Supreme Court of WA|2008-03-14|Before: Martin CJ

The application does not comply with the Shire of Exmouth Local Planning Scheme No 3. The proposed use of the subdivision is residential, however the site is zoned 'Tourist' in the Scheme and a dwelling is not a permitted use.
The proposal does not comply with WAPC Planning Bulletin No 83 Planning for Tourism by reason that neither a construction and staging program nor a management statement for the strata scheme had been provided as required by Recommendation 12 of the Taskforce Report.
Approval to the subdivision would set an undesirable precedent for the further subdivision of surrounding lots.

100 The letter also advised that an aggrieved applicant could either apply for a reconsideration of the application by the WAPC, or for a review of the WAPC's decision by the State Administrative Tribunal within 28 days of the date of the decision. The letter advised that if reconsideration was sought, one of the matters to which the WAPC would have regard is whether:

... there is compelling evidence by way of additional information or justification from the applicant/owner to warrant a reconsideration of the decision.

101 Ms Rooksby gave evidence to the effect that when she received the letter advising her of the refusal of the application, she was surprised that she had not previously been contacted by the officer within the department who was responsible for processing the application. In her experience, it was usual for such contact to be made in cases where professional town planning consultants had been engaged, prior to a decision refusing an application, in order that the consultant might be given the opportunity to address any concerns which might be held within the WAPC or the department in relation to the application.

102 Ms Rooksby's view, which she expressed to Mr Humfrey, was that the first reason given by the WAPC for refusal was erroneous, because the subdivision itself was not inconsistent with TPS No 3, as the lots could only be used for permanent occupation if the amendment to TPS No 3 occurred, and her letter had explicitly made that point. In relation to the second reason for refusal, the view formed by Ms Rooksby, and which she conveyed to Mr Humfrey, was that if this had been the only reason for refusal, it is unlikely that it would have resulted in a refusal, but rather would have resulted in the imposition of a condition on approval.

103 Ms Rooksby formed the view that although the third reason given for the refusal of the application was very generally and perhaps cryptically expressed, it was likely to encompass the general considerations that had been raised at the time of consideration of the policy relating to the subdivision of land associated with tourism resorts, and in particular, the risk of fragmented or stalled development. Ms Rooksby conveyed this view to Mr Humfrey.

104 Ms Rooksby attempted to telephone the responsible officer at the WAPC in order to discuss the decision on a number of occasions. She again left a number of telephone messages. Again her calls were not returned.

105 Ms Rooksby gave consideration to the possible courses of action open to P & B and advised Mr Humfrey in relation to them. One option was to request the WAPC to reconsider its decision. However, in her experience, requests for reconsideration were seldom successful unless new or additional information was provided. Ms Rooksby's experience is corroborated by the emphasis given to that subject in the letter of refusal from the WAPC dated 9 July 2007. Ms Rooksby advised Mr Humfrey that she could not readily identify any additional information or material which would satisfy this requirement, so as to give cause for optimism that the WAPC would reconsider its decision. The only additional material she could have provided would have been a construction and staging programme and management statement, but as she did not consider that the second reason given by the WAPC for refusing the application was, of itself, critical, it was her view that the provision of that material was unlikely to result in a favourable reconsideration by the WAPC.

106 The second alternative open to P & B was to seek review of the decision of the WAPC in the State Administrative Tribunal. She discussed that option with Mr Humfrey. She advised Mr Humfrey that because of the significant policy question relating to the splintering of ownership of a tourism site ahead of its development for tourism purposes, and the apparent resistance to such a course by Tourism WA, she was not optimistic that such a review would be successful. It was also her experience, which she communicated to Mr Humfrey, that review by the State Administrative Tribunal would take at least six months, by which time the date for satisfaction of the conditions relating to subdivision would, of course, have passed, and the contracts with the plaintiffs come to an end.

107 In addition to discussing these issues with Ms Rooksby, Mr Humfrey had discussions with Mr David Etherton, of Tourism WA, at about this time. He was advised by Mr Etherton that Tourism WA was concerned that any one of the various purchasers of the subdivided lots could develop something on those lots which was not in line with the rest of the resort development.

108 At around the same time, Mr Humfrey also had discussions with officers of the Shire of Exmouth. In the course of those discussions, he was advised that the Shire would support further attempts to obtain approval to the subdivision provided that design guidelines which incorporated actual house plans of the buildings to be constructed on the lot were prepared. Because of the time and cost involved in the preparation of those plans, and because of his doubts as to the acceptability of that course to the eleven purchasers of the lots, Mr Humfrey did not consider that course appropriate.

109 After taking full account of the advice he had been given by Ms Rooksby, and his discussions with representatives of Tourism WA and the Shire, Mr Humfrey decided not to take any further action in relation to the subdivision application, either by way of application for reconsideration by the WAPC, or by way of application for review by the State Administrative Tribunal. He advised Ms Rooksby of his decision.

110 However, before communicating that decision to the plaintiffs, Mr Humfrey decided to give the matter further consideration. He did so during the course of a business trip to Vietnam. Upon his return from Vietnam, some time between 22 and 24 July 2007, Mr Humfrey telephoned Mr Downes, of Ray White Exmouth, and instructed him to advise the purchasers that the subdivision application had been refused, and that it would be necessary to terminate the contracts. Mr Downes advised Mr Napier, who in turn contacted Mr Stevens and advised him of the position, on or about 30 July 2007. Mr Stevens then notified the other purchasers of the position.

111 On 10 August 2007, Mr Kitto wrote to Mr Napier, advising that the various purchasers did not necessarily accept that the purchase contracts were terminated. In this letter, Mr Kitto also requested information on the extent to which the vendor had exhausted all possible means of obtaining development [subdivisional] approval, including appeal. Mr Kitto also requested the provision of a full copy of the application for subdivisional approval and copies of all responses from the WAPC.

112 By facsimile sent on 13 August 2007, Mr Napier provided Mr Kitto with a copy of the advice of refusal of the subdivisional application which had been received from the WAPC. He did not respond to the request for a copy of the application, although he did not have then have a copy of the application.

113 By letter dated 15 August 2007 to Mr Napier, Mr Kitto repeated his request for a copy of the application for subdivision. In that letter, Mr Kitto also foreshadowed the commencement of legal proceedings.

114 By letter dated 21 August 2007, solicitors acting on behalf of P & B responded to Mr Kitto's letter of 15 August 2007. The letter enclosed a copy of the application for subdivision.

115 These proceedings were commenced in September 2007.

116 In early October, Mr Napier sent to each purchaser a cheque for the amount of their deposit and accumulated interest. Those cheques were returned under cover of a letter from Mr Kitto dated 15 October 2007.

117 The plaintiffs allege that, in breach of each of the contracts, P & B 'failed to use its best endeavours to obtain the approval of the WAPC to the subdivision, or alternatively failed to submit a competent application at all'. Seven particulars of breach are relied upon in the statement of claim:

The purported application ... [for subdivision was] 'for the creation of 12 single "residential" lots despite the Resort Site being zoned "Tourist", and despite the plaintiffs not requesting or acquiescing to any such zoning change as part of the subdivision'.
The purported application described the proposed use of each of the proposed subdivided lots in terms which were either inconsistent with the 'tourist' zoning of the Resort Site or alternatively were ambiguous as to the proposed use of each of the subdivided lots.
Following the submission of the purported application, the defendant failed to make any enquiry of the allocated officer of the Department for Planning and Infrastructure to determine whether there was any matter arising from it that was likely to lead to a recommendation to refuse approval of the application.
The defendant failed to make any enquiry of the plaintiffs ... to determine whether any of the plaintiffs objected to subdivision approval for a purpose based on the zoning of the land as 'tourist'.
The purported application failed to comply with WAPC planning bulletin number 83 in that neither a construction and staging program nor a management statement for the strata scheme were provided.
The defendant failed to communicate to the plaintiffs the decision of the WAPC to refuse approval for the subdivision and failed to consult with the plaintiffs about whether to:

(i) abandon the purported application and replace it with a more appropriately drafted one;

(ii) seek a reconsideration of the decision to refuse the purported application; or

(iii) appeal the decision to refuse the purported application.

The defendant failed to seek advice from a town planner other than Chappell Lambert Everett, or legal advice, about whether to:

(i) abandon the purported application and replace it with a more appropriately drafted one;

(ii) seek a reconsideration of the decision to refuse the purported application; or

(iii) appeal the decision to refuse the purported application.

118 The last two particulars of breach were added by an amendment to the statement of claim at the commencement of the trial.

119 In addition, by the amended reply, the plaintiffs assert that the failure of the defendant to seek either reconsideration or review of the WAPC's refusal of the application, or to abandon it and replace it with a more appropriately drafted application, was a breach of the obligation to use best endeavours to obtain subdivisional approval.

120 P & B denies that it breached its contracts with the plaintiffs in any of the respects alleged. It asserts that the plaintiffs were all aware, prior to entering into their contracts, that there was a proposal to rezone the land for residential use. P & B admit that it did not consult the plaintiffs in relation to the application for subdivision, nor did it seek independent town planning or legal advice with respect to the course to be followed following refusal of the subdivision application, but asserts that it was under no obligation to do so, and therefore was not in breach of its contractual obligations by failing to do so. P & B counterclaims for a declaration that the contracts with each of the plaintiffs are at an end by reason of the failure of the condition to which they were subject.

121 Each of the plaintiffs has also pleaded that they are ready, willing and able to perform their obligations under the contract. P & B has denied that allegation. No evidence was led on the topic.

122 Expert evidence was led from three town planners - Mr David Maiorana, Mr Peter Webb, and Ms Rooksby. All are experienced and qualified town planners. As no challenge was made to the expertise of any, it is unnecessary to set out their qualifications and experience. Their evidence took two forms - written statements and reports which were tendered in evidence, and their oral evidence. Their oral evidence was taken concurrently.

123 Mr Maiorana was engaged to provide expert evidence by Mr Kitto, at a time when Mr Kitto was acting as solicitor for the plaintiffs. Mr Kitto briefed Mr Maiorana orally as to what was required. This was unwise. Mr Kitto was a prospective witness in the case. His wife and sister-in-law are plaintiffs. While impartiality is not a condition of the admissibility of expert evidence (yet), the weight to be attached to opinion evidence will of course be affected by the impartiality and detachment with which it is given. An oral briefing session between a party, or, in this case, a person whose interests are closely allied to those of a party, and an expert witness necessarily affects adversely the court's assessment of the independence and impartiality of the witness.

124 Mr Maiorana was asked to address the question of whether the application for subdivision constituted the use of best endeavours. In his written report, he took as his starting point the reasons for refusal of the application given by the WAPC. Using those reasons, he made assumptions, and drew inferences with respect to the reasoning process within the WAPC that led to refusal of the application. He then related those assumptions and inferences to the terms of the subdivision application.

125 In my opinion this process of reasoning is fundamentally flawed. The question of whether or not the subdivision application constituted the use of best endeavours is to be assessed by reference to the circumstances which existed at the time the application was made, at least up until the time it was determined. The actual decision on the application, and the reasoning process employed by the WAPC cannot inform the question of whether best endeavours were used prior to the decision being made. In the absence of evidence that the reasons for refusal were foreseeable, the reasons given go only to the question of whether there is a causal link between any established failure to use best endeavours at the time the application was submitted and the refusal of the application. The question of whether there has been a failure to use best endeavours must be assessed objectively, and in respect of the terms of the application, must be assessed by reference to the circumstances which existed prior to the decision on the application. Of course different considerations apply to the allegations of failure to use best endeavours following receipt of the decision on the application.

126 In his written report Mr Maiorana initially restricts his consideration to the terms of the printed application form itself. On that basis, he expresses the view that the application relied on an amendment to TPS No 3 which was far in the future and was itself contingent on other processes. However, the printed form should not be read in isolation. When the form is read with the letter and other documents which were submitted with the application, it is clear that the application was not dependent upon an amendment to TPS No 3. Any person reading the application with any experience in planning would have known that unless TPS No 3 was amended, the land proposed for subdivision could not be lawfully used for permanent residential use. The subdivision application was advanced on the alternative basis of use of the lots for tourism purposes only, for that reason.

127 In a subsequent portion of his written report, Mr Maiorana expands his considerations to embrace the letter of 10 April 2007 which accompanied the printed application. In that context he states that:

The fact that the defendant's stated proposed use was for residential dwellings as opposed to tourist accommodation could be expected to result in refusal of subdivision approval.

I do not consider that any reasonable person reading the letter of 10 April 2007 could conclude that the use proposed for the subdivided lots was 'for residential dwellings as opposed to tourist accommodation'. The letter made it abundantly clear that it was contemplated that the subdivided lots might be used for mixed purposes for time to time, if, and only if, TPS No 3 was amended to permit permanent residential use. The letter made it abundantly clear that tourist accommodation was one of the mixed uses, and would be the only use, if TPS No 3 was not amended.

128 In the portion of his first written report dealing with the second reason for refusal - that is, non-compliance with Planning Bulletin 83, Mr Maiorana fails to acknowledge that the planning bulletin had not been issued at the time the subdivision application was submitted.

129 Mr Maiorana does however express the view that the provision of a construction and staging program and a management statement would not be onerous conditions to address. In that respect his view corresponds with that of Ms Rooksby.

130 In relation to the third reason for refusal, Mr Maiorana expresses the view in his report that it:

Could in no way be substantiated as a 'stand alone' reason for refusal, in the event reasons 1 and 2 were addressed.

That conclusion can only be based upon assumptions and inferences as to the processes of reasoning which lay behind the enunciation of the third reason. Because of those assumptions and inferences, Mr Maiorana does not address, in his written report, Ms Rooksby's primary concern, which was the policy of Tourism WA in relation to the fragmentation of ownership of land proposed for tourist development.

131 Mr Maiorana was also asked to advise as to the options available to P & B following refusal of the subdivision application. He identified three options.

132 The first was to apply for reconsideration on the basis that the 'additional use' component be deleted, and the application proceed on the existing tourist zoning only. This view obviously proceeds upon an assumption that the initial application was not advanced on an alternative basis - that is, on the basis of possible mixed use in the event of the amendment of TPS No 3, or, in the alternative, solely on the basis of use for holiday accommodation. In my view the letter of 10 April 2007 made it clear that the application was being advanced on the alternative basis. That view substantially undermines the assumption upon which Mr Maiorana's opinion is expressed.

133 The second option identified by Mr Maiorana was the lodgement of a new application 'correcting the same defects as the reconsideration'. This view proceeds upon the same mistaken assumption as the view expressed in relation to reconsideration.

134 The third option identified by Mr Maiorana was to lodge an application with the State Administrative Tribunal for review. In his opinion, 'this option would only be taken if either option 1 or option 2 had been pursued and had not resulted in the application being approved'. In Mr Maiorana's opinion, such an application would most likely result in a mediation within about four months of the State Administrative Tribunal proceedings commencing. Mr Maiorana expressed the view that in his experience, timeframes from lodgement of an application for a review with the State Administrative Tribunal to a determination range between six and 12 months. On this basis, both any mediation and a final determination by the State Administrative Tribunal would have occurred long after the time for fulfilment of the subdivision condition had expired, and the contracts lapsed.

135 In his report Mr Maiorana express the view that it is common practice for town planning consultants to communicate with the allocated officer of the Department for Planning and Infrastructure during the course of that Department's consideration of a subdivision application. It seems clear that, at the time his report was written, he was not aware that the website of the Department did not identify any allocated officer, or that Ms Rooksby had made a number of unsuccessful attempts to communicate with whichever officer was in fact responsible for the consideration of the subdivision application.

136 The opinion evidence of Ms Rooksby could not be said to be impartial. She would no doubt have appreciated that a significant focus of the case was upon whether her conduct constituted the use of best endeavours to obtain subdivisional approval. I approach her opinion evidence with that consideration firmly in mind.

137 Ms Rooksby's written evidence is responsive to the evidence of Mr Maiorana. In that context, she states that she believed, at the time she lodged the subdivision application, that the amendment to TPS No 3 was likely to be resolved within nine to 12 months from its initiation (which was in November 2006). She was not aware of any suggestion that the resolution of the amendment would be a further 14 to 16 months away (which was apparently a view expressed to the WAPC by an officer of the Shire of Exmouth). In any event, she points to the terms of her letter of 10 April 2007, which make it clear that the application was not submitted on the basis that it was conditional upon the amendment to TPS No 3. I agree with her view of the effect of her letter. In this context she reiterates the point made in her earlier evidence to the effect that in the approval of a subdivision application, the WAPC is not approving land use, which is governed by the terms of the relevant local town planning scheme.

138 In his written report, Mr Webb sets out the facts which he had assumed for the purposes of expressing his opinion. Those facts correspond generally with the facts I have found. For reasons which he enunciates, he expresses the opinion that the subdivision application, and its terms, were appropriate in the circumstances, and that the application had a reasonable prospect of being approved. In his opinion, the actions of P & B were consistent with orderly and proper planning, and the actions of CLE were appropriate and should reasonably have resulted in the grant of approval. In his opinion, the reasons given by the commission for refusing approval were erroneous.

139 In the course of the concurrent oral evidence given by the experts, Mr Maiorana accepted that it would have been open to the WAPC to approve the subdivision application, and that the letter of 10 April 2007 should be regarded as part of the application.

140 In the course of his oral testimony, Mr Maiorana emphasised that in his view the major deficiency in the subdivision application was its reference to the possibility of the use of the lots for permanent residential purposes. In his view, any such reference should have been omitted. However, he acknowledged that the Department for Planning and Infrastructure would have information relating to the proposed amendment to TPS No 3 to add an additional approved use, to permit use of the land proposed for subdivision for permanent residence. In light of the latter fact, Mr Maiorana proffered the suggestion that the application could have been submitted under cover of a letter pointing to the fact that the scheme amendment had been initiated but emphasising that the application did not rely upon the amendment, and that the proposed use of the lots until such time as the amendment was finalised was for tourist uses only. He denied that the letter of 10 April 2007 could be characterised in that way. I disagree. As I have pointed out, the letter explicitly states that the subdivision is not dependent on the amendment and should be considered independently of it. Further, it must be remembered that any planner would be aware that unless and until the amendment to the local scheme was finalised, use of the land for permanent residential purposes would be prohibited.

141 In response to these assertions, Ms Rooksby made the point that even if the application had been based entirely upon use of the lots for holiday accommodation, and had made no reference to use of the lots for permanent residential purposes, the policy issue relating to the fragmentation of ownership, and its possible adverse effects upon the development of a tourism resort, would still need to be addressed. In my view, that is a valid observation.

142 In relation to the provision of a staging program and management plan, as required by Planning Bulletin 83, Mr Maiorana agreed that it would be reasonable to expect that if that was the only basis upon which the WAPC was proposing to refuse the application, they would contact the applicant and request provision of those materials before refusing the application on that ground. Mr Webb made the point that another way in which the issue might reasonably have been addressed by the WAPC, would have been by the imposition of a condition with respect to the provision of those documents.

143 Mr Maiorana accepted that his view to the effect that the third reason for refusal given by the WAPC could not have stood alone if the first two reasons had been addressed, was based upon his assumption as to what lay behind that reason. When Ms Rooksby's view that the third reason might comprehend the policy of Tourism WA with respect to the fragmentation of ownership of tourist developments was put to him, he said that he would not disagree.

144 The central issue in this case is whether P & B breached the express obligation imposed by each of the contracts with the plaintiffs to use best endeavours to obtain the approval of the WAPC to the subdivision of the land the subject of the contracts.

145 The content of a contractual obligation to use best endeavours to achieve a particular result has been the subject of consideration in many cases. In Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, a contract between a manufacturer and distributor for the distribution and sale of the manufacturer's goods was held to impose an implied obligation upon the distributor to use best efforts to promote the sale of the goods. Care should be taken before applying observations made in that commercial context to a quite different context, such as the present circumstance of a contract for the sale of land.

146 In the context of the distributorship agreement, Dawson J observed at 143 - 144:

Nor does the existence of a best efforts or best endeavours clause, such as was found to be a term of the contract ... impose a duty upon the distributor to disregard his own interests. In speaking of a 'best endeavours' clause in a licence agreement, in Transfield Pty Ltd v Arlo International Ltd, (Mason J said that it went no further than to prescribe 'a standard of endeavour which is measured by what is reasonable in the circumstances, having regard to the nature, capacity, qualifications and responsibilities of the licensee viewed in the light of the particular contract' ... . Clearly that leaves room for a balancing of interests and does not require the elimination of any conflict. (footnotes omitted)

147 Observations of that kind are apt to a continuing commercial relationship, such as that of manufacturer and distributor, or licensor and licensee, in which the interests of the parties may compete and even conflict from time to time. However, different considerations apply to a once-off contract such as a contract for the sale of land, in which both parties can be taken to have an interest in the contract being performed. Accordingly, I would not be inclined to accept the proposition that P & B could take account of its own interests in the discharge of its obligations under its contracts with the plaintiffs, although P & B's case does not depend upon that proposition.

148 On the other hand, a more general observation by Gibbs CJ in Hospital Products Ltd has been applied in a wider variety of contractual contexts, including the situation of vendor and purchaser. Gibbs CJ observed at 64:

[A]n obligation to use 'best endeavours' does not require the person who undertakes the obligation to go beyond the bounds of reason; he is required to do all he reasonably can in the circumstances to achieve the contractual object, but no more. (footnotes omitted)

149 In Paltara Pty Ltd v Dempster (1991) 6 WAR 85, 89 (per Malcolm CJ & Pidgeon J) that observation was applied to an express obligation to use best endeavours to obtain subdivisional approval in a contract for the sale of land. In the same case, reference is made to authorities (admittedly relating to an obligation to use best endeavours to promote the sales of a product) to the effect that the obligation was at 89 (per Malcolm CJ):

[T]o do what reasonably could be done in the circumstances and that the standard of reasonableness is that of a reasonable and prudent board of directors acting properly in the interests of their company.

150 In Paltara Kennedy J cited with approval a passage from Sheffield District Railway Company v Great Central Railway Company (1911) 27 TLR 451, in which Lawrence J, delivering the judgment of the Railway and Canal Commission observed at 452:

We think 'best endeavours' means what the words say; they do not mean second-best endeavours. ... They do not mean that the limits of reason must be overstepped with regard to the cost of the service: but short of these qualifications the words mean that the Great Central Company must, broadly speaking, leave no stone unturned to develop traffic on the Sheffield District line.

151 The position adopted by Kennedy J in Paltara appears to me to be consistent with the position adopted by the English Court of Appeal in IBM United Kingdom Ltd v Rockware Glass Ltd (1980) FSR 335. That case concerned the question of whether an obligation to use best endeavours to obtain planning permission included an obligation to appeal from an initial refusal of permission. In that context, Buckley LJ observed, of the obligation to use best endeavours at 339 - 340:

I can feel no doubt that, in the absence of any context indicating the contrary, this should be understood to mean that the purchaser is to do all he reasonably can to ensure that the planning permission is granted. If it were refused by the Local Planning Authority, and if an appeal to the Secretary of State would have a reasonable chance of success, it could not, in my opinion, be said that he had 'used his best endeavours' ...

I find it difficult to see how it could be said that to fail to appeal, if the circumstances were such as to indicate that an appeal from a refusal of planning permission had a reasonable chance of success, could be said to be using 'best endeavours' to obtain the planning permission.

152 On the broader question of the content of the obligation imposed by a requirement to use best endeavours, Buckley LJ formulated the applicable test in the following terms at 343:

In my judgment the test must be: what would an owner of the property with which we are concerned in this case, who was anxious to obtain planning permission, do to achieve that end? The formula which has been suggested and which would commend itself to me is that the plaintiffs as covenantors are bound to take all those steps in their power which are capable of producing the desired results, namely, the obtaining of planning permission, being steps which a prudent, determined and reasonable owner, acting in his own interests and desiring to achieve that result, would take.

153 The other members of the court adopted the same formulation. Geoffrey Lane LJ expressly agreed with Buckley LJ that if an appeal against refusal had a reasonable prospect of success, the obligation to use best endeavours included an obligation to pursue an appeal (at 345).

154 In Hawkins v Pender Bros Pty Ltd [1990] 1 Qd R 135, a contract for the provision of consulting services contained an express contractual obligation to use best endeavours to obtain building and town planning approvals. At trial, the obligation was construed as requiring at 150 - 151:

[T]hat the developer will apply itself conscientiously to the task of securing approval with the vigour which would be expected if it were prudently attempting to secure its own interests and that it will continue in this task until it should reasonably judge in the circumstances that further efforts would have such remote prospects of success that they are simply likely to be wasted. The circumstances which appear as the attempts proceed, from time to time, will be relevantly included for consideration. Such advice from independent sources should be sought as reasonably appears necessary.

155 The Full Court concluded that the trial judge had correctly construed the clause. In the course of his judgment Shepherdson J (with whom the other members of the court agreed) referred to the passages from the judgment of Buckley LJ in IBM United Kingdom Ltd and Gibb CJ in Hospital Products Ltd to which I have referred. He concluded that at 152 - 153:

[T]he test stated by Lord Justice Buckley is not essentially different from that stated in the High Court although as I have said the High Court was dealing with a distributorship agreement. The High Court recognises that the covenantor, while bound to the other contracting party, must not go beyond the bounds of reason in doing all he reasonably can in the circumstances to achieve the contractual object but no more than the contractual object. If Lord Justice Buckley's test is to be criticised it could perhaps be because it does not sufficiently emphasise the aspect of reasonableness.

What I think is clear is this - that in discharging its obligations the covenantor is not required to act in such a way that he faces ruin (Terrell v Mabie Todd and Co Ltd [1952] 2 TLR 574, 575). It is in this area that the combined aspects of prudence and reasonableness take effect.

156 Counsel for P & B placed significant reliance upon the decision of the Full Court of this court in Ross v Carvallio (Unreported, WASCA, Library No 970189A, 2 May 1997). In that case, Franklyn J, with whom Wallwork and Heenan JJ agreed, referred to the decision of the trial judge in the following terms:

[H]e concluded that a vendor in a case such as the present is obliged to do what is reasonably necessary for the purpose of obtaining approval to the subdivision and for that purpose to make and prosecute the necessary application and to do nothing to jeopardise it. In the event of the Council then refusing the application, his obligations are at an end unless something appears in the history of the matter or in the way in which the Council has dealt with the matter which makes it proper and reasonable for the vendor to take further action, such as an appeal or a request for reconsideration. That where a contract is merely conditional upon an approval being obtained the effect of the refusal of an application for approval must be assessed by reference to what the agreement provides as to the time for obtaining the approval. In the absence of a special stipulation, this will be the time for completion. In my opinion his Honour's conclusions as to the applicable law is correct.

With respect, portions of this passage are not easy to comprehend. There is nothing in the judgment which would suggest that the court was intending to depart from the earlier decision in Paltara, which is referred to in the judgment. Accordingly, construing the passage in that way, it seems to me that in respect of the possibility of appeal, the court should be taken to be expressing the view that if a prudent and reasonable person, acting in his or her own interests and determined to obtain approval, would have pursued an appeal, the obligation to use best endeavours would extend to an obligation to appeal. Construed in this way, there does not appear to me to be any tension between the decision in IBM United Kingdom Ltd, and the decisions in Paltara and Ross in this court.

157 There is a passage in the decision of Hope J in Laidlaw Pty Ltd v Cleverley (1972) 25 LGRA 196 which could be construed as being inconsistent with the authorities to which I have referred. In that case, Hope J observed at 205:

That the council's refusal was on a proper ground cannot be gainsaid, but the plaintiff claims that the defendant should have renewed the application or appealed when, after the refusal, it learned that the council was prepared to reconsider the matter along the lines suggested in the State Planning Authority's circular. I think there are two answers to this claim. In the first place, if the defendant had fulfilled his obligations in respect of the seeking of approval but nonetheless the council refused that approval, he was released from further obligations under the contract, and was not affected by the circumstance that he discovered that had the other party been more active in the matter, consent may have been obtained.

To the extent that this passage might be construed as connoting that once a refusal had been obtained, there was no obligation upon the applicant to consider and, if reasonable, pursue an appeal, it is inconsistent with the other authorities to which I have referred and should not, in my respectful opinion, be followed.

158 I will now assess the specific allegations of breach of contract made by the plaintiffs, and which I have set out above, in the light of my findings of fact and the principles of law which I have set out.

159 The first alleges breach by submitting a subdivision application for the creation of 12 single 'residential' lots, despite the site being zoned 'tourist' and despite the plaintiffs not requesting or acquiescing in any such zoning change. For reasons which I have set out above, the subdivision application did not request the creation of 'residential' lots. Rather, it requested the subdivision of land. The application was put on the basis of two alternatives as to land use. The first alternative was a possible mix of land uses, including both permanent residential and holiday accommodation, subject of course to the necessary amendment to TPS No 3. The second alternative was to seek the subdivision solely on the basis of the land being used for holiday accommodation. In the circumstances which prevailed at the time the application was lodged, that course was objectively reasonable and prudent. A failure to make any reference at all to the proposed amendment to TPS No 3 to permit the land to be used for permanent residential purposes would have been less than frank and would probably have come to the attention of the WAPC. I find that it is more likely than not that a failure to refer to the prospective use of the land for permanent residential purposes would have been prejudicial to the application's prospects of success. For the reasons I have already developed, the application that was submitted made it abundantly clear that the proposal for subdivision was not dependent upon the amendment of TPS No 3 in order to permit the land to be used for permanent residential use.

160 The alleged breach relies upon a lack of communication between P & B and the plaintiffs.

161 While I have found that the plaintiffs were not aware of a proposal to rezone the land, I have also found that each of them, either directly or through their representative, were advised that the land could be used for either permanent residential purposes or holiday accommodation. I do not consider that a prudent and reasonable person acting in his own interests was under any obligation to consult the plaintiffs with respect to the terms of the application for subdivision. Rather, the obligation of P & B was to take all the steps that a prudent and reasonable person, determined to achieve the success of the subdivision application, would take. The content of that obligation does not depend upon communications between P & B and the plaintiffs. That is another reason why, in my opinion, the pre-contractual negotiations between the parties are irrelevant.

162 The second allegation of breach alleges that the subdivision application described the proposed use of each of the lots in terms which were inconsistent with the 'tourist' zoning of the site or were ambiguous. However, the subdivision application, read as a whole, made it quite clear that under the then current terms of TPS No 3, the land could only be used for holiday accommodation, and argued for the approval of the subdivision on that basis alone. The application also quite properly referred to the proposal to amend TPS No 3 to permit an additional use. For the reasons I have given in my assessment of the evidence, there was no inconsistency between the application and the zoning, nor any ambiguity as to the proposed use of the lots.

163 The third breach alleged is an allegation of failure to make inquiry of the allocated officer of the Department for Planning and Infrastructure between lodgement of the subdivision application and its determination. However, there was no responsible officer allocated to the application on the website of the Department. Ms Rooksby made a number of attempts to contact the relevant officer without success. She expected that she would be contacted before any adverse decision was made. Mr Maiorana confirmed that her expectations in that regard were reasonable. Further, there was a very short period between the completion of the process of consultation with agencies, which was a prerequisite to a determination by the WAPC, and the making of the determination. The opportunities for meaningful communication were therefore extremely limited. In my opinion the steps taken by Ms Rooksby to communicate with officers of the Department were consistent with the steps that might reasonably be expected of a prudent and reasonable person acting in their own interests and determined to obtain the approval, and did not put P & B in breach of its contractual obligations.

164 The fourth alleged breach focuses upon the failure of P & B to consult the plaintiffs 'to determine whether any of the plaintiffs objected to subdivision approval for a purpose based on the zoning of the land as 'tourist''. As pleaded, the allegation is difficult to comprehend. The case seems to have proceeded on the basis that it is to be construed as an allegation of breach by reason of a failure to consult the plaintiffs with respect to the terms upon which the subdivision application was made, and in particular, the reference to the possible use of the land for permanent residential purposes. For the reasons I have given in relation to the first allegation of breach, I do not accept that there was any obligation on P & B to consult the plaintiffs with respect to the terms of the subdivision application.

165 The fifth allegation of breach concerns the failure to provide a construction and staging program and management statement, as required by WAPC Planning Bulletin 83. However, as I have found, that Bulletin was not published until some time after the subdivision application was lodged. Accordingly, counsel for the plaintiffs suggested that this allegation should be construed as a breach by failing to lodge the required documents after the Bulletin had been published.

166 The evidence of all of the experts, which I accept, was to the effect that if the failure to lodge these documents had been the only reason for refusal of the application for subdivision, it would be reasonable to expect that contact would have been made by the WAPC with the applicant through its consultant representative prior to refusal of the application, and the documents requested. Alternatively, the matter could have been dealt with by the imposition of a condition upon subdivision approval or by way of a request for reconsideration supported by the requisite documents. In those circumstances, in my opinion it would impose an unduly onerous obligation upon P & B to conclude that, in the relatively short period between the publication of Planning Bulletin 83, and the determination of its application, it was obliged to submit the documents required by that Bulletin. But in any event, the expert evidence satisfies me that any breach in this regard would not have been an operative cause of the failure to obtain approval to the subdivision, because, if it had been the only reason for refusal, it could have been, and would have been easily remedied. All the experts were of this view.

167 The next two allegations of breach concern events following the refusal of the application for subdivision by the WAPC. Included in the first such allegation, is the assertion that P & B failed to communicate to the plaintiffs the refusal decision. That allegation must fail. Although it took a little time for P & B to notify the plaintiffs of the refusal of the application for subdivision, the reasons for the course taken were, in my view, reasonable, and the delay in notification had no material impact whatever on the ultimate outcome.

168 The second aspect of the sixth allegation of breach alleges a failure to consult with the plaintiffs about the course to be taken. However, I fail to see how any consultation with the plaintiffs or any of them would or could have made any material difference to the course of events. None of the plaintiffs were expert town planners, nor were they informed as to the various issues which were likely to have been taken into account by the WAPC when considering the subdivision application. In those circumstances, I do not accept that the obligation to use best endeavours to obtain subdivisional approval included an obligation to consult with the plaintiffs in relation to the steps, if any, to be taken following the refusal of that application.

169 The seventh breach alleged relates to a failure to seek advice from a town planner other than CLE, or legal advice, with respect to the steps that might be taken following refusal of the subdivision application. However, this allegation appears to me to proceed upon the erroneous assumption that the subjective view of P & B is somehow relevant to the content of the obligation to use best endeavours. It seems to me that that is the only way in which the provision of advice to P & B by either town planners or lawyers could be relevant.

170 However, it is clear from the authorities to which I have referred that the content of the obligation to use best endeavours is to be determined objectively, albeit having regard to the circumstances at each relevant time. So, the question is not whether P & B should have taken advice with respect to the steps that might be taken following refusal but, rather, whether a reasonable, determined and prudent person, acting in his own interests, would have taken further steps to attempt to obtain subdivisional approval following the refusal of the subdivision application by the WAPC. Although such a person might well be assumed to have taken advice, that assumption is only one step along a path that would lead to a conclusion that such a person would have taken some further step to obtain subdivisional approval. In my opinion, the breach alleged is in itself immaterial.

171 However, if I am wrong in that view, and there is some basis upon which the question of whether or not P & B should have taken further advice is of itself relevant to the question of breach, in my opinion, in all the circumstances, there was no obligation on P & B to take that further advice. P & B had engaged reputable town planning advisors in whom confidence was properly and reasonably reposed. The advice given to Mr Humfrey by Ms Rooksby following the refusal of the subdivision application was reasonable and plausible. Mr Humfrey also received advice from other quarters, including Tourism WA and the Shire of Exmouth. On the evidence before me, and the findings I have made, there was no reasonable basis for him to conclude that he needed further advice to make an informed decision about the course to be followed. And as there was no evidence as to what legal advice might have been given had P & B sought such advice, that aspect of the plaintiffs' case must necessarily fail.

172 The eighth breach alleged (in the reply) is an assertion that P & B failed to use its best endeavours by either:

(a) lodging a further application for approval in different terms; or

(b) seeking reconsideration of the refusal by the WAPC; or

173 Dealing firstly with the allegation that P & B should have submitted a further application for subdivision approval, in different terms, that course could only be justified if there was some error or failing in the terms of the application which was lodged. For the reasons I have given, I have concluded that the application which was lodged was entirely appropriate, and in accordance with P & B's obligation to use its best endeavours to obtain subdivisional approval. There is therefore no basis upon which I could conclude that an application in different terms should have been lodged following the refusal.

174 Turning then to the prospect of an application for reconsideration by the WAPC, the evidence satisfies me that such an application would only have reasonable prospects of success if it were accompanied by fresh information or material omitted from the original application, and which was likely to persuade the WAPC to change its position. In my view there was no such material or information, and accordingly, no basis upon which any reasonable person could have concluded that an application for reconsideration by the WAPC would have had any reasonable prospect of success.

175 Turning lastly to the prospect of an application for review by the State Administrative Tribunal, it seems to me that the reasoning process applied by Ms Rooksby to that prospect was entirely consistent with that which would have been adopted by a prudent and reasonable person determined to obtain approval in the advancement of their own interests. Ms Rooksby reasoned, correctly, that the issue before the State Administrative Tribunal would not be whether there was an error on the part of the WAPC, but rather, whether, on all the evidence before the Tribunal, the 'correct and preferable decision' was that the subdivision application should be approved (State Administrative Tribunal Act 2004 (WA), s 27(2)). So, she correctly reasoned that the identification of error within the reasons given by the WAPC would not necessarily mean that the application to the Tribunal would be successful. She reasoned, as would any person under an obligation to use best endeavours, that although the first reason given by the WAPC was erroneous, and the second reason given could be overcome, that did not mean that an application for review would necessarily succeed. Ms Rooksby reasoned that the third reason given by the WAPC was likely to be an oblique reference to the policy issue which had been ventilated by Tourism WA with respect to the undesirability of fragmenting the ownership of land to be used for the development of tourism resorts. Mr Maiorana did not disagree with that process of reasoning. As it happens, in fact Tourism WA had opposed the grant of approval to the subdivision. Ms Rooksby was able to discover that fact very soon after the refusal of the application by obtaining a copy of the letter of 18 June 2007 from Tourism WA to the WAPC. It is reasonable to conclude that, in the discharge of an obligation to use best endeavours, any person contemplating an application for review to the State Administrative Tribunal would have taken the same step, and having obtained the letter, such a person would, in my view, have reasonably concluded that an appeal to the State Administrative Tribunal would not have enjoyed reasonable prospects of success in the face of opposition from both the WAPC and Tourism WA. Accordingly, I find that a reasonable and prudent person, determined to obtain subdivisional approval in his or her own interests, would have concluded that an appeal to the State Administrative Tribunal would not have enjoyed sufficient prospects of success to justify its commencement.

176 There is another reason why such a person would have arrived at that conclusion. That is because, on the evidence, resolution by mediation in the State Administrative Tribunal would have taken approximately four months, and resolution by determination of the Tribunal between six and 12 months. By that time, the time for fulfilment of the condition with respect to the approval of subdivision would have expired. Accordingly, by the time subdivisional approval had been obtained through this means, there would have been no contracts between the parties. It was faintly suggested in the course of Mr Maiorana's evidence that steps could have been taken to secure an expedited mediation. However, the evidence established that, before attending any such mediation, WAPC would have required the input of the various agencies which were consulted, including the Shire of Exmouth, and most particularly, Tourism WA. I think it more likely than not that the requirement for consultation with those agencies would have delayed the conduct of any mediation to a time beyond the time for fulfilment of the condition relating to subdivisional approval under the contracts between the parties. And, in any event, given that Tourism WA was opposed to the subdivision, there was no reasonable basis for concluding that the matter was likely to be resolved, and approval to the subdivision obtained, at a mediation.

177 In response to the issue concerning the time of a determination by the Tribunal, the plaintiffs refer to s 29(5) of the State Administrative Tribunal Act 2004. That section provides that a decision made by the Tribunal substitutes for that of the decision maker and, unless otherwise ordered or provided by the enabling Act, is to be regarded as having effect, or as having had effect, from the time when the decision reviewed would have had effect. However, the plaintiffs have cited no authority which supports the proposition, implicit in their argument, that a favourable decision by the Tribunal sometime after the contracts had come to an end by reason of the failure of the condition to which they were subject, would somehow retrospectively revive the contracts which would by then have terminated. The case of Butts v O'Dwyer [1952] HCA 74; (1952) 87 CLR 267, relied upon by the plaintiffs, is not in point because the relevant statutory provisions in that case did not require ministerial approval within a specified time, nor had the agreement between the parties lapsed by reason of a failure to obtain approval by a time specified in the agreement.

178 The plaintiffs' argument in this respect was raised in supplementary written submissions following the completion of oral argument, and was outside the scope of the topics upon which written submissions were invited. P & B have not responded substantively to the proposition, and the matter has not been argued before me at all. In those circumstances I am reluctant to rule definitively upon it, other than to observe that the proposition appears to me to be inherently dubious. It is a purely legal issue which could, if necessary, be ventilated and resolved on appeal notwithstanding my failure to rule upon it.

179 A similar observation applies to an issue that was raised belatedly in relation to the effect of s 140 of the Planning and Development Act 2005. Section 136 of that Act prohibits an agreement to sell land other than as a lot, subject to, amongst other things, s 140 of that Act. There is an initial question as to whether these contracts were for the sale of land other than as lots - as to which see Landall Construction & Development Co Pty Ltd v Bogaers (1980) WAR 33. If the contracts did fall within s 136 of the Act there would be a subsidiary question as to whether, if I had concluded that P & B was in breach of the obligation to use best endeavours to obtain subdivisional approval, specific performance could or should be ordered, given that approval was not in fact obtained within the period of six months referred to in s 140.

180 These legal issues were only barely debated. They only arise if, contrary to my conclusion, P & B is found to have been in breach of contract. If that point is reached, there is no reason why they could not be addressed and resolved by an appellate court. Accordingly, I do not propose to rule upon them at this point.

181 As I have observed, issue was joined on the pleadings as to whether the plaintiffs were ready, willing and able to complete their contracts. Proof of that capacity is, of course, a pre-requisite to the grant of specific performance. Notwithstanding the fact that representatives of all plaintiffs gave evidence, none of them gave any evidence on this subject. Given the pleaded issue, this is a remarkable omission.

182 The plaintiffs ask me to infer that they were ready, willing and able to perform from the mere fact of their pursuit of these proceedings. That submission takes the process of inference a long way beyond appropriate bounds.

183 However, although no submissions were made to this effect, it seems to me to be more likely than not that the failure to adduce evidence on this subject was due to oversight by the plaintiffs' legal advisors. Oversights of that kind should not be the source of injustice if they can be cured without injustice to other parties. If this omission had been the only impediment to the grant of specific performance, I would have invited the plaintiffs to apply to re-open their case to lead further evidence on that subject. However, as I have concluded that the plaintiffs' case must fail for other reasons, it is not appropriate to take that course.

184 For these reasons the plaintiffs have failed to establish that P & B breached the contracts between it and the plaintiffs. The plaintiffs' claims should be dismissed. P & B has succeeded in establishing that the contracts came to an end by reason of the failure of the condition to obtain subdivisional approval, and a declaration to that effect should be granted.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : O'ROURKE -v- P & B CORPORATION PTY LTD [2008] WASC 36 (S)

Practice and procedure - Costs of trial - Indemnity costs

Legal Practitioners (Supreme Court) (Contentious Business) Determination 2006 (WA)

Plaintiffs to pay the defendant's costs of the action

1 (This judgment was delivered extemporaneously on 15 April 2008 and has been edited from the transcript.)

2 These proceedings were determined by a judgment delivered by me on 14 March 2008 in which I dismissed the plaintiffs' claims against the defendant. Following publication of the reasons for my judgment, each of the parties has made elaborate and detailed submissions with respect to the costs orders that should follow that event. In the case of the defendants, who were successful at trial, they seek a number of orders, some of which are contentious. I will refer in these reasons only to those orders that are contentious.

3 The first contentious order sought was an order that the plaintiffs pay the defendants' costs of the action on an indemnity basis. In the alternative, specific costs orders are sought, including costs orders lifting the limits on items 16 and 19 of the scale of costs annexed to the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2006 (WA) (the Scale) (relating to getting up for trial and trial), and lifting the hourly rate applicable to the work of the legal practitioners involved in the case, including the work of counsel.

4 On the plaintiffs' part, they resist an order that the entire costs of the proceedings should follow the event but propose that the plaintiffs should only receive 60% of their costs because of what the plaintiffs assert is their success on some of the issues that were ventilated at trial and ultimately determined by me.

5 Disputes of this kind relating to costs of the parties to a trial are sometimes described in other jurisdictions as 'satellite litigation'. I must confess to a preference for the rather more pejorative description of disputes of this kind as 'parasitic litigation'. I use that term because litigation of this kind in relation to costs has the distinct tendency to sap the energy of the parties and their legal advisers and the court, and to distract legal advisers and the court from getting on with the other more important issues including the resolution of substantive disputes.

6 I think it is important that a robust approach be taken to the resolution of costs issues of this kind and that the practice of making elaborate and detailed submissions with respect to costs, supported by elaborate and detailed evidence and oral argument, should be actively discouraged by the court. With that in mind, the reasons that I will give in relation to these applications will be brief.

7 I will deal, firstly, with the application for indemnity costs. The principles relating to the grant of indemnity costs are fairly well established and were not challenged by either party to these proceedings. It is clear that indemnity costs are only awarded in exceptional circumstances (Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95), generally being circumstances in which the conduct of the party against whom the order is sought is of a kind that calls for a form of admonition. In Lo Presti v Ford Motor Company of Australia Ltd [No 2] [2008] WASC 12 (S) at [11], Beech J noted that:

[T]he rejection by a defendant of an offer of compromise which subsequently proves to be more favourable to the defendant than the result of the trial does not necessarily or presumptively lead to an award of indemnity costs for the plaintiff.

8 In this case, the defendant moves for an order for indemnity costs based on a combination of matters, rather than any single matter. Those matters are said to be:

(a) the pre-proceedings correspondence between the parties in which it is said that the defendant pointed out to the plaintiffs the futility of their cause;

(b) a number of deficiencies that are said to have attended the briefing of Mr Maiorana, the plaintiffs' expert witness;

(c) the plaintiffs' rejection of the defendant's offers of compromise; the first in October 2007, the second in December 2007, well before the parties began their preparations for trial; and the third in late January 2008; and

(d) a miscellaneous catalogue of conduct on the part of the plaintiffs that is said to have magnified the costs of conducting the litigation.

9 That catalogue of conduct referred to in (d) above includes the lodging of caveats; an application for an injunction; the ventilation of an issue relating to the payment of stamp duty on the contracts that were the subject of the proceedings; an issue relating to the evidence to be led from a freedom of information officer employed by the Western Australian Planning Commission; the fact that less than comprehensive witness statements were prepared by a solicitor who was also a party interested in the proceedings; an issue concerning the admissibility of the evidence of the precontractual negotiations, and then the subsequent pressing of that evidence; a foreshadowed issue that was not ultimately ventilated at trial about the admissibility of expert evidence; a foreshadowed issue about the defendant's pleading that was not ultimately ventilated; and the fact that the plaintiffs filed supplementary written submissions that went well beyond the topics that had been identified in oral argument as being the appropriate subject of such written submissions.

10 Without going into detail in respect of each of the matters relied upon, it seems to me that they are all matters of a kind that are within the ordinary pull and push, thrust and parry of litigation of this kind. These events and the various events that have been identified are, in my experience, not out of the ordinary in proceedings of this kind, and I do not detect in any of the matters identified any conduct on the part of the plaintiffs or their legal advisers that is so far out of the ordinary as to warrant an admonition in the form of the award of indemnity costs. So for those short reasons I am not persuaded that this is an appropriate case in which to order indemnity costs.

11 Before dealing with the specific costs orders sought by the defendants, I will also deal with the plaintiffs' contention that there should be an apportionment of the defendant's costs of the trial because of the issues upon which the plaintiffs were successful at trial.

12 Again, for the general policy reasons that I have developed, it is my view that a court should be cautious before apportioning costs on the basis of allegations of success in relation to particular issues. The general rule enunciated in O 66 r 1 of the Rules of the Supreme Court 1971 (WA) is that a successful party is to be compensated for the costs of their success.

13 While there will be cases in which it is appropriate to depart from that principle by reference to identifiable and discrete issues upon which the successful party has failed, that course is, in my view, one that should not be followed unless it is clear that those issues were significantly discrete, raised costs that can be separately and specifically determined, and were issues upon which the unsuccessful party has demonstrably failed.

14 The issues that the plaintiffs rely upon in this case are issues essentially relating to the leading of the oral evidence with respect to the precontractual negotiations. In the way in which the question of the admissibility of that evidence emerged at trial, it is my view that both parties in the end were responsible for that evidence being led.

15 Despite the disavowal of the relevance of that evidence by counsel for the plaintiffs, the view which I formed and enunciated during the course of argument on the subject was that, by reason of certain paragraphs of the plaintiffs' pleading, the evidence was plainly relevant to the case which the plaintiffs wished to advance. The defendant also contended that the evidence was relevant and admissible and, as a result, the evidence was led and ruled upon by me. So it seems to me that that evidence on that issue was clearly within the scope of the matters which both parties sought to ventilate at trial.

16 In relation to the determinations of what actually took place at the meeting on 28 February 2007 at the Royal Perth Yacht Club, I do not think it can be said that one party was substantially successful and another substantially unsuccessful in relation to those issues. I think each party had a measure of success in relation to the findings which I made. In any event, that evidence was part and parcel of the general evidence introduced at trial and did not pertain to a sufficiently discrete issue to warrant apportionment pursuant to the principles I have identified.

17 I return then to the application for specific costs orders made by the defendant. Dealing only with the contentious orders, the first is an application for an order that there be a reasonable allowance, not limited by the limit imposed by item 23(b) of the Scale for an informal conference that took place two working days before the commencement of the trial, and which counsel and solicitors for the parties attended, and which occupied several hours.

18 It is my view that conferences of the kind, which I understand took place before the trial commenced, are advantageous, both to the parties, and to the Court, in order to encourage the smooth running of the trial. I understand from the evidence before me that amongst the issues that were discussed at such a conference were issues relating to the admissibility of evidence. The discussion of those issues between counsel and responsible solicitors is something that I have encouraged both in this case and generally. I think it would be consistent with the approach that underpins the encouragement of conferences of that kind to make the orders sought and to indicate to the taxing officer that the amount to be allowed should include attendance by both counsel and solicitor, because the range of matters discussed involved a role for both practitioners. So orders will be made in the terms sought in relation to this item.

19 The next specific order sought is an order that the limits imposed by items 16 and 19 of the Scale, being the items relating to getting up for trial and the trial itself, be removed. Section 215 of the Legal Practice Act 2003 (WA) provides that:

[i]f a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a legal costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer ...

may do a number of things, including the removal of limits on costs fixed in the determination.

20 I made observations on the proper interpretation of this section in Heartlink Ltd v Jones [2007] WASC 254 (S). Included in those observations at [25] - [26] is the conclusion that the question of inadequacy is not to be determined definitively by the court from which an order is sought under s 215(2), in the sense of conducting a provisional taxation of costs and then ascertaining whether, on the basis of that provisional taxation, the amount allowed in the Scale is inadequate. That, I think, would result in the court significantly usurping the role of the taxing officer and would also result in the undesirable practice of double-handling of the assessment of costs.

21 Rather, it seems to me that all that is required of a court to which an application is made under s 215(2) is that it form a view on the question of whether there is an arguable case to be put before a taxing officer to the effect that the limit imposed by the Scale would be inadequate because of the 'unusual difficulty, complexity or importance of the matter'.

22 The next question that arises for assessment under s 215 is the question of what the word 'unusual' means in that context. In my view, that word is to be construed by reference to the practice, presumably known to the legislature at the time that it enacted the section, of fixing a scale of costs which applies to all civil proceedings of whatever kind or nature.

23 So in that context it seems to me that the word 'unusual' means unusual having regard to what one might describe as the usual run of civil cases. The question is not, for example, in this case, whether this was an unusually difficult, complex or important case for specific performance of a contract for the sale of land which at the time the contract was entered into was not subdivided. Rather, the question is whether this was an unusually difficult, complex or important case, having regard to the usual run of civil cases determined in the Supreme Court and generally in the District Court, because, of course, the Scale is generally applicable to proceedings in both courts.

24 It also seems to me that the assessment of the question of whether or not there is 'unusual difficulty, complexity or importance' is essentially a value judgment to be made by the court, and which the court is particularly well qualified to make, having regard to the fact that the court has heard and determined the trial and can take into account the court's experience of the usual run of civil cases in the superior courts of the State.

25 It is therefore not a question that I think is usually assisted by elaborate or detailed argument but, rather, involves the making of a value judgment by the court, having regard to the court's experience of the particular case and compared to the usual run of cases.

26 Applying that approach to the section, it seems to me that this case was more than usually difficult, more than usually complex and, at least from the perspective of the parties, more than usually important, particularly from the defendant's perspective having regard to the scale of the tourism project upon which it was engaged.

27 I have come to that view because there were not only a raft of issues relating to factual evidence but also some quite complex issues relating to the practices and procedures relating to the subdivision of land and quite complex issues of expert evidence that in my view went beyond the usual run of issues that one encounters in the usual run of civil cases in this court or in the District Court. For those reasons, I conclude that this is a case in which there was 'unusual difficulty, complexity and importance' and that therefore the criterion that must be satisfied before I could exercise the discretion conferred by s 215 is satisfied.

28 The next question is whether I should exercise that discretion. It seems to me from the materials that I have seen relating to the work actually done that there is an arguable case to be put to a taxing officer, to the effect that the limits imposed by those items of the Scale are inadequate. For that reason, I propose to make the order sought, although of course I emphasise that it will be a question for the taxing officer to determine whether in fact the limits imposed by those items are inadequate. The taxing officer will do so after hearing full argument in relation to the work done and making an assessment of whether the work done was appropriately done.

29 The next specific order claimed is for an order that the defendant be entitled to claim for work reasonably done under item 32 of the Scale in respect of a number of items identified in the draft bill of costs that has been provided to the Court and which are summarised in the written submissions provided. The items include work done in relation to an unregistered caveat; in relation to the stamping of the sale contracts the subject of the proceedings; work done in relation to advice to the client about the impact of proceedings on financing arrangements; work done in relation to a further caveat lodged by the fifth plaintiff; work done in relation to media reports; work done in relation to without prejudice offers; work done in relation to the objection which the defendant anticipated to the expertise of Ms Rooksby, an expert witness called on behalf of the defendant; and work done in relation to the submissions which the plaintiff foreshadowed relating to the use of expert evidence.

30 It seems to me that at least some of these items, particularly the items relating to the stamping of the sale contracts, the objection to the expertise of the prospective expert witness and the foreshadowed objection relating to the use to which the expert evidence could be put, could well come within item 16 of the Scale in relation to getting up for trial, and it is arguable perhaps that some of the others might also come within that item.

31 Where those particular items are properly within item 16 of the Scale, they will be compensable by the taxing officer if he or she adjudicates that they fall within that item and, because of the order that I propose to make lifting the limit in respect of that item, there will be no impediment to recovery of those items, to the extent that they were properly done in preparing for trial.

32 However, if the work done is not determined by the taxing officer to have been work properly done in preparing for trial, then, in my view, there is no basis upon which I should order that it be recoverable as if it were, in effect, part of the costs incurred in preparing for trial or part of the work done in relation to litigation. All litigation will undoubtedly give rise to a need for the parties to that litigation to receive a range of advice on matters which are related to that litigation but which do not bear directly upon the preparation of the case for trial. Neither the terms of the Scale, or the general practice of the court, encourage the recovery of costs incurred in relation to ancillary matters. Rather, the Scale suggests, consistently with established practice, that recoverable costs be limited to work properly done preparing for, and conducting, the trial. For these reasons, I do not propose to make an order in the terms sought.

33 The final contentious matter concerns the question of the rates to be applied to the work done by, in one case Mr Lemonis and in the other case, counsel. The order sought is that the costs be taxed at the maximum senior practitioner rate of $385 per hour and for counsel also at $385 per hour.

34 In the course of argument, it has been pointed out that under cl 8 of the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2006 (WA) the hourly rate to be applied in the assessment of particular items in the Scale is, in the case of a senior practitioner, who is a practitioner admitted for more than five years, $363 and, in the case of junior counsel, an amount of $286.

35 This is a case which came on at relatively short notice because of the nature of the relief sought and because of the impact which uncertainty with respect to the various contracts was having upon the defendant's proposal to develop a significant tourist resort. In those circumstances, there was understandably an apportionment of work between counsel and instructing solicitors. That apportionment was perhaps slightly different to the apportionment of work that might ordinarily be performed in that more work was done by counsel than would ordinarily be the case. In those circumstances, it would seem to me to be unfair to the defendant to require the taxing officer to apply a lower rate to the work done by counsel merely because that work was done by counsel and not done by the instructing solicitor, for whom a higher rate would have been applicable - especially given that, in this case, counsel was an experienced practitioner.

36 Having already determined that the case is one of unusual difficulty, complexity or importance, it seems to me that I have the discretion to alter the rate applicable, and I propose to exercise that discretion. However, it seems to me that increasing the rate to $385 is not appropriate and that, rather, what I should do is provide that it will be up to the taxing officer to allow, in respect of work done by counsel which is to be assessed at an hourly rate, a rate of up to $363 per hour if the taxing officer forms the view that that allowance is appropriate.

37 I do not propose to make any order in relation to the rate to be allowed in respect of work done by the solicitor, as I can see no reason why the specified maximum of $363 per hour should not apply, but I do propose to order that a limit of $286 per hour in respect of work done by counsel be raised to a limit of $363 per hour but that it, of course, be within the discretion of the taxing officer as to what rate should be allowed in respect of particular items of work.

The plaintiffs pay the defendant's costs of the action, including the costs of the plaintiffs' application for interlocutory injunction dated 30 November 2007 to be taxed.
That the taxation be performed on the basis that:

(a) allowance be made for counsel and a solicitor attending at the experts' conference claimed at item 9 of the draft bill of costs in accordance with item 23(a) of the Scale;

(b) allowance be made for counsel and a solicitor attending the mediation, with reasonable allowance made for counsel and solicitor preparing for the mediation under item 23(a) of the Scale;

(c) the conference between counsel and solicitors for the parties claimed in item 10(a) of the bill of costs was an informal conference which was reasonably held and a reasonable amount should be allowed under item 23(b) of the Scale and the limit of item 23(b) of the Scale be removed to allow for attendance by counsel and solicitor;

(d) the limit on items 16 and 19 of the Scale be removed;

(e) a direction be made that an appropriate amount be allowed as a disbursement for Mr Peter Webb's fees and Ms Phillida Rooksby's fees;

(f) that the limit upon the rate to be allowed for work done by counsel assessed by reference to an hourly rate be raised to $363, it being stipulated that it is within the discretion of the taxing officer as to which rate shall be allowed and applied to any particular work done by counsel; and

(g) that the defendant have a certificate for the transcript.

The plaintiff pay the costs of this application to be taxed as part of the overall bill.
The obligation to pay costs imposed upon the plaintiffs by these orders be borne jointly and severally by the plaintiffs.

Development Act 2005

Administrative Tribunal Act 2004

O'ROURKE -v- P & B CORPORATION PTY LTD [2008] WASC 36 (14 March 2008)

98 In these circumstances, it seems to me that the report has very little, if any, evidentiary value. It does not appear to me to provide any guidance as to the content of P & B's obligation to use best endeavours to obtain subdivisional approval, unless there was some evidence that the position actually adopted by the WAPC could or should have been foreseen by the applicant for subdivision approval (see Parland Pty Ltd v Mariposa Pty Ltd [1995] TASSC 91; (1995) 5 Tas R 121, 134). There was no evidence to this effect. In the absence of such evidence, at its highest, the report could only shed some limited light on the question of whether, if there was a failure to use best endeavours, that failure was the cause of the refusal of the application for subdivision. And because no evidence was led as to the identity of the person or persons who made the decision to refuse the application, and given that neither party chose to pursue that topic in evidence, the document alone is an unreliable source of any conclusions on the limited issues to which it might be relevant.

O'ROURKE -v- P & B CORPORATION PTY LTD [2008] WASC 36 (14 March 2008)

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O'ROURKE -v- P & B CORPORATION PTY LTD [2008] WASC 36 (14 March 2008)