(c) In relation to the building consent:
(i) would Ocean View have been able to obtain rectification of the agreement to remove that requirement from cl 5.4?
(ii) had Rebenta waived any breach prior to 22 April 1996?
Requirement for development consent: construction of cl 5.4
47 The terms of cl 5.4, set out at [23] above, required that Council grant development consent by 28 February, 1996. There would have been non-compliance if Council had either refused to grant the consent or had simply not granted it, because it had made no final decision. In its terms, taken alone, the clause was complied with because development consent was granted on 27 February 1996. Rebenta's argument in favour of non-compliance depended upon reading into the terms of cl 5.4 the definition of development consent in cl 1.1, namely "written consent from the Council to the Development Application …". Further, it was necessary to understand the preposition "from" as indicating movement, namely a written document emanating from the Council and passing (presumably) to the project manager, Ocean View (or the architect as its agent).
48 A natural reading of the definition is that the development application is the subject matter to which consent must be given (that being the relevant action) by the Council (being the consent authority). A further requirement is that the consent be reduced to writing. The element of notification is absent from this reading. It involves reading "from" as identifying the source of the consent, namely the Council, not as creating a further action, namely notification. Accordingly, the fact that Ocean View was sent no written notification of the outcome of the Council meeting until 11 March was irrelevant to compliance with cl 5.4.
49 That construction should be accepted. Once that construction is adopted, it was sufficient for the trial judge to find, on the basis of evidence of "usual procedure of the Council", that a handwritten minute of the resolution passed by the Council would have been made at the time, which would then have been transformed into a typewritten minute on the following day: at [132]. However, his Honour concluded at [133]:
"The handwritten and typed minutes of the passing of the resolution granting Development Consent, which were prepared for the purposes of the Council's own records, would not, in my opinion, amount to written consent 'from' the Council to the development application."
50 By his notice of contention, the respondent challenged this conclusion. That contention should be upheld.
51 Apart from the fact that the definition of "Development Consent" does not readily bear the construction sought to be placed upon it, there are other aspects of the agreement which are consistent with the construction preferred above. For example, cl 5.2 obliged Ocean View, "forthwith upon receipt … of the Development Consent … from the Council" to submit a copy thereof to Rebenta. If cl 5.4 had been intended to require receipt of a written document prior to 28 February, one might have expected it to adopt similar language to cl 5.2, whereas the language was markedly different.
52 Clause 5.4 envisaged the possibility that the Council had refused or not granted consent by the specified date. This language is consistent with the Council making a relevant determination, rather than providing written notification of its determination. The appellant's argument required that the clause would not be satisfied if the Council had in fact granted consent and prepared a written minute of its determination but had failed to send either a statutory notice or some other form of written notification to the applicant. That construction adds significantly to, and indeed contorts, the ordinary meaning of the clause, even taking account of the definition of development consent.
53 Without dwelling on the details of the provisions, each of cll 5.5 and 5.7 suggested that the parties were concerned with the substance of the Council's decision (granting or refusing approval for the application, and the conditions on which any grant might be made) rather than the content of the notification. These provisions may be thought neutral at best for the appellant.
54 The trial judge accepted a submission made by Rebenta that some support for its reading could be obtained from ss 92 and 93 of the Environmental Planning and Assessment Act 1979 (NSW), as then in force. Pursuant to s 92, the consent authority was required to give notice of the determination of a development application in a prescribed form and manner; the date of the determination and the date from which it operated were required to be endorsed on the notice: s 92(1) and (2). The consent was "effective" and would "operate from the date of consent that is endorsed upon the notice": s 93(1)(a). Except in the case of a consent given subject to fulfilment of a condition, those provisions appeared to require that the consent operate from the date of determination: s 92(2).
55 The fact that the consent authority was required to give notice of its determination and that such a notice served a clear statutory purpose are matters which do not obviously affect the construction of the agreement. There might have been some sense in requiring that notice be received from the Council by a certain date, but that was not the form of cl 5.4, nor the definition of "Development Consent". Indeed, reference to ss 92 and 93 suggests that the language of the agreement would have been quite different if the parties had intended that statutory notification was to be required by the prescribed date.
56 The appellant sought to obtain some further support for its submissions from evidence of a Council officer who accepted that the Council would have been willing to expedite provision of the statutory notice, had an applicant requested it in order to comply with a contractual deadline. That evidence may be accepted in its entirety: nevertheless, it has little or no bearing on the construction of the agreement. Accepting that the parties knew at the date of the agreement that the likely Council meeting to consider the development application was to be held in late February 1996, such evidence would remove any inference that a tight timetable was inconsistent with an intention to require notification, or at least might have been deployed for that purpose if it had also been shown that both parties were aware of it at the time they entered into the agreement. In any event, it provided no positive support for Rebenta's construction argument.
57 It follows that the notice of contention should be accepted and the construction requiring that written notice be provided to Ocean View (or its architect) by 28 February 1996 should be rejected. Accordingly, there was no failure to comply with any requirement of cl 5.4 with respect to the development consent.
Estoppel
58 On this basis, it is unnecessary to consider the correctness of his Honour's conclusion that failure to obtain notice of the development consent by 28 February 1996 did not confer on Rebenta a right to terminate the agreement because an estoppel ran against the company. However, it is convenient to deal with the appellant's challenge to his Honour's finding, which was related to the construction issue.
59 The relevant pleading raising an estoppel by convention was as follows (defence to fourth further amended statement of claim, par 27PP (a)):
"after entering into the agreements on 18 December 2005, the parties to the agreements conducted themselves on the basis of common understanding that there would be adequate compliance with the terms of the agreement if Council approval to the development application was obtained on or prior to 28 February 1996 so that, had the plaintiff attempted to terminate the agreement and the joint venture arrangements on the ground that no consent in writing to the Development Application had been obtained by 28 February 1996 in circumstances where Development Approval had been granted by the Council on 27 February 1996, the plaintiff would have been guilty of unconscionable and inequitable behaviour and would have been estopped from so contending …."
60 His Honour noted that the pleading was restricted to the consent to the development application and did not extend to the building consent: at [221].
61 His Honour accepted that an estoppel by convention might arise in the circumstances identified by the High Court in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Aust) Ltd [1986] HCA 14; 160 CLR 226 at 244, in the following terms:
"Estoppel by convention is a form of estoppel founded not on a representation of fact made by a representor and acted on by a representee to his detriment, but on the conduct of relations between the parties on the basis of an agreed or assumed state of facts, which both will be estopped from denying."
62 His Honour also referred to the statement of this Court in Ryledar Pty Ltd v Euphoric Pty Ltd [2007] NSWCA 65; 69 NSWLR 603, in which Tobias JA (with the agreement of Mason P and Campbell JA) held at [194], "estoppel by convention is a form of estoppel founded upon an assumed state of affairs by the parties whether as to a matter of fact or a matter of legal effect which both will be estopped from denying". Although the reference in support of that proposition was to Con-Stan Industries, there was support for the reference to an assumption as to legal effect in the statement of principles by Lord Steyn in The "Indian Grace" (No 2) [1998] AC 878 at 913 in a passage cited at [198] in Ryledar, to the following effect:
"… an estoppel by convention may arise where parties to a transaction act on an assumed state of facts or law, the assumption being either shared … or made by one and acquiesced in by the other. The effect of an estoppel by convention is to preclude a party from denying the assumed facts or law if it would be unjust to allow him to go back on the assumption."
63 After reviewing the evidence, his Honour concluded at [250]:
"I find, as alleged by the defendant, that after entering into the Project Management Agreement on 18 December 2005 the parties to the Agreement conducted themselves on the basis of a common assumption that there would be adequate compliance with the terms of the Agreement if Council approval to the development application was obtained by 28 February 1996, so that, had the plaintiff sought to contend that it had a right to terminate the Agreement on the ground that no consent in writing had been obtained by 28 February 1996, in circumstances where development approval had been granted by the Council on 27 February 1996, the plaintiff would have been estopped from so contending."
64 The challenge to his Honour's conclusion in this respect appeared to be twofold. The first element was that the allegation as pleaded was incoherent because cl 5.4 did not require the parties to take steps in order to comply with it. Rather, the term operated in the events which occurred, so as to confer an automatic right of termination on Rebenta. To avoid this result, the appellant argued that the respondent needed to establish a promissory estoppel precluding Rebenta from exercising its strict legal rights. This, it was submitted, required a representation by one party and reliance by the other.
65 The distinction between the two forms of estoppel was conveniently stated by Brereton J in Moratic Pty Ltd v Gordon [2007] NSWSC 5; (2007) NSW ConvR 56-172; ANZ Conv R 198; Aust Contract Reports 90-255, at [33]:
"The similarities between the two doctrines should not be allowed to mask their differences, which reflect the disparate origins of promissory estoppel and conventional estoppel. Promissory estoppel, a creature of equity, is, typically, focussed on the conscience of the defendant: it operates when the defendant has induced or acquiesced in the adoption by the plaintiff of an assumption that the defendant will not assert its strict legal rights, so to prevent unconscionable (or unconscientious) insistence by the defendant on its strict legal rights. On the other hand, conventional estoppel, a creature of the common law, is focussed on the consensual basis of the parties' relationship: it operates when both parties have adopted the same assumption as the basis of their relationship, often without appreciating that any departure from the strict legal position is involved, so as to hold both parties to their common understanding."
66 Although, in the course of oral submissions, counsel for Rebenta insisted that this was not a mere pleading point, but one of substance, the gravamen of the challenge remains obscure. It was not suggested that an estoppel by convention was not available at law, nor that the statements of principle identified above were incorrect in law. In the course of oral argument, Sackville AJA put to counsel the following proposition (Tcpt, 26/03/09 at p 43(10)):
"What if the parties had got together and one of them said, 'Look, there is an issue as to what this clause means …. Let's not have a fight about this, why don't we operate on the basis that the clause means that as long as council gives its consent - whether or not communicated - by 28 February, then neither of us will have the right to terminate.' What if that were said, what sort of estoppel would that create, if anything?"
67 Counsel's response was that such an exchange could give rise to a consensus or bargain limiting the operation of the clause. However, that was not an adequate answer to the question as to why such an arrangement could not be pleaded and proved as a conventional estoppel. As explained by Handley JA in Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298 at 308:
"Promissory estoppels and estoppels by representation lack this element of mutuality…. Estoppels by convention on the other hand are mutual."
68 The short answer to the challenge is that subject to some infelicitous drafting which had no practical consequence in the circumstances of the trial, it was open to the respondent to run a case based on estoppel by convention if he could make good the relevant factual basis.
69 The factual basis is separately challenged, but before turning to that question it is necessary to consider a separate issue raised by the appellant in relation to the parties to any such estoppel. This argument required reference to the tripartite deed between Rebenta, Ocean View and HKBA. Pursuant to that deed Rebenta covenanted with HKBA that it would not "waive any of its rights against [Ocean View] under the Agreement … without the prior written consent of HongkongBank": cl 2.3.2. Further, Rebenta and Ocean View had covenanted with HKBA that they would not "terminate, rescind or vary the Agreement by agreement with each other without the prior written consent of HongkongBank": cl 2.1.5. The appellant argued that any consensus needed to include an understanding on the part of HKBA: written submissions, par 71.
70 The real interest of HKBA, as expressed in the tripartite deed, was to ensure the project management agreement went ahead expeditiously, and was not terminated or varied without its consent. The proposed estoppel by convention promoted that object, whereas strict reliance upon the terms of the agreement undermined it. In any event, the respondent said that no objection to the pleading of a conventional estoppel limited to a consensus between Rebenta and Ocean View, had been taken at trial: Appeal Tcpt, p 92 (5)-(10). That submission was not contradicted by the appellant and it is not necessary to consider the appellant's argument on this point further.
71 The appellant also challenged the factual basis for the conclusion of the trial judge. The findings themselves were not challenged, but rather the inference which was sought to be drawn from them.
72 The substance of the appellant's challenge was that discussions between the parties concerning the development application referred to the need to obtain consent, but made no reference to the question of notification. There are two answers to this challenge. First, the absence of reference to an additional requirement was significant and, secondly, the evidence went a little further than the appellant suggested. Thus, Mr Wise gave evidence by affidavit to the following effect:
"Shortly prior to 27 February 1996, I had a conversation with Mr [Robert] Phillips to the following effect:
He said:
'I hope that Robin gets the DA through Council at its meeting on the 27 th February. Because if they don't, Millie will rescind the agreement. That will be disastrous.'
At about this time Mr Phillips also said to me words to the effect of:-
'Millie's not happy with the deal. Under the deal she gets hundreds of thousands more than she could have [got] or was ever offered before. On top of that she doesn't have to pay any agent's commission and she stands to gain up to $2 million from the joint venture. And she's still complaining. This is not good.'"
73 The affidavit evidence continued:
"On the morning of 28 February 1996 Mr Phillips informed me that Council had approved the DA the night before. Later that day I had a conversation with Mrs Phillips to the following effect:
Mrs Phillips said:
'They got the DA through last night. There's not much I can do about that now is there?'
I said:
'No.'"
74 Mr Robert Phillips agreed with the evidence given by Mr Wise as to his conversation prior to the Council meeting: Tcpt, p 1055. His Honour accepted the evidence as to Mrs Phillips' conversation with the respondent: at [231]. He also noted evidence subsequent to 28 February 1996 which was consistent with Mr Robert Phillips and Mrs Phillips accepting that Ocean View had obtained that which was required pursuant to cl 5.4.
75 In these circumstances, his Honour concluded that, whatever the proper construction of the agreement might be, the parties had acted on the basis that consent by Council to the development application, reduced to writing no later than 28 February 1996, was sufficient compliance with cl 5.4. That conclusion should be accepted, in the event that the construction of cl 5.4 to the same effect is held to be erroneous.
Timing of building consent
76 Clause 5.1.2 of the agreement required Ocean View to lodge with Council a building application "as soon as practicable but not later than six (6) weeks after the Council's approval of the Development Application". In practical terms that timing was understandable. Somewhat inconsistently, cl 5.4 required that both development consent and building consent be obtained by 28 February 1996. His Honour accepted that, if Rebenta had attempted to terminate the project management agreement in April 1996 on the basis that building consent had not been obtained by 28 February, Ocean View would have sought rectification by the deletion of the words "and Building Consent" from cl 5.4: at [214]-[215].
77 His Honour recounted the history of the project management agreement in some detail, from 25 September 1995 until its execution on 18 December 1995 at [151]-[192].
78 Certain steps in the process were clear. The first reference to the building application was introduced following the submission of a draft agreement to the solicitors for HKBA on 25 September 1995. HKBA sought to impose an obligation on Ocean View to lodge the building application and obtain approval from Council. It also sought to include a requirement that it be permitted to review and consent to the building application before it was lodged: at [152].
79 On 13 October 1995, the respondent wrote to HKBA's solicitors suggesting that the right to terminate be made conditional upon development approval not being obtained by 28 February 1996 and building approval not being obtained by 30 April 1996. HKBA's solicitors responded on 17 October requiring that both approvals be obtained by 31 December 1995: at [156].
80 On 18 October 1995 the respondent wrote to HKBA's solicitors asking them to obtain further instructions "as our client believes that the Bank will now approve 28th February 1996". The concession was made by letter dated 19 October 1995.
81 Significantly, in the light of later events, on 26 October the respondent's paralegal, Ms Margaret Rowley, wrote to the solicitor for Ocean View, Mr George Newhouse, following a conversation with Mr Robert Phillips, in the following terms:
"Robert stated that you felt that where we have 31 st December, 1995 somewhere in the document, it should read 28 th February, 1996. The only 31 st December we can find is in clause 6.4 and that is the correct date."
82 Clause 6.4 was the predecessor to cl 5.4 in the final agreement: it is clear that as at 26 October, Ms Rowley was not aware that the date had been changed. A copy of the project management agreement bearing a footer with the date 25 October still contained in cl 6.4 the date 31st December 1995. It was on that document that the solicitors for HKBA inserted in handwriting reference to the building consent also being required by that date. Those handwritten amendments were sent to the respondent by facsimile on 31 October.
83 On 2 November 1995 the respondent wrote to HKBA's solicitors noting that references to building consent in certain clauses were acceptable, but not in the predecessor to cl 5.4. Various other changes to the draft were sought at that time. A diary note prepared by HKBA's solicitors on 7 November 1995 noted that Rebenta might also have a problem with the reference to building consent in cl 6.7. Their letter of the same date accepted the objection to the inclusion of building consent in cl 5.4 and to the date in that clause being changed to 28 February 1996. They sought, in addition, the inclusion of the date 31 December 1995 for lodgement of both applications with Council, pursuant to the predecessor to cl 5.1.2.
84 On 10 November 1995 HKBA's solicitors noted a conversation with their client agreeing with a proposal that the project manager lodge the building application and strata plan with Council "asap but not more than six weeks after Council approves the DA": at [172]. On the same day, the solicitors conveyed that agreement to the respondent.
85 At this stage, the respondent left the conduct of the matter to Ms Rowley. Clause 5.4 was not amended in either of the two versions which she then sent to the solicitors for HKBA.
86 A diary note prepared by HKBA's solicitors on 10 November 1995, following receipt of a further marked-up draft of the project management agreement, noted that there was "still need to incorporate our latest amendments". That Mr Robert Phillips was also conscious of the problem in relation to the building application appeared from a contemporaneous note prepared by HKBA's solicitors on 10 November, after a conversation with him, in the following terms:
"Simply can't lodge BA until DA has been approved. And there's not enough time … now to 31/12 for the DA to be approved & for the BA & SP to be lodged. ('That's basic construction stuff which the Bank should know.' Can't understand why the Bank doesn't realise this. I told him that the Bank was merely concerned to ensure that the development gets underway asap - & indeed, that's in everyone's best interests. …
What about asap. Agreed to asap but not later than six weeks after DA is approved by Council … will lodge BA & SP for consent/approval."
87 When that proposal was put to the respondent, he replied on 10 November:
"Agreed except as regards the strata plan. The strata plan cannot be finalised until the building is almost completed as each Lot must be physically measured by the surveyor before he is able to complete such details as the area of each unit and garage/carspace, etc. The strata plan must be in registrable form before it is lodged for approval with the Council."
88 On 14 November Ms Rowley sent a copy of the revised draft to Mr Robert Phillips for approval. However, the reference to building consent was not removed from cl 5.4 before the parties executed the project management agreement on 18 November 1995. It should be noted that the documentary evidence demonstrated that the respondent had been meticulous of sending copies of all his correspondence with HKBA's solicitors to the solicitor for Ocean View, Mr Newhouse. There was, however, no evidence that Mr Newhouse took any part in the negotiations with HKBA's solicitors, nor that the respondent or anyone else at Rebenta ever invited him to do so.
89 His Honour concluded that the retention of the words "and Building Consent" in cl 5.4 was "not deliberate but a mistake": at [205]. He continued at [206]:
"There would be no rational reason for the defendant or his employee deliberately including the words in the drafts. The reason suggested by counsel for the plaintiff, that there was at this stage an impasse between [the solicitors for HKBA] and the defendant, which the defendant sought to overcome by shifting the burden of dealing with it to Robin Wise and his solicitor, simply did not exist."
90 Support for the suggestion of such a deliberate tactic came from the oral evidence given by Mr Robert Phillips. The evidence had been identified and assessed by the trial judge at [198]-[202], but the argument rejected at [209]-[211]. The substance of the appellant's argument was that it was wrong to treat the words "and Building Consent" as having been mistakenly left in the agreement despite a prior understanding that they would be removed. The appellant said that the draft bearing a footer of 10 November was the first occasion on which they were inserted and had thus been deliberately included on that date.
91 Mr Robert Phillips was expressly asked whether his belief that the inclusion of those words had been deliberate so as to pass the burden of negotiating with respect to them to Ocean View had arisen on 10 November 1995. His response had been (Tcpt, p 1080):
"Could well be right. I don't know. There were, I don't know, dozens of drafts. I don't which drafts are which. I don't have a file. I don't know."
92 This provided an unpromising basis for the submission. There was other evidence, noted above, which demonstrated with some clarity that HKBA had agreed to remove that requirement from cl 5.4 prior to 10 November. Further, the explanation for their inclusion in the draft sent by the respondent's employee on 10 November was that she was working from a marked-up draft dated 25 October, where they had been inserted in handwriting by HKBA's solicitors. The argument that an impasse had arisen on 9 November 1995 was not only inaccurate, but unhelpful. It was inaccurate because negotiations continued thereafter; it was unhelpful, because matters which had then been in dispute were later resolved. The best that the appellant could do to demonstrate such an impasse was to note that there was no response to the respondent's letter of 10 November 1995 concerning the strata plan. Yet on 14 November, HKBA's solicitors inserted the words which had been proposed in cl 5.1.2, with respect to lodgement of the building application, without reference to the strata plan. The clear inference is that their client accepted that reference to the strata plan in that timeframe would have been inappropriate, thus accepting the respondent's objection on 10 November. No error has been demonstrated in his Honour's rejection of this submission.
93 In the abstract, there might have been sense in having the developer (Ocean view) explain to HKBA how, in practical terms, the steps of development application, development consent, building application, building consent, construction and lodgement of strata plans should follow sequentially. That possibility may have been discussed between the respondent and Mr Robert Phillips. However, there was no suggestion in the evidence that anyone spoke to Mr Robin Wise, or Mr Newhouse, suggesting that course. For the impasse theory to have any grounding in fact, there should have been a note of a conversation, or else a memorandum, explaining to Mr Newhouse that it was up to Ocean View to negotiate a change with respect to the building consent. To the contrary, it was apparent that it was Mr Robert Phillips who explained "basic construction stuff" to HKBA's solicitors. His protest was clearly successful, because they recorded their agreement on the same day. The documentary record supported no other construction of events than that accepted by his Honour.
94 A subsidiary submission related to the failure of the respondent to give further evidence following the revelation by Mr Robert Phillips in the witness box that the words "and Building Consent" had been added to pass the burden of resolving the impasse to Ocean View. However, once it is accepted that there was no impasse and that Mr Phillips was unclear as to precisely when that approach had been proposed, there was little need for the respondent to give further evidence himself. The trial judge concluded that Mr Phillips' evidence could not sustain "the effect and the weight" sought to be placed on it by the appellant, a conclusion which was fully explained and sustainable on the objective evidence. The failure of the respondent to re-enter the witness box became inconsequential.
95 A further submission placed reliance upon the fact that, in April 1996, the respondent had advised Mrs Phillips that Rebenta had a right to terminate under cl 5.4, based on the absence of building consent by 28 February, without then adverting to the recent events which should have alerted him to the fact that, consistently with evidence he gave at trial, this had happened by way of a mistake in his office. His Honour treated that submission as lacking weight in the following terms at [208]:
"… I am prepared to accept that the defendant made these assertions on the basis of looking, some months afterwards, at the written terms of the Project Management Agreement as executed, not recollecting that a consensus had been reached that the words in question were not to be included in the Agreement."
96 In challenging this finding in this Court, no reference was made to any cross-examination of the respondent which might have supported a rejection of this conclusion. Furthermore, there was the evidence referred to above of a conversation with Mrs Phillips on 28 February in which she had confirmed that because the development consent had been given the previous night, there was no basis for termination.
97 This analysis of the evidence, accepted by his Honour, led to the inevitable conclusion that, at the date the project management agreement was executed, both Rebenta and Ocean View believed, through their respective agents, that there was no requirement to obtain building consent by 28 February 1996, whilst the only party which had pressed such an obligation, namely HKBA, had agreed in writing to remove that obligation from cl 5.4. The result was to achieve consistency with cl 5.1.2, requiring the building consent no later than six weeks after the Council consented to the development application.
98 Once a common intention had been established which was not embodied in the written agreement as executed, it was not in dispute that Ocean View might have obtained rectification had Rebenta sought to enforce the written agreement according to its terms: see, eg, Maralinga Pty Ltd v Major Enterprises Pty Ltd [1973] HCA 23; 128 CLR 336 at 350 (Mason J, Menzies J agreeing). Indeed, given the appellant's concession that it could only succeed in establishing loss flowing from a right to terminate on the basis of an absence of a building consent by 28 February 1996, if the rectification case were clearly hopeless, this ground of appeal must fail. As his Honour found, far from being hopeless, a claim for rectification would probably have succeeded.
99 In these circumstances, there is no need to deal with the final question identified at [46] above, namely waiver.
100 His Honour's conclusion that, had Rebenta sought to terminate the agreement in April 1996 on the basis that the building consent had not been obtained by 28 February, Ocean View would have successfully sought rectification of the agreement to delete the words "and Building Consent", should be upheld.
Conclusions
101 The appellant having failed in its challenge to critical aspects of the decision of the trial judge, the appeal must be dismissed with costs.
102 SACKVILLE AJA: I agree with the orders proposed by Basten JA and with his Honour's reasons
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