA including variations of the apartment mix to achieve compliance with the Apartment Design Guide, and to subsequent correspondence with Mr Huang, an adviser or consultant to AEN as I noted above, and with Mr Ngo as AEN's solicitor. Mr Coulston also refers to further correspondence with Council and with 1VD's architect, Mr Dickson and employees within his firm, and further correspondence to Mr Ngo on behalf of AEN.
Mr Coulston also referred to a conversation, about 24 September 2018, with Mr Ngo relating to the Final DA. Mr Coulston's evidence is that he had a conversation on the next day with Mr Ngo relating to the Final DA (Coulston 17.1.2020, [82]), as follows:
Coulston: "Frank, I just wanted to keep you informed about the proceedings in the Land & Environment Court. I am confident that we can get the plans approved, however with some tweaking, and we will have development consent under the Nomination Deed prior to the Sunset Date. I will keep forwarding you our plans as the continue to evolve and I'd appreciate it if you could have them reviewed and advise me of any issues you may see."
Ngo: "Okay, thank you for keeping me informed. This will make my client very happy."
I accept Mr Coulston's evidence of that conversation, where his comments broadly reflect the content of his email sent the day before, to which I referred in the chronology above, and given the credit findings I reach below. Plainly, Mr Ngo did not then express the view now taken by AEN of these amendments. Mr Coulston also referred to subsequent communications to Mr Ngo, to which I have also referred in the chronology set out above, and addressed the section 34 agreement reached between 1VD and Council on 17 October 2017, the approval of the Final DA by an order made by the Land and Environment Court, and the service of that Final DA on AEN prior to the DA Sunset Date under the Nomination Deed.
By his second affidavit dated 5 February 2021, Mr Coulston responded to evidence led in respect of AEN's cross-claim and particularly the affidavits of Mr Yan, Ms Wang (which was not read as she was not available for cross-examination) and Mr Ngo. Mr Coulston took issue with Mr Yan's evidence that Ms Wang acted as his interpreter and his evidence was that Mr Ngo acted as Mr Yan's interpreter. It is not necessary to resolve that dispute, although the probability is that both Ms Wang and Mr Ngo assisted Mr Yan with translation at various times. Mr Coulston's evidence was that AEN first objected to the inclusion of studio apartments in the Final DA at a meeting on 5 November 2018, where AEN contended that the studio apartments were one bedroom apartments and that there were more than 22 one bedroom apartments in the development, for the purposes of the Nomination Deed (Coulston 5.2.21 [6(g)]). I have referred to that meeting in the chronology that appears above. That affidavit also summarised the disbursements which AEN incurred in respect of the development after the date on which 1VD conveyed to AEN that its design had been amended to include studio apartments, totalling $140,496.55. Those disbursements are relevant to 1VD's estoppel claim that I address below.
Mr Coulston there denied several allegations made in Mr Yan's and Mr Ngo's evidence, including that anyone had said to him that apartments less than 50 square metres in size could not be included in the development application; that he had guaranteed that apartments of less than 50 square metres would not be included in the apartment mix in the development application; that he guaranteed or agreed that a minimum of 130 carparking spaces would be included in the development application or the final plans for approval; or that Mr Yan or Mr Ngo described units by reference to their size or square meterage in meetings he attended with them. Mr Coulston also responded to Mr Yan's evidence of the 7 December 2016 meeting and gave evidence that he met Mr Yan only three times before the Nomination Deed was signed on 22 December 2016, at the 7 and 8 December 2016 meetings and the 21 December 2016 dinner meeting, and denied that he had met Mr Yan at the project site in Kogarah. AEN now accepts that Mr Coulston's evidence as to the latter matter is correct.
I accept Mr Coulston's evidence (Coulston 5.2.21, [23(j)]) that he said to Mr Yan, at that meeting, words to the effect that:
"Plans were likely need to be changed or amended in order to appease Council, particularly where Council requires those changes to get approval. It's too early to lock in anything at this stage, this is why I need flexibility in design as I cannot guarantee what Council may require at this early stage in order for them to consent to our DA. If Council don't agree to our DA plans, we may even need to run a process through the Land and Environment Court as Council may not be supportive of our application."
Mr Coulston was cross-examined to suggest that he did not say those words at that meeting. I accept that they were said, both because of the view that I have formed as to Mr Coulston's credit, and because of the inherent likelihood that an experienced developer would have recognised and not sought to conceal the risk that difficulties might arise in obtaining development approval for the property, where one would expect that risk would be obvious at least to the solicitors advising AEN.
Mr Coulston also responded to other aspects of Mr Yan's evidence. Mr Coulston also responded to Mr Ngo's evidence, and took substantially the same position that he took in response to Mr Yan's evidence. That is not surprising, given the extent to which Mr Yan's affidavit had been copied into Mr Ngo's affidavit, or vice versa, as I will note below.
By his third affidavit dated 8 March 2021, Mr Coulston responded to Mr Yan's affidavit dated 7 August 2020 and agreed that, during meetings with Mr Yan in December 2016, Mr Yan had repeatedly said through his interpreter that he wanted "at least 96 apartments" and said that Mr Coulston had responded that "I will aim to achieve 96 apartments". Plainly, Mr Coulston's version of that conversation did not amount to a guarantee that 96 apartments would be achieved.
By his fourth affidavit dated 26 August 2022, Mr Coulston gave evidence that the meeting on 7 December 2016 at Mr Yan's restaurant, to which I referred above, was approximately 30 minutes long and had an "informal" feel and that the parties did not discuss the terms or conditions on which 1VD and AEN would enter into an agreement. Mr Coulston qualified that position in cross-examination, as I will note below. Mr Coulston also referred to the meeting of about two hours on 8 December 2016 at the offices of 1VD's solicitors, attended by Mr Garling, Mr Ngo and Mr Overton and indicated that he did not recall if Ms Wang was present. He also referred to the dinner with Mr Yan and others at the Golden Century Chinese restaurant on 21 December 2016, and his evidence was that dinner lasted for approximately two or three hours. He also referred to additional documents and correspondence with Mr Ngo.
By his fifth affidavit dated 7 September 2022, Mr Coulston responded to Ms Chen's affidavits, to which I refer below, particularly in relation to the meeting at Mr Yan's restaurant on 7 December 2016 and annexed documentation that supported his evidence that he arrived for that meeting just after 9.30am, and reiterated his evidence that Mr Ngo interpreted what Mr Yan was saying in business meetings from Mandarin to English and what Mr Coulston was saying to Mr Yan from English to Mandarin. Mr Coulston's evidence was that the meeting on 7 December 2016 was a casual "meet and greet" prior to the substantive meeting on the following day at the offices of 1VD's solicitors, and there were no formal discussions about business matters concerning the number of apartments in the mix at that meeting. Mr Coulston accepted in cross-examination that some business matters must have been discussed at that meeting, although he said he did not recall them, since he had amended a draft heads of agreement between 7 and 8 December 2016 by making changes that likely reflect discussion of those matters on 7 December 2016. The concession was fairly made.
Mr Coulston was cross-examined at some length. He presented as an intelligent witness, who largely directly responded to questions (albeit with moments of impatience) and made appropriate concessions, including conceding that his recollection of some matters was limited. He maintained his evidence in cross-examination that he had not guaranteed that he could achieve 96 larger apartments to Mr Yan and that there had been no discussion whether or not studio apartments could be included in the project prior to his raising the possibility of doing so in August 2018. He also reaffirmed his evidence that he had never been informed that studio apartments or apartments less than 50 square metres in area could not be included in the proposed development. I accept his evidence in that regard, which is consistent with the absence of reference to that position in contemporaneous documentation. There is no inconsistency between Mr Coulston not recalling some matters and his having a clear recollection of what was not said.
Mr Yan goes on to attribute further lengthy speeches to Mr Coulston and Ms Wang. I am satisfied that these conversations did not occur in these terms; Mr Ngo's lengthy recollection of what was said to him, and what he said, as translated by Ms Wang, is inconsistent with his lack of precise recollection of other matters in cross-examination; and his evidence is fundamentally undermined by the fact that Mr Coulston had not attended that meeting.
Mr Yan also gives evidence of a second meeting in early December 2016, at which he again attributes a lengthy speech to himself, which he had asked Ms Wang to translate for Mr Coulston, in words identical to the evidence of that conversation contained in Ms Wang's affidavit, and then attributes lengthy speeches to Mr Coulston and a further lengthy speech to himself (Yan 7.8.20, reaffirmed on 1.10.21, at [54]ff). I am satisfied that these speeches do not reflect Mr Yan's genuine recollection, or even reconstruction based on recollection, but have been consciously or unconsciously shaped to advance AEN's case. Mr Yan then addressed, partly in inadmissible evidence, the continuing negotiations which took place between the solicitors after he had returned to China, and parts of that evidence were also identical to Ms Wang's evidence concerning those matters. Mr Yan's evidence, which I admitted with a limiting order under s 136 of the Evidence Act as to his understanding, where a rectification case was brought, was that the draft Nomination Deed:
"had recorded on it the apartment mix promised by [Mr Coulston], when it was translated for me. This made me understand that at least that part of the discussions had been understood by [Mr Coulston], as to what I wanted. There was nothing said in these documents when translated for me that made me understand that [Mr Coulston] viewed studio apartments differently to one-bedroom apartments." (Yan 7.8.20, reaffirmed on 1.10.21, [80])
I do not accept that evidence, so far as it implies that Mr Yan or Mr Coulston had then turned their minds to the question of studio apartments or that the Nomination Deed addressed the position as to studio apartments. Mr Yan's evidence in cross-examination supports the finding, which I make, that he had not then turned his mind to that question.
Mr Yan in turn gave evidence (Yan 7.8.20, reaffirmed on 1.10.21, [71]), which can go no higher than his understanding, that:
"During the meetings and while dealing with these documents, I made no distinctions between studio apartments and one bedroom apartments, and viewed them as the same, namely an apartment that provided for one sleeping arrangement and the only difference was the size. I was never told anything to suggest that [Mr Coulston] or [Mr Overton] made a distinction. Had I been told otherwise my instructions to Mr Ngo would be to also include a clause that there were to be no studio apartments and if they were then the balance of the nomination fee was to be refunded in full also as that was the agreement that I had asked for and was told that [Mr Coulston] agreed. In my mind the fact that I asked for no apartment to be less than 50 square metres internally had the effect of excluding studios and as such did not need to say more. That was my understand[ing] and that was the agreement I asked for and I thought I had."
I do not accept this evidence, so far as it advances a proposition that Mr Yan had then turned his mind to the question of studio apartments; that he had actively considered the question whether a studio apartment or one bedroom apartment was the same, with the only difference being its size; that he had asked for an agreement dealing with the question of studio apartments or had been told that Mr Coulston had agreed to that matter; or that the agreement, as formed, dealt with the question of apartments generally of less than 50 square metres, rather than one bedroom apartments of less than 50 square metres. Mr Yan's affidavit continued, at some length, to describe his understanding of the Nomination Deed in respect of its treatment of studio apartments and apartments of less than 50 square metres, and addressed, in evidence that was largely inadmissible and not admitted, and which was also in substantial part identical with Ms Wang's affidavit, subsequent steps in which he had not been involved.
By a second affidavit dated 26 April 2022, Mr Yan responded to aspects of Mr Coulston's evidence. His evidence was that, until late 2018, all design drawings provided to him did not provide for apartments less than 50 square metres internally and the need for studios smaller than 50 square metres to be included was never raised (Yan 26.4.22 [10]). That is not surprising, where that issue did not arise until the height of the building was reduced in the course of the LEC proceedings, as I noted above. Mr Yan accepted that he was mistaken in his recollection of having met Mr Coulston at Kogarah in October 2016 (Yan 26.4.22 [11]), as Ms Wang was also mistaken in her corresponding affidavit evidence concerning the same meeting. Mr Yan accepted that he first met Mr Coulston in December 2016 at his restaurant (Yan 26.4.22 [15]). Mr Yan also referred to a second meeting in a more formal environment, and accepted that that was likely held at the office of 1VD's solicitor and that Mr Ngo was present (Yan 26.4.22 [18]). Mr Yan also addressed other aspects of Mr Coulston's evidence at some length.
Mr Yan was cross-examined, through an interpreter, and it was apparent that he had limited recollection of events, but was anxious to advance his case by asserting the construction which he contends should be given to the Nomination Deed, irrespective of whether a question raised that matter. Mr Yan was cross-examined as to the meetings on 7 and 8 December 2016 which he had not recalled in his first affidavit but had addressed in his second affidavit. His evidence in cross-examination (T274) was initially that he recalled two meetings with Mr Coulston, later amended to three meetings, one at his restaurant (which would be the 7 December 2016 meeting), one at his solicitor's office (which may refer to the 8 December meeting, although that took place at the office of 1VD's solicitor) and a third at a Chinese restaurant (which would be the 21 December meeting). Mr Yan's evidence, inconsistent with the contemporaneous documentation, was that the first meeting at his restaurant occurred in the afternoon, closer to 6 pm than 2 pm and went for more than half an hour (T275). The error in the time of the meeting, and the limits in what he recalled, is significant so far as it emphasises that, unsurprisingly, his memory of these matters is not strong, despite the detail with which they were addressed in his affidavit evidence.
Importantly, Mr Yan acknowledged the lack of reference to studio apartments in discussions and negotiations 2016 in cross-examination, as follows:
Q. Do you agree that at the meetings with Mr Coulston in December 2016 there was no instruction from you to Ms Wang that there'd be no studio apartments in the development?
A. This question wasn't even considered at the time. We were talking about a unit that had a kitchen, a bathroom, a living room, and a room - and a bedroom, and that was not possible with a studio. That was why that question was not considered at the time. (T278)
And again:
Q. Do you agree that at the meetings with Mr Coulston in December 2016 there was no instruction from you to Mr Frank Ngo that there'd be no studio apartments in the development?
A. So this is what it is. From the time from which we signed the deed up until prior to the approval of the DA, the word "studio" was never mentioned. We never had any discussions about a studio. It was always only about a one-bedroom. Afterwards and now, I note that it was possible that they could not satisfy the quantity requirement, which is why they added the studios in. (T280)
That acknowledgment falsified the affidavit evidence that Mr Yan (and Ms Wang) had previously given that that matter was expressly discussed (Yan 7.8.20, reaffirmed on 1.10.21, [43], and to similar effect, Wang 7.8.20, [32]; Yan 7.8.20, reaffirmed on 1.10.21, [45]).
Mr Yan's evidence in cross-examination was ambiguous as to any instruction he had given in respect of units of a size of 50 square metres, although he referred to discussion of one, two and three bedroom units (T278, 280) and accepted that any reference to that size was directed to the size of one bedroom units:
Q. At the meetings with Mr Coulston in December 2016 there was no instruction from you to Ms Wang that they were to be no units less than 50 square metres in the development. Correct?
A. I only said that one bedrooms were not to be smaller than 50 square metres; two bedrooms no smaller than 70; and three bedrooms no smaller than 90. (T279)
Mr Yan was unable to offer any adequate explanation of how substantial parts of his affidavit came to be identical with substantial parts of Ms Wang's affidavit, or how he and Ms Wang had come to make the same errors in their evidence and correct them in the same way. He was not cross-examined as to the extent of the similarities between his and Mr Ngo's affidavit evidence, which I will note below. It seems to me that Mr Yan's evidence reflected only a weak recollection of events and was, at best, a reconstruction shaped to advance AEN's case, and affected by whatever steps had brought about its identity with large parts of Ms Wang's evidence. I do not accept Mr Yan's evidence, unless corroborated by documents, and it is largely not corroborated by documents in respect of relevant aspects of AEN's cross-claim.
Mr Ngo also had no records within the file maintained by his firm recording any instruction from Mr Yan that there were to be no studio apartments within the development (T330). I recognise the possibility that that answer reflects a general lack of records of any oral instructions given by AEN, rather than a lack of records of instructions as to that particular matter. I also recognise that the lack of records of these matters will likely have impacted on the reliability of Mr Ngo's evidence. I am not persuaded by Mr Ngo's evidence, to the extent it is to be understood as indicating that he received any oral instructions that there were to be no apartments of less than 50 square metres in area. There are several obvious difficulties with that evidence, including that Mr Ngo did not approach the Nomination Deed in a manner consistent with his having received such an instruction; no experienced solicitor would proceed on the basis that he did not seek to reflect such an instruction in the relevant contract because it was the "common understanding" of the parties which that contract was intended to document; and Mr Ngo does not now suggest that he had failed to implement an instruction that he was given in that regard.
I will address other aspects of Mr Ngo's cross-examination below, where he gave varying accounts of the manner in which identical paragraphs were included in the affidavits of Mr Yan and Ms Wang and his own affidavit.
There are several reasons why I reach this conclusion. First, Ms Chen fairly accepted in cross-examination that she did not seek to recall what was said at the meeting in early December 2016 until over 5 years after it took place, on or about the date of giving her affidavit on the afternoon of 30 August 2022. There was no reason that she should have had a particular recollection of what was said at that meeting, when the issues would not have been particularly controversial when the meeting took place and she had no direct personal interest in the detail of those matters, beyond the fact that she had introduced Mr Yan to Mr Overton and, through him, to Mr Coulston. It was also notable that Ms Chen had no particular recollection of anything that occurred immediately before or immediately after that meeting. Second, it was essential to Ms Chen's account of that meeting that it included both a business discussion and a meal continuing over several hours, served by Mr Yan's private chef while his restaurant was closed, and she unequivocally rejected the suggestion that meeting occurred at 9.30am on that date. However, it is plain from contemporaneous documents that the meeting did commence at that time and that suggests that Ms Chen has understandably confused the morning meeting on 7 December 2016, which she likely did not attend, with the dinner on 21 December 2016, which she plainly did attend.
Third, there are real inconsistencies in Ms Chen's three accounts of what was said in that meeting, the first in her first affidavit dated 30 August 2022; a second in a third correcting affidavit dated 6 September 2022; and a third when asked to recall what was said in cross-examination, and her evidence as to how the change in her account between her first affidavit dated 30 August 2022 and her third affidavit dated 6 September 2022 arose was unclear. Her first account of the conversation, in paragraph 23 of her affidavit dated 30 August 2022, is that:
"One of the things that I clearly recalled was the drawings were looked at and discussed and I recall Mr Yan saying to [Ms Wang] "I don't want any apartments less than 50 square metres in the DA. I want more of the larger apartments." I recalled Mr Yan also saying "I want no less than (I now cannot recall the number mentioned) apartments in the mix. I want a greater number of 2 and 3 bedroom apartments". I also recalled Mr Yan saying "If you achieve a better result then I will pay you more."
By the time of Ms Chen's third affidavit dated 6 September 2022, she had amended the matters that she had clearly recalled in her first affidavit by amending part of what was said and including additional words, as follows:
Further, paragraph 23 should read:
"One of the things that I clearly recalled was the drawings were looked at and discussed and I recall Mr Yan saying to [Ms Wang] "I don't want any apartments less than 50 square metres in the DA. I want more of the larger apartments." I recalled Mr Yan also saying "I want no less more than (I now cannot recall the number mentioned) of one bedroom apartments in the mix. I want a greater number of 2 and 3 bedroom apartments. I want no less than (now I cannot recall the number of) apartments in total". I also recalled Mr Yan saying "If you achieve a better result then I will pay you more." (emphasis in original)
Ms Chen appeared to suggest, in cross-examination (T475) that the error had arisen in her 30 August 2022 affidavit because she had told Mr Santisi and Mr Ngo on 30 August 2022 that Mr Yan said that he wanted "no more than" the specified number of apartments but Mr Ngo wrote "no less" in her affidavit, but that does not explain the omission of the reference to "one bedroom" or of the additional sentence included in her third affidavit, where she was recalling a conversation that had occurred more than five years ago that she had previously recounted only several days before. Ms Chen's further version of that correspondence in cross-examination (T466-468) did not correspond to, or have the detail of, either of her versions in her affidavits dated 30 August 2022 and 6 September 2022.
Fourth, it seems to me that Ms Chen's presence in Court during parts of the hearing is likely to have affected the reliability of her evidence, at least in the sense of focussing her attention on issues that have been squarely raised in the parties' openings and Mr Yan's evidence. Fifth, the reliability of Ms Chen's evidence is undermined by the fact that she is plainly mistaken in her evidence that the meeting on 21 December 2016 was "casual", by contrast with the 7 December 2016 meeting, since the meeting at the Golden Century Restaurant on 21 December 2016 involved discussion of significant terms of the Nomination Deed, as the contemporaneous file note prepared by AEN's solicitors which I set out above demonstrates, and then a lengthy and apparently convivial dinner. That error is consistent with the possibility that she has confused the two occasions given the passage of time.
I am unable to place any significant weight on Ms Chen's evidence, again without any criticism of her. In any event, little ultimately turns upon the accuracy of Ms Chen's recollection of what was said at the dinner meeting in early December 2016, or which version of that recollection should be adopted. I find below, in dealing with AEN's representational case, that any earlier discussions as to the delivery of a particular number of apartments of a particular size plainly ceased to have any continuing effect, given the clear recognition of 1VD's ability to vary the apartment mix in response to statutory and Council requirements in the heavily negotiated provisions of the Nomination Deed.
Mr Ngo then gave the following evidence:
"Q. Mr Ngo, the paragraphs you've just identified by reading them out, they are the paragraphs which you say concerned the representations. Is that correct?
A. That's my recollection. Yes.
Q. Should we understand the position to be that the paragraphs you've identified a moment ago concerning the representations are those paragraphs in Mr Yan's affidavit where you "used" Ms Wang's affidavit?
A. I believe so. I can't recall.
Q. When you say, used the expression "used Ms Wang's affidavit," what do you mean?
A. Use - what I mean is that the - the representations provided or the instructions provided by - to me by Mr - Mr Yan and Ms Wang are similar in terms of the representations made. That's why I used the - adopted the conversation.
Q. You adopted the conversation from Ms Wang's affidavit, is that correct, to be "used" in Mr Yan's affidavit?
A. Yes.
Q. Did that process of adopting to use Ms Wang's affidavit oral representations in Mr Yan's affidavit, was that a process of copying and pasting from the affidavit into the other?
A. The - basically, I firstly confirmed the instructions of Mr Yan. Mr Yan told me the representation that was made and if it - if it was similar to - or to the fact that the same as Ms - Ms - Ms - Ms Wang, yes, then I - I - I basically duplicate or - or copy the - the conversation across." (T348)
He then indicated that he adopted Ms Wang's evidence in preparing Mr Yan's affidavit "insofar as it relates to instructions of the representations", provided that Mr Yan gave instructions that were "in line" with what Ms Wang had said (T349-350). Mr Ngo was then unable to provide any satisfactory explanation as to why Mr Yan's affidavit referred to conversations prohibiting the inclusion of studio apartments in the development, when Mr Ngo accepted that his instructions were that there had been no mention of studios at any time before August 2018 (T350), and, I should add, Mr Yan had readily accepted in cross-examination that there had been no such reference.
Mr Ngo was then cross-examined as to the schedule of identical or substantially identical evidence in Mr Yan's and Ms Wang's affidavits (Ex P4) and he accepted that it was "highly unlikely" that two witnesses would give evidence using identical or substantially the same words in two affidavits (T354) but then gave evidence that:
"Q. You'd agree, wouldn't you, that the only explanation for how it is here in this case, that Mr Yan and Ms Wang, in their two affidavits of 7 August 2020 have used identical or substantially the same words in their two affidavits is because you typed up the two affidavits, and ensured they had the same words or substantially the same words within them. Do you agree?
A. No, I don't, because I was based on their instructions, and they testified the same facts." (T354)
I do not accept that Mr Ngo's evidence in cross-examination was a complete and truthful account of his approach, where it is inconceivable that Mr Yan in giving instructions in Mandarin through an interpreter, and Ms Wang, in giving instructions in English, would have given identical or substantially similar accounts of numerous representations which were then reflected in multiple identical paragraphs of the two affidavits. That account also provided no explanation of why paragraphs recording oral representations in Mr Ngo's affidavit were also identical to paragraphs recording those representations in Mr Yan's and Ms Wang's affidavit, where it is even less credible that all three witnesses had identical recollections of the relevant representations, which could be fairly reflected by copying Ms Wang's evidence into both Mr Yan's and Mr Ngo's affidavit. It is apparent that Mr Ngo copied many paragraphs of Ms Wang's affidavit into Mr Yan's affidavit, or vice versa, on occasion with the same misprints: for example, paragraph 350 of Mr Yan's affidavit corresponds to paragraph 383 of Ms Wang's affidavit, with the same misprint in the word "though" and paragraph 351 of Ms Wang's affidavit corresponds to paragraph 385 of Mr Yan's affidavit, with the same misprint in the word "amnened". There are also many other non-representational paragraphs that are wholly or partly in the same form, and I raised a number of those paragraphs with Mr Ngo at the conclusion of his cross-examination.
At the risk of repetition, I do not accept that Mr Yan in Mandarin through an interpreter and Ms Wang in English had given the same or substantially the same instructions as to those many matters to Mr Ngo, where it is inconceivable that two witnesses giving independent evidence would have raised the same thoughts in the same order, particularly when giving evidence one in English and one in Mandarin through an interpreter, including giving the same inadmissible evidence of their understandings of matters and making submissions as to other matters in the same form. The only available inference from Mr Ngo's evidence, if it were accepted, would be that Mr Yan and Ms Wang had colluded in giving their instructions to Mr Ngo concerning their affidavits, to the extent that he was told the same thing by each of them in respect of numerous matters, by Mr Yan in Mandarin through an interpreter and by Ms Wang in English, and then reflected the identity of the collusive instructions that he had been given by copying Ms Wang's evidence into Mr Yan's affidavit, and then extending that process to copying aspects of Ms Wang's evidence or Mr Yan's evidence into his own affidavit. Other possibilities, not accepted by Mr Yan in cross-examination, is that Mr Ngo prepared pro forma affidavits for the review of Ms Wang or Mr Yan or both, which they adopted without any real independent review, or he used a detailed template to ask questions of them which shaped their evidence to the extent that it was substantially identical, or took evidence from one witness and then prepared a draft affidavit which was provided to the other, from which he then copied aspects of his own evidence. Mr Ngo denied each of those propositions, and maintained that denial when I invited him to reflect on whether there were any aspects of his evidence that he wished to correct, given the potential consequences for an officer of the Court of a finding that his or her evidence could not be believed, extending across a substantial amount of evidence and a lengthy cross-examination.
Mr Santisi refers to parts of Mr Yan's cross-examination and I have regard to Mr Yan's denial that he spoke together with Mr Ngo and Ms Wang about the evidence they would give in the case and his denial that he communicated with Mr Wang about his evidence and his claim that his evidence was "entirely based on my own memory, slowly, bit by bit" (T290-291, 292). Mr Santisi also referred to Mr Yan's evidence in cross-examination that he had "wrongly" remembered that the meeting at the Kogarah property had been attended by Mr Coulston, and that he could not explain why Ms Wang had made the same error and suggested that "[m]aybe she had also remembered it wrongly". I bear in mind that Mr Yan also denied the proposition that he and Ms Wang made that mistake and other mistakes in the same way because they had "spoken about the evidence" given in their affidavits (T295). Mr Santisi also referred to Mr Yan's evidence concerning his (and Ms Wang's) omission of a reference to the meeting at his restaurant on 7 December 2016 in his first affidavit (and Ms Wang's corresponding omission) and his (and Ms Wang's) reference to that meeting in their second affidavits, and to the submission put to Mr Yan, and denied by him, that he had acted dishonestly by discussing his evidence for the proceedings with Ms Wang, or by discussing the evidence that he and Ms Wang would give with Mr Ngo. Mr Yan initially did not squarely respond to the latter proposition, when put over several questions in cross-examination, but ultimately denied that he and Mr Ngo had worked together "to make sure [he] and Ms Wang were giving the same evidence".
Mr Santisi in turn submits that any issues as to collaboration between the witnesses (which he puts in somewhat more extravagant terms) is "purely based on [the] comparison" to which I referred above. While that comparison, and the many identical passages in the affidavits which it reflects, raises that issue, it is ultimately to be determined by reference to the improbability that two witnesses would give identical evidence or identical instructions to Mr Ngo, involving identical errors, over a number of matters recalled from several years ago, when one was providing instructions in Mandarin through an interpreter and the other in English.
Mr Santisi submits that documentary evidence corroborates the account given by Mr Yan, and the account that would have been given by Ms Wang had she been available for cross-examination, and speculates that "[t]he fact they had access to the AEN business records may explain the similarity in the evidence". Neither Mr Yan nor Mr Ngo gave evidence to that effect in cross-examination to explain the identical passages in their affidavits. Mr Santisi then refers to a number of documents which are likely relevant to 1VD's substantive claims, but provide no explanation of the extent of the identical evidence in Mr Yan's, Ms Wang's or Mr Ngo's affidavits. Mr Santisi also refers to Mr Ngo's evidence as to steps he had taken to translate the relevant affidavits for witnesses, which he contends were directed to "preserve the integrity of the two witness accounts" and to Mr Ngo's denial of the "allegations" against him. That evidence also provides no explanation of how identical evidence arose to this extent, absent collusion between the witnesses or copying of evidence by Mr Ngo, where three witnesses would not, in the ordinary course, have substantively identical recollections of the many matters as to which they gave identical evidence.
Mr Santisi submits, correctly, that the Court is "left with denials both from Mr Yan and Mr Ngo", but that submission does not come to grips with the fact that I am also left without any credible explanation of how identical evidence on this scale could have arisen without collusion or copying of evidence which was not based on identical instructions. Mr Santisi in turn speculates that several matters which "could have" given rise to similarity in the evidence. He observes that Mr Yan experienced the same events as Ms Wang. Obviously enough, many witnesses who give evidence in this and other Courts have shared the experience that is the subject of the litigation; however, precise identity of their evidence is rare, because genuine recollection does not ordinarily give rise to identical evidence over lengthy affidavits. Mr Santisi also submits that "[t]here is no real way of expressing the same event, differently, hence the similarities in expression". I do not accept that proposition, which is again falsified by experience, where witnesses who are giving independent evidence generally do not recall the same events in identical or substantially identical terms.
Mr Santisi also submits that:
"As Mr Ngo in fact stated, having heard the account of each and it being the same or very similar, it [sic] reproduced the same answer for each, rather than manipulate it such that it would appear to be different, which conduct would be wrong."
I do not accept that submission, because I do not accept its premise that there is any real likelihood that Mr Yan, Ms Wang and Mr Ngo would have each recalled evidence of this length in the same or "very similar" terms so as to justify (or at least explain) the copying of one witness' evidence to other witnesses' affidavits. Mr Santisi in turn submits that, "[i]f such collusion in fact occurred, which is denied, then steps would have been taken to ensure it appeared different". I do not accept that submission, which would be available in answer to any allegation of collusion. Although collusion is, happily, not common in my experience, enough of it occurs to demonstrate that parties who engage in it are often caught out, and it would be more difficult to conceal in lengthy affidavits.
Mr Santisi also asks, rhetorically:
"What possible motive would a Solicitor engaged [sic] in conduct that could impact on his practising certificate, and put it at risk. This is just implausible in these circumstances."
Unfortunately, there are obvious answers to that rhetorical question. First, the fact is that from time to time, solicitors do engage in improper conduct that could and does put their practising certificates at risk, just as company directors breach their statutory and general law duties and auditors make audit judgements that put their firms at risk. The fact that, logically, they should not be motivated to do so does not mean they do not, in fact, do so. Second, the question of Mr Ngo's motivations is here a matter of speculation, where he has not given a complete and truthful account of his approach to preparing that evidence, although there is an obvious possibility that any risk of potential claims by AEN against him or his firm may be a relevant matter.
Mr Santisi also draws attention to authority, which I accept, that the evidence of witnesses should be assessed by reference to contemporaneous documents, and I have adopted that approach here. He refers to the application of s 140 of the Evidence Act, to which I have had regard so far as issues of collusion or copying of one witness' affidavit to other affidavits by Mr Ngo are plainly serious matters. Mr Santisi submits that evidence is to be preferred which is inherently probable in the circumstances or is given by a witness against their interest, and that evidence of independent witnesses may resolve conflicting evidence of interested parties, although neither proposition appears to advance AEN's position here. He submits, and I accept, that the fact that a witness has been found to be lying about one thing does not automatically mean that they are to be disbelieved about everything else, and that the Court should be cautious about global credibility findings, and that disbelieving a witness' evidence of a particular proposition does not mean that the opposite proposition has been proved. However, the fact that a witness has not given independent evidence of his or her own recollection about many things may plainly undermine his or her evidence, by making it impossible for the Court to know what evidence that witness would have given, had his or her evidence been given independently.
Mr Santisi in turn submits that:
"It is submitted that applying the above principles, would quickly lead one to conclude, that the comparison on its own is insufficient, the existence of the comparison, can be otherwise explained, the account in these comparisons is so far as Mr Yan is concerned, is more than established, as being accurate and truthful, from the documents and the objective facts as they exist" [sic]
Indeed, Mr Santisi went further to suggest that "[a]s such the comparison [of Mr Yan's, Ms Wang's and presumably also Mr Ngo's evidence] is reduced to nil". I do not accept that submission, for the reasons noted above and because, contrary to Mr Santisi's submission, it seems to me that Mr Yan's evidence is not corroborated by contemporaneous documents as to the matters in dispute.
Turning now to the case law, in Macquarie Developments Pty Limited and Anor v Forrester and Anor [2005] NSWSC 674 Palmer J considered the weight to be attributed to two affidavits dealing with significant matters in substantially identical terms, where a solicitor had "copied and pasted" portions from one affidavit to the other and observed (at [89]-[91) that:
"[I]t is totally destructive of the utility of evidence by affidavit if a solicitor or anyone else attempts to express a witness' evidence in words that are not truly and literally his or her own.
Save in the case of proving formal or non-contentious matters, affidavit evidence of a witness which is in the same words as affidavit evidence of another witness is highly suggestive either of collusion between the witnesses or that the person drafting the affidavit has not used the actual words of one or both of the deponents. Both possibilities seriously prejudice the value of the evidence and Counsel usually attacks the credit of such witnesses, with good reason.
Where the identity of evidence is due to collusion, the devaluation of the evidence is justified but where, as in the present case, the identity of evidence is due entirely to a mistake on the part of a legal adviser, a witness' credit and a party's case may be unjustly damaged."
I also addressed the difficulty which arises from the copying of affidavits, in a much less extreme case than this matter, in Colorado at [17]ff as follows:
"In Seamez v McLaughlin [1999] NSWSC 9, Sperling J concluded from the high degree of similarity in content, detail, terminology and sequence between the affidavits of three witnesses that they could not have come into existence without direct or indirect collaboration and observed at [40]) that:
[a]cceptance of one of the three accounts of the events … means not only that the other two are not genuinely recollected, independent accounts. It also means that the authors of those other accounts have misstated the way in which their respective accounts came into existence, and seriously so. The credit of the others would then be worthless.
The difficulty which arises from these matters is not merely the possibility of collusion between witnesses that prejudices the value of their evidence but also, as Palmer J noted in Macquarie Developments above, the possibility (and in this case the virtual certainty) that the affidavits did not use the actual words of the respective deponents. His Honour there observed (at [90]) that:
Save in the case of proving formal or non-contentious matters, affidavit evidence of a witness which is in the same words as affidavit evidence of another witness is highly suggestive either of collusion between the witnesses or that the person drafting the affidavit has not used the actual words of one or both the deponents. Both possibilities seriously prejudice the value of the evidence and Counsel usually attacks the credit of such witnesses, with good reason.
Obviously enough, as Ward J (as her Honour then was) noted in Celermajer Holdings Pty Ltd v Kopas [2011] NSWSC 40, it is unlikely that two deponents would have a precisely identical recollection, uninfluenced by the recollections of others, of shared experiences. Her Honour also noted, and I agree, that (at [186]):
even if there has not been collusion as such between the witnesses, in the sense of changing their evidence to make it fit with that of another, the fact that the affidavits may not contain the actual words of one or other of the deponents devalues their evidence.
I accept that, in some cases, the courts have taken the view that difficulties of this kind do not render the credit of a witness worthless, although they require care before accepting the evidence of one or other of the witnesses: Macquarie Developments above at [89]-[91]; Rosebanner Pty Ltd v Energy Australia [2009] NSWSC 43 ; (2009) 223 FLR 460 at [324], [326] per Ward J; Celermajer Holdings above at [183]-[189]."
In Dentown Pty Ltd v PWI Group Pty Ltd as trustee of The Australia No 1 Group Trust (2019) 141 ACSR 330; [2019] NSWSC 1032 at [15]-[19], Rees J observed that the contents of identical affidavits are devalued by reason of them being identical and a judge will approach the contents with caution. Her Honour added that oral evidence is likely to be more indicative of what actually happened than events described in their duplicated affidavits. In Plus One International Pty Ltd v Ching (No 3) [2020] NSWSC 1598 at [284], Hallen J took the same view.
In this case, the level of copying of evidence between the three affidavits of Mr Yan, Ms Wang and Mr Ngo is extreme by any standard, with the effect that each of Mr Yan and Ms Wang, and on occasion also Mr Ngo, recalled the same conversations in the same terms, reacted to the same correspondence in the same way, and thought the same thoughts which they expressed in the same terms, over lengthy affidavits. Those difficulties relate to all disputed conversations. I consider that these matters go beyond the position that Mr Yan's and Mr Ngo's affidavit evidence cannot be treated as reflecting a genuine individual recollection of events as distinct from a collective reconstruction of them, to the point that those affidavits can be given little or no weight as to contested matters. That question does not arise in respect of Ms Wang's affidavit evidence, only because her affidavits could not be read where she was not available for cross-examination.
I also bear in mind the gravity of an adverse finding as to Mr Ngo's credit for his reputation and for his practice as a solicitor, and that I should only reach that finding if I am satisfied of it to the standard in Briginshaw v Briginshaw (1938) 60 CLR 336 and s 140 of the Evidence Act. Nonetheless, and with regret, I am obliged to record that I do not believe Mr Ngo's evidence as to the manner in which Mr Yan's, Ms Wang's and his affidavits were prepared, and in particular I do not believe his claim to have received the same instructions from Mr Yan (in Mandarin, through an interpreter) and Ms Wang (in English), and implicitly to have had the same recollection himself, before he copied passages of one affidavit to another in the many passages (which I addressed above) where identical affidavit evidence was given. I recognise that questions also arise as to whether Mr Ngo's conduct of these proceedings may have been affected by a conflict of duty and interest, arising from a conflict between his duties to AEN in respect of the conduct of the proceedings and any personal interest in avoiding claims by AEN against him or his firm if the Nomination Deed did not achieve its commercial objectives, and as to whether Mr Ngo's continuing to act for AEN in these proceedings, where he gave evidence material to the determination of contested issues, was likely to and did prejudice the administration of justice, for the purposes of r 27.2 of the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (NSW). It is not necessary to decide those questions in order to decide the matter and I do not do so.
I should also note, for completeness, that Mr Santisi suggested in the course of his oral closing submissions (although his comment does not seem to be recorded in the transcript) that I was "smirking" when he submitted that the identical evidence of Mr Yan and Ms Wang was explained by the fact that Mr Yan and Ms Wang had given identical instructions (presumably, other than for the fact that the former was in Mandarin and the latter in English) to Mr Ngo, which were in turn identical with Mr Ngo's recollection of relevant matters, possibly prompted by their review of AEN's business records. While I cannot observe my own facial expression, I think it highly unlikely that I had such an expression, in its usual usage of smiling in a smug or condescending way. There is nothing about the matters to which I have referred above which then seemed to me to be cause for smiling, and the then apparent possibility that I might not be able to accept Mr Guo's evidence was cause for concern not amusement where he is an officer of the Court. I may well have appeared disturbed or troubled by the submission, but that was not what Mr Santisi suggested.
In its Amended Commercial List Cross-Claim Statement, AEN also pleads (ACCS [5]) a complex (and not identical) term which it contends to be found in the Nomination Deed, presumably as a matter of construction or implication, as follows:
"At all material times and from 22 December 2016 to 6 November 2018 it was an essential term of the Nomination Deed and in fact [1VD and Mr Coulston] warranted that the Development Application and any amendment of it and the Development Approval to be obtained and signed by 26 November 2018 the Sunset Date, would as a minimum not provide and contain for more than 22 apartments with a single sleeping facility namely be they, one bedroom apartments or otherwise defined that there be no more than [sic] 22 apartments that allowed for just one sleeping facility as a dedicated sleeping facility or part of an open plan sleeping facility and that in fact no apartment was to be less than 50 square metres of internal area (including balcony area) and if it did [AEN] would be entitled to rescind the nomination deed and seek to obtain a refund of the final instalment nomination fee [sic] in the sum of $1,419,736 plus GST."
AEN in turn contends that the variation of the Development Application (as defined in the Nomination Deed) and drawings to provide for 38 studio and one bedroom apartments, with at least 17 apartments that were less than 50 square metres in internal area (excluding the balcony), and "pass[ing] off the 23 October 2018 approval as the Development Approval, was in breach of the Nomination Deed". That turns upon the questions of construction of the Nomination Deed that I will address below.
It is important to have regard, first, to the basis on which AEN is entitled to be paid the Nomination Fee (as defined) under the Nomination Deed. Clause 2.1 of the Nomination Deed provided that AEN agreed to pay 1VD a "Nomination Fee" of $2,269,736 pursuant to cl 1.1 and item 2 of the Schedule to that Deed as consideration for the parties entering in to the Nomination Deed. The term "Nomination Fee" was defined as the "amount set out in item 2 of the Schedule and payable in accordance with cl 3.1 and any other monies payable under the Deed." Clause 3.1 provided that:
"It is an essential term of the Deed, and in this respect time is of the essence, that the Nomination Fee, and all other amounts to be paid by [AEN] to [1VD], are paid by [AEN] to [1VD] in accordance with the terms of this Deed."
By cl 24.1 of the Nomination Deed, the parties acknowledged and agreed that the release of the Final Instalment of the Nomination Fee in accordance with item 2(c) of the Schedule "is subject to [1VD] serving on [AEN's] solicitor a copy of the Development Approval [as defined] on or before the DA Sunset Date, as may be varied by the parties by agreement in writing". The term "Development Approval" is defined as the approval or determination of the Development Application (on such conditions as were reasonably imposed by Council) issued by Council, any relevant authority, or a Court of competent jurisdiction. The term "DA Sunset Date" is also defined in cl 1.1 of the Nomination Deed.
Clause 24.4 of the Nomination Deed in turn required 1VD, at its sole cost, to use its reasonable endeavours to prepare a Development Application (as defined) and obtain the Development Approval (as defined); serve a copy of the Development Approval on AEN's solicitors within five business days of its receipt from Council; and keep AEN regularly advised as to developments with respect to it and consult with it on the Development Application and the Development Approval. The term "Development Application" is defined in cl 1.1 of the Nomination Deed, as the Development Application prepared by 1VD in accordance with cll 24 and 25 of the Nomination Deed, relating to the proposed redevelopment of the Properties (as defined). AEN did not plead (or identify material facts relating to) any claim that such reasonable endeavours were not taken, or such advice and consultation did not occur, although Mr Santisi sought to raise complaints as to that matter in submissions.
On release of the Final Instalment of the Nomination Fee to 1VD, AEN is also required to pay 1VD's costs relating to the Development Application that lead to the Development Approval up to a limit of $200,000 plus GST pursuant to cll 24.7(a) and 24.8; and 1VD is then required to take certain steps in respect of the transfer, assignment or novation of its right, title and interest in the Development Approval (as defined) to AEN.
Clause 24.11 of the Nomination Deed in turn provides that:
"24.11 [1VD] warrants and agrees that the Development Application and Development Approval are to be prepared in accordance with the Apartment Design Guide and shall be comprised of:
(a) Not less than 15% but not more than 20% of one (1) bedroom apartments, being not less than 50 square metres of internal area (excluding balcony area) per one (1) bedroom apartment;
(b) Not less than 70% of two (2) bedroom apartments, being not less than 70 square metres of internal area (excluding balcony) per two (2) bedroom apartment;
(c) Not less than 7% but not more than 10% of three (3) bedroom apartments, being not less than 95 square metres of internal area (excluding balcony area) per three (3) bedroom apartment. Note the Nominator acknowledges and agrees that each three (3) bedroom apartment will also be entitled to the use of two (2) car parking spaces; and
(d) Not less than one hundred and thirty (130) car parking spaces in total,
however for the avoidance of any doubt, the parties acknowledge and agree that the above apartment/car parking mix will at all times be subject to all statutory, authority and Council requirements, and as such [1VD] will endeavour to provide for the above apartment/car parking mix however [AEN] acknowledges and agrees that this may be varied pursuant to the requirements of the relevant statutory, authority and Council requirements (provided such statutory, authority and Council requirements are in writing) and [AEN] shall not be entitled to make any objection, requisition, claim, rescind or terminate this Deed as a result of or in relation to any matter or thing arising out of this clause, including but not limited to any variation of the apartment/car parking mix. Notwithstanding this Clause 24.11 and Clause 25.1, the parties acknowledge and agree that the Development Approval may not contain more than twenty-two (22) one bedroom apartments (as described in Clause 24.11(a)). In the event the Development Approval contains more than twenty-two (22) one bedroom apartments (as described in Clause 24.11(a)) the parties acknowledge and agree that [AEN] shall be entitled to rescind this Deed and obtain an immediate refund of the Final Instalment of the Nomination Fee. The parties acknowledge and agree that the mechanism for the refund of the Final Instalment of the Nomination Fee pursuant to this clause is the only remedy available to either party, and neither party shall be liable to the other for any damages, claim or claims for compensation, costs or expenses whatsoever, in relation to any such rescission. For the avoidance of any doubt the parties acknowledge and agree that [1VD]'s Solicitor is irrevocably directed and authorized to release the funds in accordance with this clause."
This clause relevantly provides that the Development Application and Development Approval are to be prepared in accordance with the Apartment Design Guide (as defined) and sets out percentage requirements as to one, two and three bedroom apartments of specified areas, but does not address the position in respect of studio apartments, and also addresses the number of car parks, subject to statutory, authority and council requirements. The "Apartment Design Guide" was defined in cl 1.1 of the Nomination Deed as "the State Environmental Planning Policy No 65 - Design Quality of Residential Apartment Development, as varied from time to time". I will address the scope of the permission to vary the apartment and car parking mix "pursuant to the requirements of the relevant statutory, authority and Council requirements" and the consequential limit of AEN's right to rescind or terminate the Nomination Deed below. This clause also provided that the Development Approval may not contain more than 22 one bedroom apartments, and allows AEN to rescind the Nomination Deed and obtain an immediate refund of the Final Instalment of the Nomination Fee on doing so.
Clause 25.1 of the Nomination Deed in turn provides that:
25.1 [AEN] acknowledges and agrees that [1VD] may make any amendments and/or variations, including any Section 96 Application, in respect of the Development Application and/or Development Approval, provided that change to the Development Application and/or Development Approval is required or directed by Council, or any other relevant authority, or to comply with and to make the Development Application and/or Development Approval accord with the Gazettal or increase the number of apartments within the Development Application and/or Development Approval and such amendment and/or variation is consistent with the Apartment Design Guide."
Clause 25.2 of the Nomination Deed provides that:
"25.2 [AEN] shall not be entitled to make any objection, requisition, claim, rescind or terminate this Deed as a result of or in relation to any matter or thing arising out of this clause, including but not limited to any variation of the Development Application."
Sub-clause (c) of item 2 in the Schedule to the Nomination Deed in turn provides for the release, refund or payment of the Final Instalment of the Nomination Fee, as follows:
"(c) The Final Instalment of the Nomination Fee is to be released, refunded and/or paid upon [1VD] satisfying Clause 24.1 of this Deed.
The Final Instalment of the Nomination Fee is to be calculated as follows:
(i) where the total number of residential apartments within the Development Approval is 96 or less:
Balance of the Nomination Fee = $1,419,736.00 - [(96 - NUA) x ($18,000,000.00/NUA)]
NUA = the total number of residential apartments within the Development Approval.
The parties acknowledge and agree that the application of this formula, in circumstances where the NUA is less than 96 will reduce the Balance of the Nomination Fee below the amount of funds held in trust by [1VD's] Solicitor. As such, the parties acknowledge and agree that this amount be refunded by [1VD's] Solicitors to [AEN] at the time the Final Instalment of the Nomination Fee is released to [1VD]. For the avoidance of any doubt the parties acknowledge and agree that [1VD's] Solicitor is irrevocably directed and authorized to release funds in accordance with this clause."
Mr McInerney points out that the term "residential apartment" used in that provision is not defined in the Nomination Deed. He submits and I accept that the term "residential apartment" is given content by the documents incorporated into the Nomination Deed, that is, SEPP 65, and in turn, the Apartment Design Guide, and that term refers to any form of residential apartment, including studio apartments, one-bedroom apartments, two-bedroom apartments, and three-bedroom apartments. In closing oral submissions, Mr McInerney contended that AEN was obliged to pay the Final Instalment of the Nomination Fee under cl 2(c) of item 2 of the Schedule, irrespective of the other matters in issue. I accept that the requirements of cl 24.1 of the Nomination Deed were satisfied, because 1VD had in fact served on AEN's solicitor a copy of the Development Approval (as defined, being the orders made in the LEC proceedings) on or before the DA Sunset Date (as defined). However, it is still necessary to have regard to the other provisions of the Nomination Deed, both to read the obligations in the Schedule in their context, and because the question whether a payment to 1VD or a refund to AEN was required turns on those obligations, and it is also necessary to have regard to the matters raised in AEN's Cross-Claim so far as they seek to alter the operation of the Nomination Deed.
Turning now to Mr McInerney's wider submissions as to the operation of the Nomination Deed. Mr McInerney submits in opening that the term "one bedroom apartment" in the Nomination Deed, in contradistinction to a "studio apartment", "two bedroom apartment" or "three bedroom apartment", is an apartment that contains one bedroom (which is a room for sleeping) separated from the kitchen and living space, and does not include a "studio apartment" which is in turn defined as one habitable room inclusive of the living, kitchen and sleeping space. I accept that submission as a matter of general English usage. I also accept Mr McInerney's further submission that the Nomination Deed is to be construed by reference to its commercial context which includes SEPP 65, which is expressly incorporated by reference into cl 24.11 of the Deed, and the Apartment Design Guide, which distinguishes a "studio apartment", defined as "an apartment consisting of one habitable room that combines kitchen, living and sleeping space" of minimum internal area of 35 sqm, from a "one bedroom apartment" of minimum internal area of 50 sqm, "two bedroom apartment" of minimum internal area of 70 sqm, and "three bedroom apartment" of minimum internal area of 90 sqm. Mr McInerney submits and I accept that a studio apartment is identified in the Apartment Design Guide as different and distinct from a one bedroom apartment and, properly construed, a reference in the Nomination Deed to a "one bedroom apartment" in cl 24.11 refers only to a one bedroom apartment, and not to a "studio apartment". Indeed, it might be thought that the proposition is so obvious that a contrary reading of the clause was never reasonably available.
Mr McInerney also emphasises that the apartment and car parking mix specified in cl 24.11 of the Nomination Deed was qualified by the variation proviso to which I referred above, so that it was "subject to all statutory, authority and Council requirements", and "may be varied pursuant to the requirements of the relevant statutory, authority and Council requirements (provided such statutory, authority and Council requirements are in writing)"; and, where that occurred, AEN was not "entitled to make any objection, requisition, claim, rescind or terminate this Deed as a result of or in relation to any matter or thing arising out of this clause, including but not limited to any variation of the apartment/car parking mix". Mr McInerney fairly recognises that the variation proviso was itself limited - I interpolate, emphasising that extent to which this provision had been negotiated between the parties and their legal representatives - with effect that "[n]otwithstanding this Clause 24.11 and Clause 25.1, the parties acknowledge and agree that the Development Approval may not contain more than twenty-two (22) one bedroom apartments" and, in the event that the Development Approval did so, "the parties acknowledge and agree that the Nominee shall be entitled to rescind this Deed and obtain an immediate refund of the Final Instalment of the Nomination Fee". Where I have found that the concept of a "one bedroom apartment" does not include a "studio" apartment, that requirement was not breached here.
Mr McInerney further addressed questions of construction of cl 24.11 of the Nomination Deed at some length in a supplementary written note provided in closing submissions. Mr McInerney submits, and I accept, that there are four parts to cl 24.11. He points out that the first part of that clause is contained in cl 24.11(a)-(d) (inclusive), commencing with the words "The Nominator warrants and agrees…" down to "(d) Not less than one hundred and thirty (130) car parking spaces in total." Mr McInerney submits that the Development Application (as initially made) was prepared in accordance with the first clause in clause 24.11(a)-(d) (inclusive). He submits that the Development Approval (as distinct from the Development Application) also satisfied cl 24.11(a)-(d) (inclusive) because the Final DA, the subject of the s 34 Conciliation Conference and the orders made on 23 October 2018 by the Land and Environment Court, was the determination of the Development Application on "such terms as a reasonably imposed by Council", issued by the Land and Environment Court. I will address that question below.
Mr McInerney then draws attention to the second part of that clause, forming a qualification to the first part, which commences with the words "however for the avoidance of any doubt, the parties acknowledge and agree…" down to the words "… the Nominee shall not be entitled to make any objection, requisition, claim, rescind or terminate this Deed as a result of or in relation to any matter or thing arising out of this clause, including but not limited to any variation of the apartment/car parking mix". As I noted above, that qualification expressly states that the "apartment/car parking mix will at all times be subject to all statutory, authority, and Council requirements". Mr McInerney submits and I accept that the words "will endeavour" in this qualification means "will reasonably endeavour" or "will use reasonable endeavours" and refers to the consideration of that phrase in Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; 306 ALR 25; [2014] HCA 7 ("Woodside") at [41]-[43]. He submits and I accept that the obligation imposed by the words "will endeavour" was not absolute or unconditional, and was necessarily conditioned by what is reasonable in the circumstances, and did not require 1VD to disregard its own interests. In any event, AEN did not identify any claim that 1VD had not endeavoured, or reasonably endeavoured, to achieve the specified result, which it had pursued over a long period.
Mr McInerney also submits and I accept that the words, also in the second part of the clause, "[AEN] shall not be entitled to make any objection, requisition, claim, rescind or terminate this Deed as a result of or in relation to any matter or thing arising out this clause, including but not limited to any variation of the apartment/car parking mix" are analogous to cl 10.1 in the standard contract for the sale of land, although their effect is clear enough without that comparison. He also draws attention to case law relating to the treatment of multiple causes of events, in respect of the reference to "pursuant to" in this part of the clause, including City Centre Cold Store Pty Ltd v Preservatrice Skandia Insurance Ltd (1985) 3 NSWLR 739 at 743-745 and HIH Casualty & General Insurance Ltd v Waterwell Shipping Inc (1995) 43 NSWLR 601. I find little assistance in that case law, where this term must be construed in its contractual context. I return to the construction of this term below.
Mc McInerney points out that there is then an exception to the qualification in the second part of the clause, found in the third part of the clause commencing with the words "Notwithstanding this Clause 24.11 and Clause 25.1, the parties acknowledge and agree that the Development Approval may not contain more than twenty-two (22) one bedroom apartments…" down to the words "… the parties acknowledge and agree that the Nominee shall be entitled to rescind this Deed and obtain an immediate refund of the Final Instalment of the Nomination Fee". Mr McInerney then notes the final part of cl 24.11, commencing with the words "The parties acknowledge and agree that the mechanism for the refund of the Final Instalment of the Nomination Fee pursuant to this clause is the only remedy…" down to the words at the end of the clause that read "…For the avoidance of any doubt the parties acknowledge and agree that the Nominator's Solicitor is irrevocably directed and authorized to release the funds in accordance with this clause".
Mr Santisi, for AEN, emphasised AEN's and Mr Yan's commercial intentions in respect of the development. Mr Santisi first submits that the Development Approval that was assigned by 1VD under the Nomination Deed is not the Development Approval as defined but "something totally different", because it included studio apartments, and that no provision for studio apartments was made at cll 1.1, 24 and 25 and the Schedule of the Nomination Deed. However, as I noted above, 1VD's entitlement to the Final Instalment of the Nomination Fee was determined under cl 24.11 and the Schedule to the Nomination Deed which did not specifically address the position in respect of studio apartments.
Mr Santisi also refers, in closing submissions, to a suggested breach of the Nomination Deed arising from a suggested failure to obtain AEN's written approval for developments applications filed and any variations of them, but the material facts relevant to such an allegation were not identified in AEN's Amended Commercial List Cross-Claim Statement and I should not address it further. Mr Santisi also submits that 1VD breached the Nomination Deed because any variation was not a consequence of writing by the Council, authority or statutory requirement, and submits that 1VD breached the Nomination Deed by varying the apartment mix. I have addressed the qualified character of 1VD's obligations under cl 24.11 above, and noted the absence of an identified claim that it failed to use reasonable endeavours to achieve the specified apartment mix or car parking spaces, above. Mr Santisi also advances several other contentions that seems to me variations of those propositions, but also raise the questions whether the Development Approval included more than 22 one bedroom apartments, or there is an implied term of the Nomination Deed or a case for rectification or misleading or deceptive conduct is established. I address those issues below.
Mr Santisi also submits that prior negotiations and discussions, through an agent, could not be said to be merely introductory, presumably referring to Mr Yan's meeting with Mr Overton at the development site in October 2016, which Mr Yan had wrongly claimed Mr Coulston had attended. I need not address this submission further, since AEN did not raise, or identify the material facts underpinning, any claim against 1VD arising from any agency relationship between 1VD and Mr Overton. Mr Santisi also submits that, by 7 December 2016, Mr Yan had at least two sets of drawings, one showing a childcare centre and providing for 88 apartments of one, two and three bedrooms, and another with no childcare centre that provided for 96 apartments of one, two and three bedrooms and "had the benefit of all the representations such drawings contained". I will assume, without deciding, one or both sets of drawings had been provided to Mr Yan at that time. Those drawings conveyed no more than the existing plans for the development which may be able to proceed if (which had not yet occurred) the zoning of the property was changed to permit those plans to go forward and Council gave the necessary approvals. The later Nomination Deed plainly contemplated the making of later changes, including in the apartment mix and the number of parking spaces, and I have referred above to the manner in which such changes may affect the Final Instalment of the Nomination Fee.
Mr Santisi also submits that an earlier heads of agreement prepared by Mr Coulston and Mr Yan's instructions to his solicitors, which I addressed above, show his concern with obtaining no fewer than 96 apartments including only "one, two and three bedroom apartments". I accept that Mr Yan initially sought to obtain 96 apartments of that size, as did 1VD in its dealings with AEN, other potential counterparties and Council, and in heads of agreement which were drafted by 1VD for discussion with AEN and other potential counterparties. However, that outcome was plainly subject to contingencies including, obviously, whether the zoning of the property was changed to allow the development to proceed and Council's consent to the development. I accept that the parties then contemplated the inclusion of one, two and three bedroom apartments and prepared documents on the basis that would occur. I do not accept that they had then agreed any exclusion of studio apartments or apartments of less than 50 square metres from the project, as distinct from not then expecting their inclusion in the project. Mr Santisi also submits that the "real agreement" was to preserve a gross floor area of 8,000 plus square metres. I do not accept that any different "real agreement" has been established to that documented by the Nomination Deed. I will return to that issue in dealing with AEN's rectification claim below.
Mr Santisi also submits that Mr Yan said "he did not want any apartments less than 50 square metres in the mix" and submits that this by implication excluded studio apartments from the development. I do not accept that submission, given the evidentiary findings that I have reached above. I also do not accept Mr Santisi's submission that that position is corroborated by contemporaneous documents, because documents that record no more than an assumption or expectation at a point in time that the project will comprise one, two and three bedroom apartments do not evidence an agreement that smaller apartments could not be included in the future, particularly if statutory or Council requirements changed.
Mr Santisi also submits that the "real intent and agreement" of the parties was not reflected in the Nomination Deed and AEN seeks to imply a term that studio apartments were excluded as a matter of construction. I have not accepted that Mr Yan had required the exclusion of apartments of less than 50 square metres as at December 2016 and there was no reference to studio apartments, or to their exclusion, at that time, although I again recognise that both 1VD and AEN then expected that one, two and three bedroom apartments would be included in the project. Mr Santisi also submits that the Court should proceed on the basis that the parties were dealing with each other on the understanding that "studios and one bedroom apartments were the same". I do not accept that submission, where studio apartments and one bedroom apartments were different as a matter of ordinary usage, and plainly recognised as different in contemporaneous documents including the Apartment Design Guide, and the parties did not turn their minds to the position as to studio apartments as distinct from one bedroom apartments.
Mr Santisi further elaborated these submissions in a document headed "Defence Supplementary Submissions". His first submission, directed to the first part of cl 24.11, was, in substance that the requirements of cl 24.1(a)-(d) of the Nomination Deed were not satisfied, unless the qualification to those requirements in the second part of that clause was available. That appears to be common ground. As to the second part of that clause, he submits that:
"On a proper reading of this part, what is being stated, is that the agreed apartment/car parking mix, can be varied, provided such is as a requirement of the relevant statutory, authority and council, and that such requirement be expressed in writing. Clearly what is being stated is, if there is an express requirement to make a change, either it being from a relevant statutory source, authority source and council it must be in writing."
Mr Santisi submits that the words "Statutory or Relevant Statutory, Authority or Relevant Authority" [sic] in that clause are not defined and the Court is left to guess at their meaning and 1VD "should fail on this issue al[one]". It seems to me that, as a matter of ordinary usage and on construction of the Nomination Deed, at least SEPP 65 and the Apartment Design Guide, the LEP and DCP, and any requirement of the Council or the Land and Environment Court fall within that concept. Mr Santisi also submits that those statutory instruments were not "pleaded" by 1VD. I recognise the role of pleadings in this List and their significance for procedural fairness. However, there can be and was no suggestion that AEN was caught by surprise by 1VD's reliance on the primary statutory and regulatory requirements applicable to the project, particularly where it is represented in these proceedings by the same solicitor who represented it in the transaction and was party to contemporaneous communications as to the impact of those requirements.
Mr Santisi submits that the relevant requirement must exist at the time the change was "filed", namely 5 September 2018, implicitly a reference to the date of lodgement of the Further Amended DA with Council, and that excludes reliance on the order later made by the Land and Environment Court. I need not address that submission, given the finding I reach on other grounds below. He relies on the decision in Perpetual Trustee Company Ltd v Meriton Property Management Pty Ltd [2004] NSWSC 1528, which I drew to Counsels' attention and which I address below. He also submits that "[1VD] points to [Ex] P2, the planning instruments and supplementary documents in the second folder and in fact the whole LEC process to the date of order as the writing. That is clearly wrong and should [be] rejected." I have addressed the content of those requirements above and will return to their significance below. He also refers to Mr Dickson's and Mr Coulston's evidence as to these matters, which I have addressed above, and focusses upon Mr Dickson's acceptance that, unsurprisingly, none of the statutory requirements or Council had specifically required 17 studio apartments in the particular development, as distinct from imposing requirements of more general application as to the height and apartment mix in the project. He also sets out extracts from Mr Dickson's cross-examination at length, and I have had regard to those extracts and that cross-examination as a whole. Mr Santisi also points to the fact that the solicitors acting for 1VD in the LEC proceedings and officers of the Council did not give evidence for 1VD, but it seems to me that such evidence was neither necessary not desirable where events emerge clearly from the documentary record, and would have merely increased the length and cost of an already unreasonably long and costly hearing. He also contrasts that position with the proposition that Mr Ngo has been "wrongly accused and in fact falsely accused". I have addressed the issues as to Mr Ngo's credit and the manner in which AEN's affidavit evidence was prepared above.
Mr Santisi also identifies a question as to what the parties meant by "writing" in cl 24.11 of the Nomination Deed. There seem to me no difficulty in the construction of that term as a matter of general usage or in its contractual context, where the requirement for writing serves to avoid the risk of disputes as to whether Council had imposed oral requirements. SEPP 65 and the Apartment Design Guide, the LEP and DCP are plainly all in writing, and Mr Santisi's submission that there is no written requirement to introduce studio apartments or reduce the number of other apartments is simply a reformulation of the submission that their requirements are, unsurprisingly, of general application. Mr Santisi also submits that:
"As such, such writing reveals, that the need to make the change is choice driven and otherwise identifies the need to make the change as choice based and as such that change is able to be assessed as not in fact a consequence of anything in the rules but rather due to a choice, you can have 130 car parking but that means less apartments.
As such again the contract case fails as no right to make the changes in fact has been demonstrated."
I address the question of the choices made by 1VD in responding to the relevant requirements below.
However, it is still necessary to determine whether 1VD has satisfied the requirements of cl 24.11 of the Nomination Deed so as to preserve its entitlement to payment of the Final Instalment of the Nomination Fee under the Schedule, despite the change in the apartment mix and, to the extent the issue is properly raised, the number of car parking spaces. Mr McInerney submits, first, that the Final DA made in the LEC proceedings on 23 October 2018 was a determination by the Court in writing, having regard to the statutory requirements imposed by the town planning instruments found in the SEPP 65, the Apartment Design Guide, the LEP and the DCP, which was treated under the Nomination Deed as a determination by "Council" (as defined in cl 1.1 of the Deed to include the Court) of the Development Approval (as defined term in cl 1.1 the Deed also to include development approval by the Court) and that it varied the apartment and car parking mix stated in cl 24.11 of the Deed, "pursuant to the requirements of the relevant statutory, authority and Council requirements (provided such statutory, authority and Council requirements are in writing)", so as to fall within the variation proviso in cl 24.11 of the Nomination Deed. Alternatively, Mr McInerney submits that cl 24.11 was satisfied so far as the change in the apartment mix was necessitated by statutory or Council height and apartment mix requirements. Mr Santisi contests that proposition on the basis that the height requirement could have been satisfied by fewer and larger apartments and, as I noted above, neither the apartment mix requirement nor Council specifically required the inclusion of 17 studio apartments in the project.
Mr Santisi responds that it is "common ground" that there is no writing from Council and no authority or statutory requirement that "expressly call[s] for the introduction of 17 studio apartments". That proposition is correct in the limited sense that Council did not specifically identify a requirement for the inclusion of 17, rather than 16, 18 or 19 studio apartments, and incorrect so far as the DCP contemplated an apartment mix that would include studio apartments in an appropriate case. Mr Santisi in turn submits that the "only issue(s)" raised by Council was the "height violation" and the street setback in respect of the proposed development. I do not accept that submission, which is plainly inconsistent with the range of issues raised in the documents filed by Council in the LEC proceedings, to which I have referred above. Mr Santisi submits that 1VD made a choice to include 17 studio apartments, preserve 19 one bedroom apartments, and reduce the number of (or, in Mr Santisi's term, "sacrifice") two bedroom and three bedroom apartments and 18 car parking spaces in order to obtain Council approval. He submits that that reflected 1VD's choice of the best option under the Nomination Deed to "benefit and avoid penalty" and to "avoid the Sunset Date". Mr Santisi also points to the possibility that 1VD might have sought a voluntary development agreement with Council; it is not necessary to address that possibility further, where the material facts of that possibility were not identified in AEN's Commercial List Response and it is not a matter raised for the Court's determination.
In dealing with this issue, I am substantially assisted by the reasoning of Brereton J (as his Honour then was) in Birchill v Premier Holdings Pty Ltd [2011] NSWSC 1020 ("Birchill"), to which I drew Counsels' attention. His Honour was there dealing with the question whether a sale occurred "pursuant to this deed", as I am dealing here with whether a variation occurred pursuant to a statutory or council requirement. His Honour observed (at [35]-[37]) that:
"In Mercantile Mutual Life Insurance Co Ltd v Australian Securities Commission (1992) 40 FCR 409, Lockhart J said (at 424):
In my opinion, upon its true construction, the instrument of authorisation by use of the words "the Australian Securities Commission, pursuant to the provisions of subsection (1) of s 597 of the Corporations Law, hereby authorises …" is not stating that s 597 is the relevant source of power to authorise the third respondents to apply to the courts; rather, the words "pursuant to" are used in the sense of consequent to or conformable to or in accordance with. These three meanings are accepted meanings to the words "pursuant to" attributed by the Dictionaries, including the Oxford English Dictionary : meanings which accord with ordinary English usage in this country. This is, in my view, an accurate use of the words "pursuant to". Although s 597(1) is not the source of the ASC's power to authorise persons to apply to the court under s 597; it is the section which, for the reasons given earlier, determines the function of the ASC to which the power conferred by s 11(4) of the ASC Act attaches, and thereby enlivens the functions. Without a function of the ASC there is nothing to which the power conferred by s 11(4) can attach. The two are inevitably intertwined, though it is important to bear in mind that one is the function and the other the power. But without the function, the power has no operation. It is not therefore inaccurate for the second paragraph of the instrument of authorisation to use the language which it does.
In Brisbane City Council v Mainsel Investments Pty Ltd (1989) 2 Qd R 204, Kelly SPJ, with whom Matthews J agreed, said (at 222):
The learned judge found that it had not been established that Mainsel's proposed use was not use pursuant to and in accordance with the terms of the lease insofar as they disclose the particular use to which the land may be put and he found that the carrying out of the development as proposed by Mainsel would be done "pursuant to and in accordance with" the lease. The ordinary meaning of "pursuant to" in this context as appears from the Oxford English Dictionary, and as referred to in Garbin v Wild [1965] WAR 72 at 76, is "following upon, consequent and conformable to, in accordance with". In my opinion it could be said that the development the subject of the application by Mainsel was "in accordance with" the draft lease and it is not to the point that cl 3.11 is expressed as a negative covenant.
Those authorities indicate that while a relatively broad view may be taken of the words "pursuant to" (so that a lesser connection is required than the source of the power be the authority for the act), at least some connection between the act and the source of the power to which it is said to be pursuant is necessary."
Adopting an objective approach to cl 24.11 of the Nomination Deed, by reference to its text, context and purpose, and having regard to what a reasonable business person would have understood the terms of the clause to mean, and having all the background knowledge that would be reasonably available to 1VD and AEN at the time of the contract, it seems to me that the clause and the phrase "pursuant to" in that clause must be construed as requiring at least some connection, of a reasonably direct character, between the relevant statutory or council requirement and the variation to be made to the apartment mix as a result of that requirement. A reasonable business person would recognise that, if the variation proviso was interpreted as permitting any variation that 1VD sought to make, once a statutory or Council requirement existed, then it would deprive the apartment mix requirement in cl 24.11 of the Nomination Deed of any real content and would expose AEN to the risk that many changes, including changes that were highly adverse to it, could be justified as consistent with or promoting one of the widely phrased objectives in, for example, the DCP. However, a reasonable business person would also recognise that the variation proviso was directed to protecting variations that had a reasonably direct connection with Council or statutory requirements, including as to the height of and apartment mix in the development.
On balance, although with some hesitation, I am not satisfied that the variation proviso in the second part of cl 24.11 of the Nomination Deed is satisfied on the former basis put by Mr McInerney, by reference to the Land and Environment Court's orders, so as to prevent AEN declining to pay the Final Instalment of the Nomination Fee on the basis that the apartment mix provisions were not satisfied and claiming the return of that fee, although that clause would prevent its rescission of the Nomination Deed on that basis. It seems to me that, because the variation of the apartment mix and the introduction of studio apartments preceded any relevant requirement under those orders, where it was negotiated between the parties before those orders were made, it was not made "pursuant to" those orders.
However, also with real hesitation, it seems to me that a sufficiently direct relationship does here exist between at least the height requirement and possibly also the apartment mix requirement to satisfy the variation proviso in cl 24.11. I recognise that the change then made in the apartment mix, including the introduction of studio apartments, was one of several alternative means of complying with the height requirement in respect of the development, and addressing Council's insistence upon compliance with that requirement in the LEC proceedings. It is common ground between the parties that, and indeed Mr Santisi cross-examined Mr Dickson on the basis that, the reduction in the height of the building required that either the number of apartments contained in the building be reduced or the size of the apartments be reduced and the layout changed if the number of apartments was not reduced. I also accept Mr Dickson's evidence that the steps which were taken to introduce studio apartments into the development were received favourably by Council on the basis that they promoted the apartment mix requirement. I also recognise that, as Mr Santisi pointed out, the objective in respect of apartment mix in the DCP is one of several matters to be taken into account, and did not, in terms, mandate the inclusion of studio apartments if Council considered there were good reasons not to insist upon it or mandate the inclusion of a particular number of studio apartments.
It also seems to me likely that 1VD, in choosing whether to maintain the number of apartments and include several studio apartments in order to comply with the height requirement, and at the same time improve the development's compliance with the requirements as to apartment mix in the DCP, or instead to reduce the number of apartments to retain larger apartments and risk Council's continued opposition to the development because it did not meet the apartment mix objective, preferred its own interest in obtaining a prompt consent result in the LEC proceedings so as to avoid the expiry of the DA Sunset Date under the Nomination Deed, and satisfy the requirement for the number of apartments in the Nomination Deed to avoid the loss of the Final Instalment of the Nomination Fee. There can be no suggestion that it was not free to do so at general law, where it was not in a fiduciary relationship with AEN, it had not undertaken to prefer AEN's commercial interests to its own, and there was nothing in the Nomination Deed that required it to advance AEN's interest in having the opportunity to terminate that Deed, because Development Application was not approved before the DA Sunset Date, or in avoiding payment of the Final Instalment of the Nomination Fee, to its own contrary commercial interest in receiving that Final Instalment.
It seems to me that the fact that other alternative courses were available to 1VD in response to the height requirement and the apartment mix requirement, including reducing the number of apartments so as to include fewer studio apartments and more one, two or three bedroom apartments, possibly to the economic advantage of AEN and certainly to 1VD's disadvantage in respect of its entitlement to the Final Instalment of the Nomination Fee, does not displace the fact that the choice which was made had a sufficient connection with the height requirement which prevented the building proceeding in its previous form and with the apartment mix requirement that was promoted by that choice. On that basis, the choice to take the option that advantaged 1VD rather than AEN, rather than a contrary choice which advantaged AEN and disadvantaged 1VD, in that situation was nonetheless "pursuant to" that statutory and Council requirement as to the height of the building or the apartment mix. That choice was one of the choices available to address that issue, although other choices would also have done so and would also have been "pursuant to" that requirement.
I reach that conclusion as a matter of construction of cl 24.11 of the Nomination Deed in the relevant commercial context, and having regard to the approach taken in Birchill. I recognise that it is arguably not consistent with the construction given to a clause that used different language in Perpetual Trustee Company Ltd v Meriton Property Management Pty Ltd above, which I had drawn to Counsels' attention and on which Mr Santisi relies. The clause in issue in that case prevented, inter alia, a rescission or termination of a contract "because of" a minor variation "arising from" the requirement of a consent authority or Land and Property Information New South Wales. Bergin J (as her Honour then was) there observed (at [100]) that:
"In my view, for a variation to the s 88B Instrument to qualify as one "arising from a requirement of Council" in the context of this Contract, it would have to be a necessary consequence of the requirement and not merely one that the party benefiting from such variation would prefer to have in place. This easement is not a necessary consequence of the requirement to move the boundary. Indeed the Council condition of consent making it a matter of choice supports such a conclusion. I am not satisfied that this easement arises from a requirement of Council."
Mr McInerney submits that, whether or not Bergin J was correct in expressing the opinion that, in the context of the words "arising from a requirement of Council", "it would have to be a necessary consequence of the requirement and not merely one that the party benefiting from such variation would prefer to have in place", that conclusion is of limited utility, because it is confined to the proper interpretation of the phrase in question, in the specific circumstances of the contract in issue in that case, and "says nothing whatsoever about whether a differently worded clause, such as the qualification clause 24.11, should be construed in the same way". It seems to me that Bergin J's approach in Perpetual Trustee Company Ltd v Meriton Property Management Pty Ltd should be distinguished where it deals with different language, and I should give greater weight to the approach in Birchill which deals with the same concept in a commercial context. The approach that I have taken, although with hesitation, also seems to me to be consistent with the principles of construction to which I have referred above.
I accept Mr McInerney's submission that the Final DA granted on 23 October 2018 by the Land and Environment Court contained 21 one bedroom apartments (which are distinct from studio apartments as I have held above) and did not contain more than 22 one bedroom apartments for the purposes of the limitation to the variation proviso in cl 24.11 of the Nomination Deed. I therefore do not accept AEN's alternative contention that it was entitled to rescind the Nomination Deed on the basis that the Development Approval contained more than 22 one bedroom apartments for the purposes of cl 24.11, because that was not the fact.
Where I have reached this conclusion, and subject to the implied term for which AEN contends and the other matters raised in AEN's Amended Commercial List Cross-Claim Statement, I accept Mr McInerney's submission that the Final Instalment of the Nomination Fee of $1,419,736 was payable under cl 24.1 and item 2(c) of the Schedule to the Nomination Deed, where there were 96 residential apartments (including studio apartments) within the Development Approval, "subject to [1VD] serving on the [AEN's] Solicitor a copy of the Development Approval on or before the DA Sunset Date". The "DA Sunset Date" was in turn defined in cl 1.1 as, in effect, 18 months after Council, the NSW Department of Planning, or the Greater Sydney Commission, had gazetted the LEP approving a floor space ratio of 4:1, which occurred on 26 May 2017, and the DA Sunset Date was therefore 26 November 2018. That requirement is satisfied since, on 25 October 2018, 1VD notified AEN that the Court had granted approval to the Final DA on 23 October 2018, and attached a copy of the Final Development Approval comprised of the Notice of Orders made by the Land and Environment Court and also attached a zip file with copies of the tax invoices incurred by AEN in respect of the development application which, on their face, were in excess of $200,000 plus GST.
I also accept Mr McInerney's submission that, under cll 24.7-24.8 of the Nomination Deed, on release of the Final Instalment of the Nomination Fee, AEN was required to reimburse 1VD all reasonable consultant costs and other costs, evidenced by way of valid tax invoices, incurred by AEN for the preparation of the Development Application documentation and any lodgement fees, etc, with such fees to be capped at $200,000 plus GST. The tax invoices as to costs in respect of the Development Application record, on their face, apparently reasonable costs totalling at least $200,000 plus GST. In closing submissions, Mr Santisi submits, by no more than bare assertion, that 1VD's claim for $200,000 by way of costs is not made out, because the costs do not meet the definition in cl 24.7 of the Nomination Deed. In his Defence Supplementary Submissions, he takes that proposition no further, submitting only that:
"A review of the costs in fact sought to be claimed, does not meet the definition in clause 24.7. A review of the tender material reveals that those that meet that definition in fact are fare [sic] less than $200,000."
The content or detail of that review is not further disclosed. The Court is not obliged to formulate for itself the objections that AEN may have taken to particular costs, had it articulated them, and it would deprive 1VD of procedural fairness for me to do so. Where Mr Santisi did not elaborate this submission beyond bare assertion, I do not accept it.
1VD therefore succeeds on its primary claim, subject to the implied term for which AEN contends and the several other matters raised in AEN's Amended Commercial List Cross-Claim Statement.
Macfarlan JA also there noted that an implied term should not be found in that case where it was only necessary to make the contract work in a manner that enhanced one party's opportunity to exercise an option. His Honour also pointed (at [28]) to examples of inconsistency between express and implied terms, including Besier v Foster (1952) 94 CLR 526 at 530; [1952] HCA 14 where it was held that the proposed implication "disregards what the words say and attempts to introduce into them a change of actual meaning"; Sanders v Snell (1998) 196 CLR 329; [1998] HCA 64 at [16] where it was held that to imply a term into an employment contract which expanded the circumstances in which the employer could make payment of salary to the employee in lieu of notice of an intention to terminate the employment "would fly in the face of the express provisions in the agreement"; and Ikin v Danish Club "Dannebrog" Inc [2001] VSCA 123 at [17] where an attempt at implication failed because its effect would have been to add into a written contract of employment an additional ground for dismissal beyond those stated in the contract.
It seems to me that the relevant provisions in the Nomination Deed were not unworkable such that it was necessary to imply a term to give them business efficacy although, as events developed, they did not restrict the inclusion of studio apartments in a manner that may have advanced AEN's commercial interests in some circumstances, or possibly frustrated them if the development could not proceed without including such apartments. It cannot be said that the need to imply a term to prevent studio apartments would have been regarded by a reasonable bystander as so obvious that "it goes without saying", and a reasonable bystander might well have consider that it would be desirable to permit the inclusion of such apartments if the development would not otherwise be approved. The pleaded expression of the term is not clearly expressed but convoluted and obscure. It also contradicts the express terms of the Nomination Deed, so far as it would constrain the express permission to amend the apartment mix to address regulatory requirements, which plainly could require the inclusions of studio apartments within the development. Finally, as in Codelfa and Hobhouse, the Nomination Deed is a "detailed and comprehensive" contract, in which such a term would not readily be applied. For these reasons, the pleaded term cannot be implied.
Mr Santisi addressed the factual basis of the rectification claim, which was pressed, although he did not address the applicable legal principles. It is sufficient for present purposes to set out Rees J's helpful summary of those principles in Property Investors Alliance Pty Ltd v C88 Project Pty Ltd (in liq) [2022] NSWSC 1081 at [72]ff as follows:
"There is no dispute as to the principles. As Gageler, Nettle and Gordon JJ explained in Simic v New South Wales Land and Housing Corp (2016) 260 CLR 85; [2016] HCA 47 at [103] -[104] :
"Rectification is an equitable remedy, the purpose of which is to make a written instrument "conform to the true agreement of the parties where the writing by common mistake fails to express that agreement accurately". For relief by rectification, it must be demonstrated that, at the time of the execution of the written instrument sought to be rectified, there was an "agreement" between the parties in the sense that the parties had a "common intention", and that the written instrument was to conform to that agreement. Critically, it must also be demonstrated that the written instrument does not reflect the "agreement" because of a common mistake. Unless those elements are established, the "hypothesis arising from execution of the written instrument, namely, that it is the true agreement of the parties" cannot be displaced.
The issue may be approached by asking - what was the actual or true common intention of the parties? There is no requirement for communication of that common intention by express statement, but it must at least be the parties' actual intentions, viewed objectively from their words or actions, and must be correspondingly held by each party."
Rectification may be available where a common mistake is as to the legal effect of the words used, rather than as to the actual words used: Bush v National Australia Bank (1992) 35 NSWLR 390 at 406 (per Hodgson J).
As to proof of actual intention, the Court views the evidence of actual or subjective intention "objectively, in the sense that it does not merely accept what a party says was in his or her mind, but instead considers and weighs admissible evidence probative of intention. … [P]roof to the necessary standard will usually require some manifestation of the intention of each party by their words or conduct and that the requisite common intention will be a matter of inference for the court from that evidence": Simic at [42]-[43] (per Kiefel J). Where a corporation is involved, the primary consideration in determining the intention of the corporation is the state of mind of the person who acted: Igloo Homes Pty Ltd v Sammut Constructions Pty Ltd [2005] NSWCA 280 at [89] , referring to Johns v Australian Securities Commission (No 2) (1992) 35 FCR 146 at 172 (per Black CJ and Von Doussa J); Arthur Yates & Company Pty Ltd v Vegetable Seeds Committee (1945) 72 CLR 37 at 69 (per Latham CJ), 76 (per Starke J) and 82 (per Dixon J).
The onus on the party seeking rectification is a heavy one: Newey v Westpac Banking Corporation [2014] NSWCA 319 at [170] (per Gleeson JA). The agent accepted that it was necessary to establish "in the clearest and most satisfactory manner" or by "clear and convincing proof" that, at the time it entered into the Sole Agency Agreement, the parties had a common intention concerning their agreement which is not reflected in the written contract: Australian Gypsum Ltd & Australian Plaster Co Ltd v Hume Steel Ltd (1930) 45 CLR 54 at 64 (per Rich, Starke and Dixon JJ); Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336 at 349 (per Mason J); Igloo Homes (per Ipp JA, with whom Santow JA agreed)."
Mr McInerney rightly points out that AEN's cross-claim identifies no material facts to support a rectification claim in equity whether for unilateral mistake or common mistake. This is not merely a pleading point, where it would be a denial of procedural fairness for a claim for rectification to be established by reference to findings of fact which 1VD has not had the opportunity to meet. It appears from Mr Santisi's submissions that claim is based on the proposition that the "real agreement" of the parties, to which Mr Santisi referred, was that no apartment in the development was to be less than 50 metres square in internal area excluding the balcony, implicitly even if Council would not approve the apartment without the inclusion of smaller or studio apartments. I have not accepted that that agreement has been established. This claim cannot succeed, both because the material facts on which it relies have not otherwise been identified and because the findings I have reached above do not support it.
In Atlas at [211], I accepted Counsel's summary of the matters relevant to whether misleading and deceptive conduct is established as follows:
"The case law on misleading conduct is legion. However, the principles governing the matters in issue in the present case are likely to be uncontroversial. Relevantly: -
Whether conduct is misleading or deceptive is a question of fact to be determined objectively, by reference to all of the relevant circumstances …
It is uncontroversial that misleading conduct can be established where a misrepresentation was but one of a number of factors which induced a loss-making decision… It is sufficient if the misrepresentation in question is a though not the cause of loss, and that it materially contributed to the claimant's loss: …
Contravention of the provisions does not require proof of intention on the part of the representor …
The question for the Court will be whether loss has been caused "by" contravening conduct; thus, third parties may rely upon the conduct of a misrepresentor …
The Court is required to determine what the conduct gives the complainant to understand or what is to be taken from such conduct …
A representation may be misleading, although apparently true, if it masks an underlying falsity …" [citations omitted]
A claim under s 20 of the Australian Consumer Law is directed conduct that is unconscionable within the meaning of the unwritten law of the states and territories. That section will at least be contravened by conduct within the four classes of cases identified by French J at first instance in Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2000) 96 FCR 491; 169 ALR 324 at 331; [2000] FCA 2, namely, exploitation of vulnerability or weakness; the abuse of a position of trust or confidence; insistence upon rights in circumstances which make that hard or oppressive; or inequitable denial of legal obligations. The wider scope of claims for statutory unconscionability has been recognised in cases including Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1; (2019) 368 ALR 1; [2019] HCA 18 and Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd (2021) 388 ALR 577; (2021) 151 ACSR 98; [2021] FCAFC 40.
AEN's puts its misleading and deceptive conduct and unconscionability claims in its Amended Commercial List Cross-Claim Statement as follows:
"15 Further and in the alternative [AEN] says that [1VD] at all material times by its employees and agents and [Mr Coulston] from 7 December 2016 to 22 December 2016 made representations that the Development Approval that would be applied for and obtained for the purpose of assigning such approval to the benefit of [AEN] would provide for and contain no apartment of less than 50 square meters internal area and excluding the balcony area in such calculation such that no apartment was to be less than such size and that in so far as only one bedroom or one sleeping facility apartments were to be provided in the mix of apartments that there would be no more than 22 such apartments as providing for only one bedroom and/or one sleeping facility and that in the event there was more than 22 such apartments or any apartment with less than 50 square meters in internal area and excluding balcony area in such calculation, then notwithstanding anything else in the Nomination Deed it would within the discretion of [AEN] and it was so entitled to rescind the Nomination Deed and obtained a refund of the Final Instalment amount, if such were to be the result and at no time disclosed and otherwise remained silent that it would seek to make use of the Apartment Design Guide to try and classify studio apartments as anything other than a one bedroom apartment or other than a one sleeping facility.
16. Such representations and such silence were calculated to cause the [AEN] to execute and enter into the Nomination Deed and to otherwise pay the full Nomination Fee and to allow part release of the Nomination Fee and cause the Final Instalment to continue to be held to date.
17 At no time to 25 October 2018 did [1VD and Mr Coulston] disclose that they did not intended to comply with its representations and that they would otherwise use the Apartment Design Guide in a way that it was not intended and agreed to be used and in a way that was contrary to the representations and the silence engaged in as between 7 December 2016 to at least 25 October 2018.
18 In fact as from 25 October 2018 [1VD and Mr Coulston] have sought to use the Apartment Design Guide to say that a studio apartment was different to a one bedroom apartment, despite it only providing for one sleeping facility.
19 In the premises the conduct of [1VD and Mr Coulston] as herein pleaded 15 to 18 herein, is conduct that is in contravention of either or all of sections 18, 20, 29, 30, 151 and 152 of the Australian Consumer Law as it is in Schedule 2 of the Competition and Consumer Act 2010 ("ACL"), by reason of the material facts pleaded herein."
In addressing these claims, I bear in mind that an Amended Commercial List Cross-Claim Statement is not, strictly, a pleading: Icon Co (NSW) Pty Ltd v Owners - Strata Plan No 97315 [2022] NSWCA 114 at [12]. However, the Amended Commercial List Cross-Claim Statement performs the same functions as a pleading in allowing procedural fairness to the cross-defendant and identifying the issues to be decided by the Court: Gunns Ltd v Marr [2005] VSC 251 at [57]; Young v Holmes [2013] NSWSC 580 at [82]; Re Graziers Pastoral Pty Ltd; Re Windsor Livestock Holdings Pty Ltd; Re Windsor Livestock Pty Ltd [2021] NSWSC 1680 at [51].
I now turn to the material facts identified by AEN in respect of this claim. First, AEN contends that, between 26 April 2016 and 11 October 2016, the architects retained by 1VD prepared drawings in versions A to F which did not include any studio apartments, and versions D and F were provided to Mr Yan. There is no suggestion that there was any intention to include studio apartments in the development at this time, prior to the requirements introduced by the DCP, and these matters are outside the time period to which AEN's representational claim is directed. Second, AEN contends that, in October 2016, Mr Yan undertook a site inspection with a Mr Overton who provided drawings that did not include studios; that Mr Yan expressly identified that he did not want any apartments less than 50 square meters and sought exclusion of a child care centre and the inclusion of larger apartments; that Mr Overton stated that was achievable and changes could be made; that the drawings did not provide for studio apartments but only for one, two and three bedroom apartments and that Mr Overton made a number of representations concerning the apartment mix, and studio apartments were not mentioned as being included. AEN also contends that, in December 2016, within the time period to which the representational claim is directed, meetings took place between representatives of 1VD and AEN which I have addressed above in dealing with the chronology of events and affidavit evidence. AEN contends that, at a meeting with Mr Coulston on 7 December 2016, Mr Yan communicated the same wishes as he had expressed to Mr Overton and the apartment mix was confirmed by Mr Coulston, and that Mr Coulston and Mr Overton issued emails after that meeting setting out proposed terms and making the version D and F drawings available for discussion. AEN also contends that the same representations were made at a meeting at the offices of 1VD's solicitors on 8 December 2016, attended by Mr Yan, Ms Wang, Mr Ngo, Mr Overton, Mr Coulston and Mr Garling. I do not accept Mr Yan's evidence of this meeting for the reasons noted above.
Mr McInerney responds that, in AEN's evidence in chief, Mr Yan initially identified two relevant meetings , namely a meeting on the development site at Kogarah attended by Mr Overton, Mr Coulston and Ms Wang (but not Mr Ngo) and a meeting in the Sydney central business district attended by Mr Overton, Mr Coulston and Ms Wang (but not Mr Ngo) where Mr Coulston made the alleged representations. Mr Ngo's evidence was initially that he had not attended any meeting with Mr Yan and Ms Wang in respect of the development before 22 December 2016. Mr McInerney also points out that, in reply, Mr Yan acknowledges that the meeting on site at Kogarah in October 2016 was attended only by Mr Yan, Ms Wang and Mr Overton (although, I interpolate, it appears that Ms Chen was also present), and Mr Coulston was not present at that meeting; there was a meeting at Mr Yan's restaurant in George Street on 7 December 2016 attended by Ms Wang, Mr Ngo, Mr Overton and Mr Coulston, where Ms Wang translated certain representations made by Mr Coulston to Mr Yan; and there was a meeting at 1VD's solicitors' office on 8 December 2018 attended by Mr Overton, Mr Coulston, Ms Wang, and Mr Ngo, where Ms Wang translated the representations made by Mr Coulston to Mr Yan. In reply, Mr Ngo changed his evidence to indicate that he was present at the meeting at 1VD's solicitors on 8 December 2016. I have addressed Mr Yan's and Mr Ngo's evidence and their cross-examination above. Mr McInerney submits that the evidence of Mr Yan and Ms Ngo as to their respective recollections about the two meetings in early December 2016 is unreliable and should not be given any weight.
The October 2016 meeting is outside the time period to which the representational claims is directed, Mr Yan has now accepted that Mr Coulston did not attend it, and no claim is advanced in respect of Mr Overton. I have reached findings in respect of the December 2016 meetings above. The terms of the Nomination Deed were in any event inconsistent with any obligation to exclude studio apartments or apartments of less than 50 square metres, particularly if they were required in order to meet height restrictions and satisfy apartment mix requirements under the DCP as noted above.
The representations pleaded in paragraph 15 of the Amended Commercial List Cross-Claim Statement, as set out above, are alleged to have been made between 7 and 22 December 2016, and I have referred above to the meetings and circulation of draft documents which took place prior to the execution of the Nomination Deed on 22 December 2016. The content of the representations is identified in that paragraph as, first, a positive representation in the text italicised in paragraph 191 above and, second, an absence of disclosure, namely that 1VD did not disclose that "it would seek to make use of the Apartment Design Guide to try and classify studio apartments as anything other than a one bedroom apartment or other than a one sleeping facility". Even putting aside the fact that I cannot place reliance on Mr Yan's evidence for the reasons noted above, I am satisfied that a representation of that complex character cannot be found in the conversations and exchange of documents prior to 22 December 2016. It is apparent that, not surprisingly, 1VD recognised that its ability to deliver an apartment mix depended on statutory and council requirements and the exchange of draft agreements made absolutely clear that it would not and did not commit to delivering any such mix irrespective of such requirements, still less did it represent the Final Instalment of the Nomination Fee would be repaid to AEN if that did not occur. The premise of AEN's non-disclosure case is not established, since the Apartment Design Guide itself treated studio apartments and one bedroom apartments as different, as one might expect as a matter of general usage, and irrespective of any conduct of 1VD, and it has not been established that 1VD has sought to use that Guide for the impugned purpose.
The allegation in paragraph 16 of the Amended Commercial List Cross-Claim Statement is not established where the alleged representations are not established. The allegations in paragraph 17 and 18 of the Amended Commercial List Cross-Claim Statement are not established, since no intention not to comply with the alleged representations is established where they are not shown to have been made, and there is no basis to find that 1VD has used the Apartment Design Guide in the manner alleged in paragraph 17, or done anything other than to treat that document as part of the applicable regulatory regime, as it is.
The contraventions alleged in paragraph 19 of the Amended Commercial List Cross-Claim Statement relate to misleading and deceptive conduct (s 18), unconscionable conduct within the meaning of the 'unwritten law' (s 20), the making of false or misleading representations about goods or services (ss 29 and 151) and false or misleading representations in respect of the sale of land (ss 30 and 152). Mr Santisi addresses the claim in unconscionability briefly in his "Defence Supplementary Submissions" as follows:
"The other issue that arises on the contract case, on a proper construction, is what did the parties objectively, in fact contemplate when applying the formula, on a proper construction and to give business efficacy, it could only be that the 96 apartments contemplated in the schedule, is 96 of the type in fact agreed. This is in fact were the unconscionability arises, in that it would in all the circumstances be unconscionable, to count studios, as apartments."
The contraventions alleged in paragraph 19 of the Amended Commercial List Cross-Claim Statement are not established, where the factual premises of the allegation are not established. Where the Nomination Deed was negotiated between commercial parties, represented by legal practitioners who exchanged several drafts and did not seek to exclude studio apartments from the number of "residential apartments" for the purposes of the calculation of the Nomination Fee in the Schedule, there is nothing unconscionable in permitting its operation in accordance with its terms. It is not necessary to address AEN's claim for damages in paragraph 20 of the Amended Commercial List Cross-Claim Statement where neither its factual premises nor the alleged contraventions are established.
In paragraphs 21-25 of the Amended Commercial List Cross-Claim Statement, AEN then pleads as follows:
21 Further [AEN] states that [1VD] prior to the execution of the nomination deed made representations as to the type of development application that would be made and prosecuted and in fact could be achieved as to the type of apartment mix and number on the subject land (The "Representations").
22 The Representations where [sic] made, by [1VD], in circumstance that it knew or ought to have known that such apartment mix as promised, could not be achieved, yet knowing such, made such the representations, intended to induce [AEN] into executing the Nomination Deed and perfuming [sic] its obligation. (The "Inducement")
23 The Representations and Inducement where made, knowing if it were not for such representations and inducement as to future matters [AEN] would not have executed the Nomination Deed as it did and performed its obligations.
24 The Representations and Inducements as to such future matters were made knowing or in circumstance that [1VD] ought to have known that such was, False and Deceptive and Misleading.
25 By reason of the conduct at paragraph 21 to 24 of the further conduct as herein pleaded of [1VD], [AEN] suffered damages, namely the other instalment payments and the holding cost of the land that it has not been able to develop as expected.
Paragraph 21 of the Amended Commercial List Cross-Claim Statement does not identify the content of any such representation, or when it was made, or by whom it was made for 1VD, or to whom it was made for AEN, other than by identifying a general subject matter (the type of development application, the apartment mix and apartment number) and, importantly, does not identify any material fact that any representation was made that a particular apartment mix or number of apartments could be achieved. It is at least clear that those representations are alleged to have been made prior to entry into the Nomination Deed, and I have noted above that the prior exchange of draft agreements made clear that AEN would not and did not commit to delivering the apartment mix or number of apartments initially sought by 1VD irrespective of relevant statutory and council requirements.
Paragraph 22 of the Amended Commercial List Cross-Claim Statement does not identify the basis on which the unidentified apartment mix could not be achieved, or who for AEN is alleged to have that knowledge, or any material facts that had the consequence that the unidentified apartment mix could not in fact be achieved. To the extent that any "promise" was made as to that matter in the Nomination Deed, it was qualified in the manner noted above. Paragraph 23 raises a suggestion the unidentified representations and unidentified inducement were as to future matters, but that cannot be assessed where their content is not disclosed. Paragraph 24 does not identify any material facts to support its premise that the unidentified representations and inducements (now in the plural) were false, deceptive or misleading, still less that 1VD had knowledge of such a matter. The allegation in paragraph 25 is not established, because its factual premises are not identified, still less established.
AEN's claims for misleading and deceptive conduct and unconscionability and its allegations of statutory contraventions are therefore not established
Fourth, AEN seeks:
"A declaration that on a proper construction of the Nomination Deed it required [1VD and Mr Coulston] from on or about 22 December 2016 and at all times thereafter to make application to be lodged and any amendment of it to be lodged or filed such that the Development Approval to be obtained and assigned was one that as a minimum 'did not provide and include for more than 22 apartments with a single sleeping facility namely be they, one bedroom apartments or otherwise defined that there be no more 22 [sic] apartments that allowed for just one facility as a dedicated sleeping facility or part of an open plan sleeping facility and that in fact no apartment in the mix be less than 50 square metres of internal area (excluding balcony area) in such a calculation."
That declaration could not be made both because it does not reflect the proper construction of the Nomination Deed and because Mr Coulston was, as I noted above, only party to the Nomination Deed as a guarantor and AEN did not plead the material facts of any breach of his obligations in that respect. Fifth, AEN seeks a declaration that the Nomination Deed has an implied term in the same terms as stated in the fourth declaration above. That declaration also cannot be made, because an implied term of that kind is not established.
Sixth and seventh, AEN seeks two orders for rectification of the Nomination Deed and a consequential order. Those orders should not be made since AEN's claim for rectification is not established. The eighth order sought by AEN is consequential on the making of rectification orders and should not be made where they are not made.
Ninth, AEN seeks a declaration that:
"[A] studio apartment was never intended as between the parties to be counted as an apartment for the purposes of the Nomination Deed such any [sic] studio apartment or in fact any apartment of less than 50 square metres in internal area excluding balcony area shall not be counted as one apartment unless the sum of such area equals 50 square metres of internal area excluding balcony area."
To the extent that this declaration is directed to the subjective intention of the parties, there is no utility in making it, and it is otherwise not necessary where I have determined the relevant issues in the judgment and it would be merely anterior to any relief. Tenth, AEN seeks a declaration that the development approval obtained by 1VD yielded less than 96 apartments and in fact yielded less than 84 apartments. The basis for that declaration is not established, as a matter of fact, and it cannot be made. Eleventh, AEN also seeks a consequential declaration that, by reason of the ninth and tenth declarations sought, it is entitled to a refund and release of the Final Instalment amount in accordance with cl 24.1 and item 2(c) of the Schedule and/or cll 24.2 and 24.11 of the Nomination Deed. That declaration cannot be made, because the matters sought in the ninth and tenth declarations are not established and because it has no such entitlement.
Twelfth, AEN seeks an order, by way of specific performance of the Nomination Deed, that AEN and Mr Coulston direct the solicitors holding the first instalment amount to release and refund it to AEN, pursuant to cll 24.1, 24.2, 24.11 and item 2(c) of the Schedule to the Nomination Deed or, alternatively, 1VD and Mr Coulston pay the sum of $1,419,736 plus GST to AEN. That declaration cannot be made given the findings that I have reached above. There would in any event be no basis for making such an order against Mr Coulston where AEN did not plead the material facts of any breach of his obligations as guarantor under the Nomination Deed in that respect. Thirteenth and fourteenth, AEN seeks equitable damages and damages. No basis for equitable damages or damages was established.
Fifteenth, AEN seeks a declaration that 1VD's and Mr Coulston's conduct is in contravention of certain provisions of the Australian Consumer Law. The basis for that declaration is not established given the findings I have reached above. Sixteenth, AEN claims damages or other relief consequential on the fifteenth declaration, and the basis for that relief is not established where the basis for that declaration is not established. Seventeenth, AEN seeks interest which is not established where a claim for damages or compensation is not established Eighteenth, it seeks costs, and I will deal with the question of costs below. Nineteenth, it seeks such further orders as the Court seems fit, and the question of further orders in respect of its liability as to costs may arise after judgment.
Twentieth, AEN seeks an order that:
"at all material times leading up to the execution of the Nomination Deed on 22 December 2016, [1VD and Mr Coulston] engaged in conduct or otherwise made representations as to the Development Application that could be achieved in the future, which representations and conduct was intended to induce [AEN], to execute the Nomination Deed, which conduct and representation, were misleading and deceptive and in fact false as to the Development application that could in fact be achieved, knowing that such conduct was unconscionable and representations were in fact misleading and/or deceptive and false, in breach of section[s] 18, 20, 21, 29, 30, 151 and 152 of the [Australian Consumer Law]."
An order, as distinct from a declaration, could not be made in that form. Had it been sought, a declaration also could not be made in that form, because it does not reflect the findings that I have reached above. To the extent that order is premised on a claim for misleading or deceptive conduct or unconscionability, that claim was not established. To the extent that it is premised on 1VD and Mr Coulston having actual knowledge that representations were false, akin to fraud, the basis for making such a declaration was neither properly raised in the Amended Commercial List Cross-Claim Statement nor established.
Twenty-first, AEN seeks damages, identified as payments made to 1VD and Mr Coulston being all of the instalment amounts already released and holding costs. That order could not be made on the findings that I have reached above and because AEN has not established a cause of action that would result in an award of damages, nor has it quantified the amount of damages that could be awarded, where its quantified claim does not allow for the benefit which it has obtained from ownership of the land and the development opportunity in respect of the land, and it does not quantify the holding costs that it claims.
However, on 14 August 2019, Mr Ngo responded (Ex D1, 1119) that:
"We are instructed that [AEN] does not agree to your proposal and will rely on the Deed of Nomination. Should you terminate, we have instructions to accept legal proceedings in the Supreme Court and seek specific performance."
While that letter did not specifically address 1VD's reservation of its right to vary the apartment and car park mix, it seems to me that it made clear enough that AEN was relying on its rights under the Nomination Deed and not accepting any alternative proposal. Although further correspondence followed, AEN did not then adopt any different approach which could have encouraged 1VD to any view that AEN was consenting to studio apartments or doing anything other than seeking to avoid paying the Final Instalment amount and place in itself in a position to take advantage of the expiry of the DA Sunset Date under the Nomination Deed.
1VD refers, third, to emails dated 23 and 26 September 2018 referring to a change of unit mix to include "6 studio serviced apartments". As I noted above, on 23 September 2018, Mr Coulston emailed Mr Huang and Mr Ngo providing an update regarding the Development Application process, including the reduction in height and variation of the apartment mix, which formed part of the Final DA (Ex P6, 2647). On 26 September 2018, Mr Coulston emailed Mr Ngo outlining the Council's remaining issues with the Final Development Application, and stating that one of the strategies being used was the inclusion of smaller Apartment Design Guide compliant studio apartments into the apartment mix (Ex P6, 2648).
1VD also refers to further emails dated 5 October 2018 and 14 October 2018. On 4 October 2018, Mr Dickson's firm emailed amended architectural plans for inclusion in the Final Development Application to Mr Coulston (Ex P6, 2654) and, by email dated 5 October 2018, Mr Coulston sent a copy of the final architectural plans to Mr Ngo (Ex P6, 2656, 2658). On 14 October 2018, Mr Coulston advised Mr Ngo that approval from Council was likely to be obtained in accordance with the final architectural plans sent to Mr Ngo on 5 October 2018 (Ex P6, 2717).
1VD pleads that AEN did not communicate any objection to those matters and, by its silence, represented from August 2018 onwards that it had no such objection and, in reliance on that representation, 1VD procured the Final DA, incurred costs in doing so and thereby acted to its detriment. By its Commercial List Reply to the Commercial List Cross-Claim Response, AEN responds to that claim in somewhat convoluted terms as follows:
"In further reply [AEN] denies that any transaction or matter arose that gives rise to an estoppel be it common law or equitable estoppel or promissory estoppel or otherwise and denies that [1VD] is entitled to raise such estoppel as it at all times knew that [AEN] was not consenting to any proposed changes to the Development Application and was relying on the Nomination Deed and as such anything done by [1VD] was as a volunteer not as a result of any promise or representation or things said or not said or done or not done arising and in fact [AEN] denies making any promise or representation of any nature be it oral or by any conduct."
The applicable principles in respect of a claim for a promissory or representational estoppel were summarised in Waltons v Maher where Brennan J observed (at 428) that, to establish an equitable estoppel, the plaintiff must first prove that:
"… the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship."
In Silovi v Barbero (1988) 13 NSWLR 466 at 472, Priestley JA (with whom Hope and McHugh JJA agreed) summarised the principle arising from Waltons v Maher as requiring, relevantly:
"the creation or encouragement by the defendant in the plaintiff of an assumption that … a promise be performed, and reliance on that by the plaintiff, in circumstances where departure from the assumption by the defendant would be unconscionable."
In Verwayen, Deane J observed (at 444) that the law does not permit an unconscientious departure by one party:
"from the subject matter of an assumption which has been adopted by the other party as the basis of some relationship, course of conduct, act or omission which would operate to that other party's detriment if the assumption be not adhered to for the purposes of the litigation."
I also bear in mind Ball J's summary of those principles and the differences between the relevant forms of estoppel in Twigg v Twigg (No 4); Lambert v Twigg Investments Pty Ltd (No 3) (2020) 147 ACSR 389; [2020] NSWSC 1159 at [147]-[149], as follows:
"In order to make out a promissory estoppel, [a party] must establish (to apply the principles as summarised by Brennan J in Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at (428-9) that (1) he assumed [a relevant matter]; (2) the [other party] induced him to adopt that assumption; (3) he acted in reliance on that assumption; (4) the [other party] knew he intended to do so; (5) his conduct will occasion detriment if the assumption is not fulfilled; and (6) the [other party] has failed to act to avoid that detriment.
In order to make out a conventional estoppel, [a party] must prove (to apply the principles as summarised by Brereton J in Moratic Pty Ltd v Gordon [2007] NSWSC 5 at [32] and approved by the Court of Appeal in Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65 at [200]) that (1) [the party] adopted an assumption as to the terms of [its] legal relationship with [the other party]; (2) [the other party] adopted the same assumption; (3) both parties conducted their relationship on the basis of that mutual assumption; (4) each party knew or intended that the other act on that basis; and (5) departure from the assumption will occasion [the first party] detriment.
The principal difference between the two forms of estoppel is that in the case of promissory estoppel, the party estopped must have induced the other party to adopt a particular assumption but need not have held that assumption themselves whereas, in the case of conventional estoppel, no inducement is required but both parties must have acted on the basis of the assumption and known or intended that the other would as well."
I am not satisfied that 1VD has established the basis for a promissory or other estoppel here, given Mr Ngo's 14 August 2019 email. On balance, I am not persuaded that 1VD (through Mr Coulston) assumed, from the point at which it advised AEN (through Mr Ngo) of the inclusion of studio apartments, that AEN did not object to that course or that AEN, by its silence after Mr Ngo's email, induced 1VD to adopt any such assumption. I also cannot find that AEN acted on reliance on such an assumption, to establish a promissory estoppel, although I recognise that it incurred significant further costs to progress the development application in a form that included studio apartments. This is also not, it seems to me, a case of conventional estoppel, because AEN may well have been keeping its options open, being content to leave 1VD to incur the costs of completing the development approval while leaving open whether it would or would not seek to avoid paying the Final Instalment of the Nomination Fee or reimbursing those costs. On that basis, I would not find that AEN was estopped from relying on the inclusion of studio apartments in the development in order to deny 1VD's entitlement to the Final Instalment of the Nomination Fee or the reimbursement of expenses subject to the cap in the Nomination Deed, had I reached the view that it was contractually entitled to do so.