1. It is convenient to deal with the counterclaim before addressing the plaintiff's claim. The outcome of the counterclaim depends upon the interpretation of the introductory words of cl 5.8, namely, "In consideration for Connector Park completing its obligations as set out in this clause 5 ...".
2. The defendant contends that, because it undertook all the work required by cl 5.6, it completed "its obligations as set out in this clause 5", and is therefore entitled to the payment of the two sums totalling $400,000 plus GST. The plaintiff contends that, because the required construction work was not completed by 6 January 2005 as required by cl 5.6, and because the defendant did not do all things necessary to ensure that the roadway was taken over as a road maintainable by the council by 6 July 2005 as required by that clause, it cannot be said that the defendant completed "its obligations as set out in this clause 5". It contends that the defendant completed its obligations after the deadlines provided for in cl 5.6, and thus not "as set out in" cl 5.
3. The proper approach to the interpretation of the critical words in cl 5.8 is as stated by Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52, 219 CLR 165 at [40], where their Honours said:

1. The plaintiff is claiming damages for lost opportunity. The basis for awarding damages for a lost opportunity was explained by French CJ, Kiefel J (as she then was) and Keane J in Badenach v Calvert [2016] HCA 18, 331 ALR 48 at [39]- [41] as follows:

1. It is true that cl 6.11 of the contract provided that time was not of the essence, and that that clause applied to the time limits specified in cl 5.6 for the construction of the roadway and the taking over of that road as one maintainable by the council. An express provision in a contract making time of the essence can make a difference as to the consequences of a breach of contract. If time is of the essence, then the innocent party may be entitled to terminate the contract following a breach. When, as in this case, time is not of the essence, the failure to perform a contractual obligation within a specified time amounts to a breach of contract entitling the innocent party to damages at common law. The fact that time was not of the essence makes no difference in relation to the plaintiff's claim.
2. At common law, stipulations as to time were deemed to be of the essence of a contract, so that a failure to adhere to a time stipulation would entitle the other party to terminate the contract: Noble v Edwardes (1877) 5 Ch D 378 at 393. Courts of equity developed a doctrine that, as a general rule, time stipulations would be treated as not of the essence: Stickney v Keeble [1915] AC 386. Now that the rules of common law and equity are administered concurrently, the equitable rules prevail. However courts of equity never held that a party who failed to perform a contractual obligation on time was not liable for damages for breach: Canning v Temby [1905] HCA 45; (1906) 3 CLR 419 at 426.
3. It is true that the consent order of 17 June 2008 gave the defendant until 5pm on 25 July 2008 to complete its construction obligations under cl 5.7, and until 5pm on 1 August 2008 to obtain the certificate referred to in cl 5.8(a). However that order did not result in the defendant somehow ceasing to be in breach of contract. The effect of the new time requirements was that, if they were not complied with, the defendant would be not only in breach of contract, but could also be in contempt of court.

1. As I have said, the defendant contends that the plaintiff failed to mitigate its loss by failing to engage another contractor to complete the roadworks within a reasonable time after the alleged breach.
2. The plaintiff accepts that, at least at common law, it had a duty to take all reasonable steps to mitigate its loss: Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd [1998] HCA 38; (1998) 192 CLR 603 per Brennan CJ at [3] and Hayne J at [134].
3. However the land over which the roadway was to be constructed belonged to the defendant. The defendant is contending that the plaintiff had a duty to engage another contractor to enter onto its land and construct the roadway.
4. The defendant relies on cl 5.4 of the contract which provided as follows:

1. Whenever a right of way has been granted without the rights of the dominant owner having been expressly defined, the dominant owner has "such ancillary rights as are reasonably necessary to the effective and reasonable exercise of the rights expressly granted": Zenere v Leate (1980) 1 BPR 9,300 at 9,305 (McLelland J, Supreme Court of New South Wales); Bland v Levi [2000] NSWSC 161, 9 BPR 17,517 at [13]- [22]. Any dealing with the land in excess of the dominant owner's right will be an actionable trespass: Dand v Kingscote [1840] EngR 53; (1840) 6 M & W 175, 151 ER 370; Bland v Levi at [25].
2. In order to determine what ancillary rights were reasonably necessary to the effective and reasonable exercise of the right of carriageway granted to the plaintiff, it is necessary to take into account the heading of cl 5.4, which read, "Access for works", and also to take into account cl 5.3, which read as follows:

1. The Mount Pleasant subdivision eventually comprised over 200 lots. On 20 October 2004 the plaintiff made a development application to the council, seeking a permit for a three-stage 58-lot subdivision. There were a number of impediments to the full development of the subdivision at that stage, particularly in relation to roadways and zoning. Road access for the subdivision was possible only from Ernest Street and through the Connector Park land. Because Ernest Street was an ordinary residential street, it was inappropriate for the major access road to connect to it. Under the 1996 planning scheme, part of the Mount Pleasant subdivision land was zoned "Future Urban" and part was zoned "rural". Residential subdivisions were prohibited in the rural zone. Rezoning was needed. In the "Future Urban" zone, residential subdivisions were discretionary.
2. The application was viewed unfavourably. On 23 December 2004 a council officer wrote to the plaintiff's surveyor requesting further information. He pointed out that the council had adopted a policy that subdivisions in the "Future Urban" zone would only be approved if the developer had submitted an "overall development plan for all continuous pieces in the zone", and that rezoning to residential had to take place before any subdivision was considered.
3. On 14 June 2005 the council decided to grant a permit for a 31-lot subdivision, comprising the whole of the plaintiff's proposed stage 1 and part of its proposed stage 2. No rezoning had taken place, or even been sought.
4. The plaintiff appealed from that decision to the Resource Management and Planning Appeal Tribunal ("the RMPAT"). So did the new owner of the Mount Pleasant homestead, Mr de Moor. On 13 September 2005 the Tribunal decided that the approved 31-lot subdivision was so different from the 58-lot subdivision originally proposed that the council had had no jurisdiction to grant the permit: Page Seager obo Paul Jacques Marie de Moor v Launceston City Council and G J Walkem & Co Pty Ltd and RV Pty Ltd v Launceston City Council [2005] TASRMPAT 202.
5. The plaintiff took the view that, since the council's decision had been a nullity, it had not made a decision in relation to the application of 20 October 2004 at all. In such a situation, s 59 of the Land Use Planning and Approvals Act 1993 ("the LUPA Act") deems the council to have made a decision to permit the proposed development, and allows the developer to institute an appeal to the Tribunal with a view to the Tribunal determining appropriate permit conditions. The plaintiff therefore lodged such an appeal on 14 September 2005. On the same day a council officer, as a delegate of the council, made a fresh decision refusing the development application on the ground of "Lack of traffic infrastructure to support density of development requested."
6. The Tribunal heard the appeal over four days in November 2005. It appears that the grounds of appeal were amended so as to challenge the delegate's decision to refuse a permit. On 8 December 2005 the Tribunal upheld that decision and dismissed the appeal: D Armstrong obo G J Walkem & Co obo RV Pty Ltd v Launceston City Council [2005] TASRMPAT 284.
7. The Tribunal made it clear that it considered the proposed subdivision inappropriate because of matters relating to traffic and stormwater disposal. As to traffic, it noted that the plaintiff had applied for "a 57 lot subdivision, in the form of a cul-de-sac, and not one with through traffic". It considered two alternatives - a 40-lot subdivision, and a subdivision with provision for through traffic via a roadway through the Connector Park land - but considered that each of those alternatives would create a substantially different subdivision that it had no jurisdiction to approve.
8. In relation to stormwater, it relied on the evidence of the council's manager of hydraulic modelling and systems, Mr S Ratcliffe, that "from a drainage and flood defence perspective no subdivision should be approved in a situation such as proposed unless carefully designed measures were put in place to mitigate the impact of increased runoff".

1. Early in 2006 the Tasmanian Heritage Council made a decision to list part of the plaintiff's land on the Tasmanian Heritage Register pursuant to the Historic Cultural Heritage Act 1995. The area in question was adjacent to the homestead property owned by Mr de Moor. That listing would have substantially impeded the subdivision of the plaintiff's land. The plaintiff appealed to the RMPAT. On 31 August 2006 the Tribunal made a decision in the plaintiff's favour: S McElwaine obo RV Pty Ltd v Tasmanian Heritage Council [2006] TASRMPAT 177. The effect of the Tribunal's decision was that the area affected by the Heritage Register listing was substantially reduced.

1. The subdivision is out of character with the surrounding development and streetscape.
2. The proposal is premature pending the completion of an outline development plan for the area."
3. The plaintiff appealed unsuccessfully to the RMPAT: RV Pty Ltd v Launceston City Council [2007] TASRMPAT 105. In that decision at [30] the Tribunal expressed the view that "the proposal intensifies density in a way which is not appropriate". I regard that decision as insignificant. It related only to the density of development in a small part of Stage 1.

1. As one can see, depending on what percentages are adopted in respect of investment returns and discount rates, the plaintiff's gross losses were estimated at between $1,879,840 and $2,710,776. Those figures are estimates of the plaintiff's losses as at September 2014. In addition, the plaintiff is claiming damages in the nature of interest from September 2014 until judgment in accordance with the principles discussed by the High Court in Hungerfords v Walker [1989] HCA 8; (1989) 171 CLR 125.
2. An experienced chartered accountant named Matthew Wallace gave evidence for the defendant. He criticised some aspects of the calculations undertaken by the plaintiff's witnesses. However he agreed that discounted cashflow was a common methodology employed to calculate the present value of a future cashflow. He accepted that cash received at an earlier point in time is more valuable than cash received at a later point in time; that such calculations had to take account of risk associated with the cashflow stream; that that risk was reflected in the discount rate used to convert future cashflows into a present value; and that the use of such a methodology was widespread in relation to projects with a finite life, such as subdivisions. He accepted that one has to make a projection in undertaking a discounted cashflow analysis for a subdivision, and that that projection was a matter of professional judgment.
3. The "net present value" approach has been considered to be an appropriate method for assessing damages to compensate for lost cashflows that would have been received in a number of cases concerning lost commercial opportunities: IOOF Building Society Pty Ltd v Foxeden Pty Ltd [2009] VSCA 138, 23 VR 536; Hart Security Australia Pty Ltd v Boucousis [2014] NSWSC 1654, 102 ACSR 557; North East Solution Pty Ltd v Masters Home Improvement Australia Pty Ltd [2016] VSC 1.
4. Most of Mr Wallace's evidence was set out in a report by him dated 7 May 2016. I held most of the report to be inadmissible, but the admissible parts dealt with four topics which I will now address. Mr Wallace is the managing partner of the Hobart office of KPMG. His report contained a standard form of disclaimer which said, amongst other things, that the report was "not intended to influence a person in making a decision". It was tendered precisely for the purpose of influencing me in making a decision, and I will therefore ignore the disclaimer.
5. Mr Wallace compared the sales price data relied upon by Mr Rands for 83 lots with sales price data provided in the reports of the plaintiff's valuers, Mr Cubbins and Mr Pitt. He calculated that on average the sale prices were 9.07% above the figures relied on by Mr Rands. He noted that Mr Rands' calculations assumed that the sale prices would have been the same if the lots had sold 3½ years earlier. He suggested that the appropriate approach was to assume that the sale prices would have been 9.07% lower if sales had occurred 3½ years earlier. However Mr Wallace was not aware that the plaintiff had allowed rebates to some purchasers, as mentioned above. Mr Rands used figures provided by Mr Blackwood that took those rebates into account. Mr Cubbins and Mr Pitt had information as to the pre-rebate sales prices. The evidence does not suggest any other reason for the discrepancies between the two sets of figures. It was appropriate for Mr Rands to rely on Mr Blackwood's figures, rather than the pre-rebate sale prices.
6. Mr Wallace observed that as at 30 June 2013 there were eight lots in Stage 2A-4 of the subdivision that remained unsold, but that Mr Blackwood's spreadsheet showed that there were 10 lots in that stage that remained unsold. However any adjustment of Mr Rands' calculations to take account of such a discrepancy could only benefit the plaintiff. Mr Blackwood took a conservative approach in the assumptions that he made as to the rates of future sales. A dollar received in 2013 is worth more to a developer than a dollar received in 2014. It follows that a delay in the development of a fast-selling subdivision should result in a greater award of damages than a delay in the development of a slow-selling subdivision.
7. Mr Wallace observed that the plaintiff company made a loss of $6,307 in the 2010 tax year; that it would therefore have been entitled to claim a tax deduction in that sum the following year; and that Mr Rands had failed to take the availability of that deduction into account. That was correct. The estimate of tax payable for 2011 was therefore overstated by $1,892, that being 30% of $6,307. It follows that Mr Rands' final figures for losses as at September 2014 were overstated. Doing the best I can, I estimate the extent of that overstatement to have been in the vicinity of $2,500. I regard that as insignificant, having regard to the size and imprecision of the plaintiff's claim.
8. Mr Wallace observed that Mr Rands' calculations were based on estimated financial information for 2014 and 2015, and that the actual information for those years would have been available at the time of trial. He opined that the cashflow report should be updated to reflect the actual information for those years. However, whilst such an updating would no doubt have resulted in figures that were slightly more reliable, the evidence does not establish whether such an updating would have benefited the defendant or the plaintiff.
9. No other opinions were expressed by Mr Wallace in the admissible parts of his report. That does not reflect badly on Mr Wallace. The defendant changed solicitors not long before the trial. The circumstances in which Mr Wallace was engaged and briefed prevented him from undertaking a more thorough and more timely investigation of the information and calculations relied upon by the plaintiff.
10. Mr Blackwood was thorough and meticulous in his calculations, and conservative in his assumptions. I accept that his methodology was appropriate. It is true that he made no allowance for real estate prices increasing with inflation, but sale prices are only one component in a very complex calculation. Construction costs might also increase with inflation, but Mr Blackwood made no assumption that they would. Rather than looking at trends in relation to real estate prices or construction costs in isolation, it would be more appropriate to consider what trends there were as to the margins between sale prices and expenses, but I have not been presented with any evidence as to such margins, and will therefore have to assess damages as best I can.
11. As I have said, Mr Rands calculated six different estimates of the plaintiff's loss as at September 2014, using three different earnings rates and two different discount rates. His evidence as to the three different earnings rates was to the following effect:
    • The lowest figure, 6.2%, came from the Australian Stock Exchange 2014 Long-term Investing Report as the annual percentage return, before tax, on Australian fixed interest investments over the 10 years ending in December 2013.
    • The middle figure, 6.6%, represented the rate of return on an investment made by the plaintiff in 2003, according to information provided to Mr Rands.
    • The upper figure, 9.2%, came from the same Australian Stock Exchange report. It represented the annual gross return on investments in Australian shares for the 10 years to December 2013.
12. Counsel for the plaintiff submitted that the assumptions that underlay Mr Rands' opinion were very conservative, and likely to result in a significant underestimate of the plaintiff's actual financial loss. I took him to be suggesting that the adoption of the lower figures of 6.2% and 6.6% would not do justice to the plaintiff.
13. Mr Rands gave evidence that his discount percentages of 22% and 30% represented the upper and lower limits of the range of appropriate discount percentages, having regard to all the circumstances. Those circumstances include the risks of permits being refused or delays being encountered because of issues relating to stormwater, heritage, visual impact and so forth. Mr Rands said that an appropriate discount for a risk-free investment would be 2.8%, and that premiums for various risks would have to be added to that figure. He did not undertake a precise calculation, adding different percentages for different components. His final percentages were the product of what I would call an intuitive synthesis. He was unshaken as to the appropriateness of the earnings rates and discount rates used in his calculations, and not contradicted by Mr Wallace.
14. I accept that the assumptions made by Mr Blackwood and Mr Rands were so conservative that the strict adoption of an earnings rate of 6.2% or 6.6% would not do justice to the plaintiff. Doing the best I can, I think it would be appropriate to adopt an earnings rate nearer to 9% than 6.6%, and to adopt a discount rate more or less half way between 22% and 30%. Having regard to the figures set out at [91] above, I am satisfied that a payment of $2.2 million in September 2014 would have been appropriate to compensate the plaintiff for its lost commercial opportunity.
15. The plaintiff is entitled to damages in the nature of interest in respect of the period from September 2014 until judgment in accordance with the principles discussed by the High Court in Hungerfords v Walker (above). A bank statement tendered in evidence shows that the plaintiff had an overdraft of over $3 million as at 3 February 2014, and that the interest rate applicable to that overdraft was then 5.65%. I do not have any more recent information as to its indebtedness or the applicable interest rate. I am satisfied that if the plaintiff had received $2.2 million in September 2014 it would have reduced its overdraft and/or made investments that would have yielded returns in the vicinity of 5.65% per annum. It is now 31 months since September 2014. If the defendant were required to pay 31 months' simple interest on $2.2 million at 5.65% per annum, I calculate that the amount payable would be $321,108. I have decided to round that down to $320,000. The plaintiff should therefore have judgment for $2.52 million on its claim.

(1906) 3 CLR 419

(1998) 192 CLR 603

(1989) 171 CLR 125