TALUJA v ARDINO

Supreme Court of NSW|2001-06-22|Before: Newman AJ

CITATION : TALUJA v ARDINO [2001] NSWSC 566 FILE NUMBER(S) : SC 11450/94 HEARING DATE(S) : 18-22 June 2001 JUDGMENT DATE : 6 July 2001

PARTIES : Nirmal Taluja (Plaintiff) Rocco Michael Ardino (Defendant) JUDGMENT OF : Newman AJ at 1

COUNSEL : B. DeBuse (Plaintiff) R. Weber (Defendant) SOLICITORS : Nicholas Vasta and Co (Plaintiff) Pricewaterhouse Coopers Legal (Defendant) CATCHWORDS : Negligence - Solicitor and Client - Contract for the Sale of Land - Credibility of Witness - s149 Certificate - Warranties - right to Rescind Contract - Conveyancing (Vendor Disclosure and Warranty) Regulation 1986, cl 5 LEGISLATION CITED : Conveyancing (Vendor Disclosure and Warranty) Regulation 1986 CASES CITED : Copmar Holdings Pty Ltd v Commonwealth (1989) NSW ConvR 55-451 Korbol Holdings Pty Ltd v Johnson & Anor (1987) NSW ConvR 55-337 DECISION : Verdict for the defendant

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Friday, 6 July 2001 11450/94 - Nirmal TALUJA v Rocco Michael ARDINO JUDGMENT

1 HIS HONOUR: This is a claim for professional negligence brought by a former client against her solicitor.

2 The action arises out of a conveyancing transaction involving land near Wallacia in New South Wales known as 27 Greendale Road. There was no dispute in the matter that the defendant acted for the plaintiff as her solicitor in the transaction. Again, there was no dispute that a contract for the subject land was exchanged on 31st March 1989 and that the conveyance was completed some six months later with the Plaintiff paying the purchase price of $390,000 and stamp duty of $13,041.51. The plaintiff is still the owner in fee simple of the subject property.

3 The plaintiff's allegations of breach of duty against the defendant are bipartite in nature. First, the plaintiff alleges that prior to the contract being exchanged on 31st March 1989 the defendant failed:- (a) to advise her and (b) to make adequate inquiries before the exchange took place.

4 The second part of the plaintiff's case involves events which occurred after exchange but before settlement. In relation to this part of her case the plaintiff alleges that the defendant was in breach of his duty in failing to advise her of her right to rescind. Again her allegations are bipartite in nature. Here, first she alleges that a difference existed between a certificate annexed to the contract pursuant to s 149 of the Environmental Planning and Assessment Act 1979 and a certificate under the same Act and section obtained after the contract had been delivered to the defendant which certificate was inconsistent with the certificate annexed to the contract. The plaintiff alleges that the difference between the two s 149 certificates was sufficient for her to rescind the contract as she desired to do. The second part of her allegation of breach of duty after contract but before completion was that a letter had been received from Elcom which the plaintiff claimed gave rise to a right for her to rescind the contract. I shall deal in detail with these allegations later in these reasons.

5 In relation to the first part of the plaintiff's claim both the plaintiff and the defendant gave evidence the content of which was absolutely contradictory. In relation to every allegation of breach of duty alleged by the plaintiff and concerning which she deposed the defendant not only denies his failure to advise or make inquiries but gives positive evidence to the contrary. In short the resolution of the first part of the plaintiff's claim entirely depends on the Court's analysis of the credibility of the parties.

6 In relation to the second part of the plaintiff's claim because questions of construction and law arise credibility of the parties is not an issue of importance.

7 I turn then to what I have described as the first part of the plaintiff's claim. The plaintiff pleaded her case in her statement of claim as follows:- 'Para 7. At all material times in March 1989 and prior to 31 March 1989:- (a) the property was in a noise affected area from the proposed Badgerys Creek second Sydney Airport; (b) the property had no vehicular access by road to it and relied upon the goodwill of the trustees of the Roman Catholic Church for the Diocese of Parramatta (the trustees) being the registered proprietors of Lot 1 in Deposited Plan 195955 and known as St Francis Xavier Cemetery, Greendale Road, Wallacia for access by a vehicular road to the property; (c) was subject to electricity easement for services. (d) was subject to contemplated changes by the Local Government authorities as to the terms of any development on the property. (e) was subject to contemplated changes by the Electricity Commission as to the use of the existing easement. Para 11. By reason of the matters set out in paragraph 7, 8 and 9 and above a solicitor exercising reasonable care and skill would have advised the plaintiff that prior to purchasing the property she should make inquiries or that he would make inquiries (a) of the Local Government authority in relation to any changes or proposed changes to the terms of development consent affecting the property (b) of the electricity commission as to changes or proposed changes to the use of the existing easement affecting the property. Para 12. By reason of the matters set out in paragraphs 8 and 10 above a solicitor exercising reasonable care and skill would have advised the plaintiff to obtain a survey of the property or at least the area of the vehicular access to the road. Para 15. In breach of the defendant's retainer or his duty of care the defendant failed to advise the plaintiff that: (a) the property was in a noise affected area from the proposed Badgerys Creek second Sydney airport. (b) that she should obtain a survey of the land and more particularly a survey of that portion of land through which she obtained access which would have revealed the ownership of the only existing means of vehicular access onto the property. (d) that the property was subject to an easement for electricity services. (e) that each of the matters set out in (a) to (d) above were problems for her in subdividing and developing the property. (f) that she should make the inquiries set out in paragraph 11 above.'

8 While the plaintiff was given leave to call additional oral evidence to that contained in an affidavit she had sworn of 12th July 1996 in relation to her allegations she was taken to only a few matters in chief in addition to those matters she adverted to in her affidavit when dealing with the first part of her claim.

9 Paragraphs 2, 3 and 4 of her affidavit are as follows:- '2. On 15 March 1989 or thereabouts, the defendant contacted me in reference to the property, the subject of these proceedings and asked "Are you serious about this property?" I said "Yes". He said "Bring the money and come in to sign the contract." I asked him "Is there any problem with the contract?". He said "No". 3. On or about 29 March 1989 I went to his office, gave him the cheque regarding the deposit and signed the contract. At the time he was very bust and did not have time to talk to me. He did not explain the 149 certificate to me, there was no explanation regarding the proposed airport. There was some discussion regarding the address of the property, it was unclear whether the correct address was no. 58 or no. 28. Mr Ardino said he would check this against the lot number. He asked me " Are the boundary neighbours the same as in the diagram? I said "Yes". The vendor had a caravan on the site where he was living. I told Mr Ardino that I did not need this caravan, so if he could retain the caravan, I asked whether the figure could be reduced by about $20,000.00. This was later agreed. I told Mr Ardino "This is my retirement target and I would like to build two houses for my two children, there will be 25 acres for each, with a house each." I explained to Mr Ardino that my funds were limited. The vendor then agreed to give me a loan at 13% fixed for three years. 4. On or about 31 March 1989 I telephoned Mr Ardino and asked "Is everything OK with the property? He said "Yes". Contracts were then exchanged.'

10 In chief orally she deposed that she had a telephone conversation with the defendant in March and had told him she was buying the land to subdivide and build two houses for her children and to retire on it and that this 'is my last asset'. She denied that after she had told him that the defendant did not say anything to her nor at any stage prior to settlement did he raise with her the question of the s 149 certificate or tell her anything about Badgerys Creek airport. She also stated that he did not ask her whether she required a survey of the land. Later in her oral evidence in chief she denied that the defendant had face to face conference lasting some three quarters of an hour in relation to the purchase of the subject property on 14th March 1989.

11 If the plaintiff's account were to be accepted then the Court would come to the conclusion that the defendant had acted for her in a most desultory fashion prior to the exchange of contracts. Indeed, the Court would not need the expert evidence of Mr Neville Moses, should the plaintiff be accepted, to conclude that the defendant was clearly in breach of his duty of care as a solicitor.

12 However, as I have stated above, the defendant's evidence was absolutely to the contrary to that deposed to by the plaintiff in relation to the first part of the matter.

13 I turn then to the defendant's evidence in chief. He like the plaintiff had sworn an affidavit dealing with the matters in issue and he, like the plaintiff, gave evidence at the hearing. 14 He deposed in his affidavit that his initial instructions in the matter had been received by telephone when the plaintiff advised that she was purchasing the subject property and would be delivering the contract to him. It was his evidence after receiving the contract from the plaintiff that he had a lengthy conference face to face with her at his office on 14th March 1989. A note to this effect was placed on the inside cover of his file. The file was available in Court. His evidence was that prior to seeing the plaintiff on 14th March 1989 he had read the contract in detail and had marked those matters on the contract which he wished to discuss with the plaintiff. Indeed he annexed a copy of the contract signed by the plaintiff. I should at this point observe that a dispute emerged as to how it was that the copy of the contract annexed to the defendant's affidavit came into being. Let me say at once that I accept that the copy contract annexed by the defendant to his affidavit was one obtained by his solicitors from the solicitors for the vendor in the conveyancing transaction. 15 As to the conference on 14th March 1989 the defendant deposed that he discussed the question of subdivision and the difficulties in so doing with the plaintiff. Additionally he discussed the contents of the s 149 certificate. It was his evidence that he drew the attention of the plaintiff that the certificate revealed that the subject property was in a noise affected area from the proposed Badgerys Creek airport. He deposed that he told her he could not advise her in relation to the question of noise affectation without carrying out full investigations. The plaintiff instructed him not to. 16 Again in relation to the question of a survey the defendant advised that he told the plaintiff that if she wanted a survey to ensure that there were no encroachments or other problems with the land or its boundaries that they obtain a quote first. He claimed he told her this because the size of the land would mean the survey would be expensive. That lead after discussion to the plaintiff and the defendant looking at the deposited plan which was annexed to the contract for sale. Following the discussion the plaintiff instructed the defendant not to obtain the survey because she did not think it was necessary to spend the money. 17 Additionally the defendant deposed that the plaintiff at no time had instructed him that access to the property was in close proximity to Church owned land. Had she told him that he would have advised her to obtain a survey limited to the particular boundary proximate to the Church owned land to make certain of access. 18 In short the defendant flatly denied the plaintiff's allegation that he had not properly advised her prior to the exchange of contracts. As I have already noted above questions of credibility are vital in determining the first part of the plaintiff's claim. I believe it is a matter of importance in determining credibility that both the defendant and the plaintiff are professional people. The plaintiff is a general medical practitioner and the defendant, of course, is a solicitor. This is not a matter where one party is disadvantaged because of limited education. One problem which fronts the Court in determining credibility is the undisputed fact that the plaintiff was a very difficult witness. Even her counsel conceded this to be so. He did so in conceding that in her evidence she was determined to act as an advocate in her own case rather than merely appear as a witness. The defendant on the other hand gave his evidence in a proper fashion. This difference in approach by witnesses would not of itself cause me to determine the credibility issue. My view is it is better to look at matters of content rather than presentation in determining such an issue. 19 Ex facie it is difficult to believe that the plaintiff would have accepted the desultory approach to the transaction which she deposes that the defendant exhibited prior to the exchange of contracts. She was no stranger to dealings in real estate. In cross-examination after more than just a little coaxing she conceded that as of 31st March 1989 she owned a number of other properties - some of them being interstate. However, she claimed it was her ex-husband who conducted most of the dealings connected with the acquisition of these properties. He being absent overseas at the time the subject property was purchased she stated she was alone and thus vulnerable. This summary of her position as I understood it does not sit squarely with certain events which occurred prior to the plaintiff engaging the defendant. Earlier she had sought to engage another firm of solicitors, Messrs Keddies to carry out the conveyance of the subject land. She conceded that she had negotiated a deal with Messrs Keddies whereby they would charge her only 25% of the scaled professional fees. The defendant deposed that she had negotiated a position with him that he would charge no professional fees. The basis upon which the deal was struck was that the plaintiff in her medical practice treated people who were suffering from personal injuries which had arisen in a situation where litigation might ensue. She had referred a number of her clients to the defendant prior to instructing him in the matter now before the Court. A similar inter-professional relationship existed between the plaintiff and Messrs Keddies. 20 The plaintiff's previous dealings in land and the manner in which she was able to negotiate the fees with solicitors are indicative to me of a greater knowledge of events relating to the conveyance of land than the plaintiff was prepared to disclose. It is difficult to believe that a person of the plaintiff's education and experience in dealing with land and solicitors would accept the desultory approach which she deposes that the defendant adopted prior to the exchange of contracts. 21 That difficulty was compounded by an evasiveness portrayed by the plaintiff in relation to a number of matters raised with her in cross-examination. For instance, she was very chary about answering questions relating to the amount which she subsequently wished to sell the land for. There were other matters where the plaintiff could not remember matters which one would have thought a person of her education would have had no difficulty in remembering. It is these matters rather than the voluble manner and adversarial way in which the plaintiff gave her evidence which lead me to the conclusion that I cannot rely upon her evidence in this matter. There is nothing given in evidence by the defendant (and he was extensively cross-examined) to lead me to any other conclusion that he is a witness of truth. Wherever the evidence give by the plaintiff and the defendant are in conflict I accept the defendant's version. Thus I find that an alleged admission of fault by the defendant referred to by the plaintiff in paragraph 12 of her affidavit (and denied by the defendant in evidence) is not established. 22 Accordingly I am of the view that the plaintiff has not established any of the matters of fact upon which she relies in support of her claim that the defendant was in breach of his duty prior to the exchange of contracts. Thus this part of her claim must fail.

23 I now turn to the plaintiff's allegation that the defendant was in breach of his duty of care in failing to advise the plaintiff that she had a right to rescind following exchange. This allegation is again bipartite. The first of her allegations is that because there was significant difference between the s 149 certificate annexed to the contract and a later s 149 certificate obtained by the defendant that he should have advised her that she had a right to rescind. The second matter involves advice received from Elcom relating to the possibility of power transmission lines being placed upon the subject land. Again it is the plaintiff's contention that this letter formed a basis for rescission and the defendant was in breach of his duty by failing to advise the plaintiff that she could rescind. 24 I turn first to the discrepancy between the two s 149 certificates. The s 149 certificate annexed to the contract for sale contains the following legend on the first page of the certificate:- 'Whether the demolition of any building on the land requires development consent to be obtained.' Following that legend the word 'Yes' is crossed out leaving the word 'No' standing untrammelled. 25 In the s 149 certificate obtained by the defendant bearing date 28th March 1989 the word 'No' is crossed out in distinction from the case with the certificate annexed to the contract. It is common ground that the defendant on observing the discrepancy between the certificates should have conducted further inquiries. Indeed it is also common ground that the plaintiff asked the defendant if the discrepancy between the certificates formed a basis for rescission of contract. The defendant admitted that he advised that it would not. 26 Accordingly if the discrepancy between the two certificates did mean that the plaintiff could not demolish the shed which was erected on the subject land without Council permission then it follows that pursuant to the implied warranties contained in the Conveyancing (Vendor Disclosure and Warranty) Regulation 1986 the plaintiff would have had a right to rescind and that the defendant's advice was in error. Furthermore, if this be the case, his failure to conduct further inquiries once the plaintiff had queried the discrepancy in the certificates would in my view found a case of breach of duty. 27 This, of course, assumes there was a proper basis for rescission. To found a case for rescission the plaintiff would have to establish that at the time when contracts were exchanged the land was affected by the necessity for Council approval to be obtained before the shed on the land could be demolished. 28 In fact that was not the case. Had the defendant inquired of the Council, as he concedes he should have, that inquiry would revealed that Council approval to demolish was not in fact required. That inquiry was made by the plaintiff's present solicitors by letter to the Liverpool City Council on 7th April 1998. The Council's reply of 29th September 1998 contains, inter alia, the following advice:- 'With regard to the differences between the two certificates it is advised as follows: 1. Whether demolition of any building requires development consent. The change whereby consent was required on the certificate dated 28/3/89 was due to Draft Plan 173 which related to items of heritage significance. It is noted that three items of heritage significance adjoin the subject property, and as such the requirement for to obtain consent prior to demolition only related to the particular heritage items (being the Shadforth Monument, the former St Marks Anglican Church and cemetery and the Greendale Roman catholic cemetery).' 29 The implied warranty contained in s 5(1) of the Conveyancing (Vendor Disclosure and Warranty) Regulation 1986 is in the following terms:-

(1) For the purpose of section 52A (2) (b) of the Act, the prescribed warranty is as follows: 'The vendor warrants that, except as specifically disclosed in the contract, the land contained in the contract for sale is not affected at the date of making of the contract by any of the following matters: (a) any matter prescribed by Schedule 2 to the Environmental Planning and Assessment Regulation 1980 except, if the land is residential property within the meaning of Division 8 of Part 4 of the Act, any matter relating to a State environmental planning policy, a regional environmental plan, a draft State environmental planning policy or a draft regional environmental plan applying to the land;

…… (2) For the purposes of the warranty prescribed by subclause (1) - (a) land is affected by a proposal of an authority or body if the authority or body has issued a statement in writing, the substance of which is inconsistent with there being no proposal of that authority or body affecting the land.' …… 30 It follows, as the s 149 certificate annexed to the contract correctly stated that there was no requirement for Liverpool City Council to give permission before any demolition could be carried out, there was no breach of warranty on behalf of the vendor. Thus the plaintiff had no right to rescind on the basis of the discrepancy between the two certificates. This allegation must therefore fail. 31 As I have said the plaintiff also alleges that the defendant was in breach of duty by failing to advise her that she was entitled to rescind the contract on the basis of advice received from Elcom relating to a proposal that power lines might be placed upon the subject land. 32 The letter from Elcom which is dated 27th April 1989 came into being as a consequence of an inquiry made by Kay Ryan and Company, the legal search company engaged by the defendant to carry inquiries in the matter. 33 Because of its importance I set out the letter in full: 'KEMPS CREEK 500 kV SUBSTATION TRANSMISSION LINE OUTLETS PROPERTY CONVEYANCING ENQUIRY:088-0261-9 (TALUJA FROM PEDEMONT)

I refer to the enquiry submitted by you in respect to Lot 1, DP 520904.

A search of Commission records indicated that at this time there are no Commission works on the property and there is no present proposal to acquire easement rights or other interests in the above land.

However the land lies within an area under investigation for a high voltage transmission line proposed to be constructed from Kemps Creek Substation to the existing Yass - Sydney West 330 kV Transmission Line.

The Commission's investigation will cover a wide area and will examine the alternatives that are available for accommodating the transmission line within an easement width of 70 metres. These investigations are of necessity detailed and time consuming and when completed, expected late 1989, a determination as to the most suitable alternative will be made.

I should like to add that the various routes under examination are not fixed and will continue to be subject to modification as the investigation proceeds. Following the determination arrangements will be made to secure the necessary easement rights prior to construction of the transmission line, in order to blend with the environmental development.

The timing for construction of the transmission line is dependent upon Government decision in the location of future power stations within the State, but may be as early as the mid 1990s.

Prior to the need to construct the line it will be the subject of an Environmental Impact Study. It is hoped that the above information will be of assistance to you and when the route to be adopted is determined, detailed discussions will be conducted with all affected property owners before any easement surveys are undertaken.' 34 Again there is no dispute that the plaintiff asked the defendant whether or not the contents of this letter gave her a right to rescind the contract. The defendant advised her that it did not. Expert evidence given by Mr Neville Moses, solicitor, was to the effect that the defendant should have taken the matter further in the sense the he should have sought the plaintiff's instruction to engage the services of an appropriate conveyancing counsel to advise on the matter. The defendant himself in evidence agreed that he should have. 35 It was submitted on behalf of the plaintiff that the substance of the letter was inconsistent with there being no proposal by the Electricity Commission. This would constitute a possible breach of warranties contained in the contract itself and those imposed by the Conveyancing (Vendor Disclosure and Warranty) Regulation 1986. 36 I have already set out above the commencement of regulation 5 (1) to those regulations. Sub paragraph 5 (1) (e) of the Regulation is in the following terms:- 'any proposal of the Electricity Commission to acquire any right or interest in the whole or any part of the land.' 37 On behalf of the plaintiff is was submitted there was no point in the letter unless the land was under consideration. The fact that a decision to record the proposal in the Commission's records as not yet being reached does not derogate from the fact that it was being considered for the purpose of the relevant route of transmission lines and the subsequent need to obtain relevant rights in respect of the plaintiff's land. In support for this proposition counsel for the plaintiff relied in a dissenting judgment of Kirby P, as he then was, in Copmar Holdings Pty Ltd v Commonwealth (1989) NSW ConvR 55-451. As I have said Kirby P was in dissent in Copmar. In my view the law in regard to this point is correctly stated by McClelland J in Korbol Holdings Pty Ltd v Johnson & Anor (1987) NSW ConvR 55-337. Because of the similarities between the facts in Korbol's case and this case I will set out what fell from McClelland J in detail: ……

'The evidence establishes the possibility as at 27 May 1986 of additional interest in the land by the Electricity Commission. The extent and nature of that interest appears from a letter dated 30 June 1986 from the Electricity Commission to the plaintiff's solicitors and an internal memorandum from the records of the Electricity Commission prepared as a result of an enquiry by the plaintiff's solicitors. The substantive part of the letter is in the following terms: "ARMIDALE - GRAFTON 132 kV TRANSMISSION LINE ARMIDALE - LISMORE 330 kV TRANSMISSION LINE PROPERTY CONVEYANCING ENQUIRY: KORBOL HOLDINGS PTY. LTD. FROM JOHNSON I refer to the enquiry submitted by you in respect to the proposed purchase of Lot 4 DP 705861. It is advised that a search of Commission records indicates that the property is affected by an easement for the Armidale - Grafton 132 kV Transmission Line as shown on the attached copy of DP 705861. Further, the land lies within an area under investigation for a high voltage transmission line proposed to be constructed between Armidale and Lismore. The Commission's investigation into this project will cover a wide area and will examine the alternatives that are available for accommodating the transmission line within an easement width of 60 metres. 'These investigations are of necessity detailed and time consuming and when completed an Environmental Impact Statement will be prepared showing the preferred and alternative routes for the transmission line. At the present stage of inquiry, A lot 4 is affected by one of the alternative routes. Should this route be adopted it is proposed to reconstruct the existing line and replace it with a single circuit 330 kV steel tower transmission line. However, I should like to add that the various routes under examination are not fixed and will continue to be subject to modification as the investigation proceeds. Until a determination is made pursuant to the Environmental Impact Statement, it is regretted that a more definitive reply cannot be given. It is hoped that the above information will be of assistance to you and when the route to be adopted is determined, detailed discussions will be arranged with the owners of all affected properties before any ground surveys are undertaken." The substantive part of the internal memorandum is in the following terms: "One of the alternative routes for the future 330 kV transmission line between Armidale and Lismore involves the reconstruction of the existing 132 kV transmission line affecting the above property. The route alternatives for the future transmission line are only conceptual and are subject to further investigations prior to the issuing of an E.I.S. to determine the final transmission line route. Upon the determination of the E.I.S. for the future transmission line should the reconstruction of the existing 132 kV transmission line be recommended the existing transmission line would be replaced with a single circuit 330 kV steel tower transmission line. To accommodate the future 330 kV T/L would require the existing easement width to be increased to 60 m." Clearly enough, the siting of the contemplated Armidale - Lismore 330 kV transmission line across the subject land would involve the acquisition by the Electricity Commission of a "right or interest" in part of that land. The question therefore is whether as at 27 May 1986 there was a "proposal" of the Electricity Commission to site the line across the subject land. I consider that the sense in which the expression "proposal" is used in this context is accurately described by Helsham J in D. & T. Properties v Knox (15 September 1972 unreported) as follows: "It seems to me that the word 'proposal' when used in that context means an intention which is being given force to by adoption by means of a resolution or adoption by some other process which gives the intention some operative effect." This formulation was approved and applied in Alusta Pty. Ltd. v Duncan (1973) 2 NSWLR 182, Gagliardi v Lamont (1976) Qd.R 53 and Arias v Brigden (1986) NSW ConvR 55-278. In my opinion there is no significant distinction to be drawn between "existing proposal" (which was the phrase used in the provisions under consideration in D. & T. Properties v Knox and Alusta v Duncan ) and "proposal". In my view although it is clear that as at 27 May 1986 the Electricity Commission had adopted, or given operative effect to, an intention to construct a 330 kV transmission line between Armidale and Lismore, that intention did not extend to the construction of that line on any particular site, notwithstanding that there are several possible alternative sites in contemplation. A similar conclusion was reached on similar facts in the context of a similar (but not identical) contractual provision, by Powell J in Arias v Brigden . I would respectfully apply, mutatis mutandis , to this case, the following line reasoning of his Honour in that case (at p. 56,607): "If all that one were concerned with were the question whether, at the relevant time, it was the intention of the Commission, at some time in the future, to augment the Existing State transmission grid by erecting a main transmission line between the switching station at Tomago and the substation at Taree, there could, in my view, be little doubt that such steps as had been taken reflected that here was no mere concept, but, rather, a concept in the process of being transformed into action. So to say, however, does not advance the plaintiff's cause greatly, for such an intention would be irrelevant unless it affected, or was deemed to affect, the subject land in the sense contemplated by cl. 12 and the Fourth Schedule to the agreement for sale. Since, for present purposes, the relevant intention must have been one 'to acquire any right or interest affecting any part of (the subject land)', it seems to me to follow that, as, at the relevant the relevant time, the Commission had not decided whether or not to adopt, as the route for the contemplated transmission line, that route which would, or might, involve the line traversing the subject land, the Commission had not then formed an intention which, if adopted, and given operative effect, would affect the subject land in the relevant sense." Furthermore in my opinion the plaintiff gains no additional assistance from the provisions of cl. 5(2) of the Regulation since the substance of the letter of 30 June 1986 quoted above is not in my view inconsistent with there being no proposal of the Electricity Commission of the kind stipulated in the warranty. In this regard also I would apply to this case what was said by Powell J in Arias v Brigden (at p. 56,607) in relation to a contractual stipulation substantially similar to the terms of cl. 5(2) of the Regulation.' 38 The letter received in this matter from Elcom was more indefinite in its terms than those contained in the letter which is contained in McClelland J's judgment in Korbol's case. Adopting McClelland J's reasoning I come to the view that the proposition stated by Elcom in their letter of 27th April 1989 was not a proposal but merely an investigation that they were undertaking. Accordingly, regulation 5 (1) (e) does not apply here. It follows that this part of the plaintiff's claim must also fail. 39 For the above reasons I am of the view that there should be a judgment for the defendant in the matter plus costs.

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