Tweed Shire Council v Michael Allen trading as M W Allen & Associates

Supreme Court of NSW|2009-11-11|Before: Patten AJ, Mr P

CITATION : Tweed Shire Council v Michael Allen trading as M W Allen & Associates [2009] NSWSC 1195

Woolcock Street Investments Pty Ltd v C D G Pty Ltd 216 CLR 515; Caltex Oil (Australia) Pty Ltd v The Dredge "Willemstad" (1976) 136 CLR 529; Perre v Apard Pty Ltd (1999) 198 CLR 180; CASES CITED : Minister for Immigration and Multicultural Affairs v Wang [2003] 215 CLR 518; Western District Developments Pty Ltd and Turnpike Lane Pty Limited v Baulkham Hills Shire Council [2009]NSWCA 283; State of NSW v Bovis Lead Lease Pty Ltd [2001] NSWSC 1045 and Eko Investments Pty Ltd v Austruc Constructions Ltd & Ors [2009] NSWSC 208; B & L Linings Pty Ltd & Anor v Chief Commissioner of State Revenue [2008] NSWSC 187

COUNSEL : Ms S Duggan with Mr M Seymour - Plaintiff Mr P Macfarlane - Defendant

SOLICITORS : Stacks the Law Firm - Plaintiff Bolster & Co - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Tweed Shire Council v Michael Allen t/as M W Allen & Associates

JUDGMENT 1 This was the hearing of an appeal instituted by Summons filed on 3 June 2009 against the judgment for the Defendant, Michael William Allen given following a second hearing by A C Sinclair LCM in the Local Court at Murwillumbah on 6 May last. The hearing before me was upon an Amended Summons filed 15 September 2009 and accordingly, as it seems to me, sections s 39 and 41 of the Local Court Act 2007 apply, although, if I be wrong in that view, the previous statute contains provisions which are broadly similar. 2 Before me, Ms S Duggan with Mr M Seymour appeared for Tweed Shire Council (the Council) and Mr P Macfarlane for the Defendant. The appeal on a question of law is brought as of right. The Amended Summons identified the relevant questions of law in these terms: "1. The Magistrate erred in finding that the Council was not "vulnerable" according to law. 2. The Magistrate erred in finding that the Defendant did not owe a duty of care to the Plaintiff. 3. The Magistrate erred in not finding that the Defendant did breach the duty of care to the Plaintiff. 4. The Magistrate erred in finding no additional evidence was able to be filed. 3 The evidence in the case before me comprised 2 folders of documents, exhibit A, which contained relevant material admitted with the Defendant's consent. The material revealed that the Council's local government area includes the village of Condong and that the Defendant, an engineer, was retained by the owner of land in, or in the vicinity of, the village in respect of the proposed subdivision of the land. I take a summary of the facts which led to this litigation from the learned magistrate's judgment delivered at the first hearing on 16 April 2008 (the first judgment) in which she found for the Council and entered a verdict of $40,392.51 against the Defendant: "Mr Michael Allen is a registered civil engineer. He has for many years operated a business in the Tweed Heads/Murwillumbah area. In the 1990's he was involved with the owners of land at Condong who wished to sub-divide their land into twenty residential allotments. Approval of that sub-division was initially refused by the Tweed Shire Council and subsequently approved by the Land and Environment Court. The Court's approval included conditions that had been formulated by the Council. On 7 August 1997 the Council approved the sub-division. In 1998 Councill was provided with a certificate signed by Mr Allen that the civil engineering works associated with the sub-division were in compliance with the development conditions and standards imposed on the Development Consent for the sub-division. The Council contends that the Consent referred the developer to the Development Control Plan 16 and to Australian Standards AS3798-1990 and AS 1726-1993. The Council further contends that Mr Allen was in breach of these provisions in that he did not conduct himself geo-technical testing or retain an appropriate expert prior to construction. This resulted in the infrastructure, which vested in the Council on registration of the subdivision, being built on soft alluvial soils. These soils were an inappropriate base for such improvements and have led to subsidence. The subsidence has cause damage to Council infrastructure the most significant being the ponding of stormwater within a cul-de-sac within the sub-division. The Council has carried out remedial works. Mr Allen contends that the conditions of approval did not require geo-technical testing and that he as a civil engineer complied with his professional responsibilities. He further contends that there was no relationship between himself and the Council, which would created any obligation to the Council on his part, nor any right to damages on the Council's part. 4 In the first judgment, the Magistrate noted the agreement of the parties that the case was one of "pure economic loss" and that: In order to succeed in its claim the Council must establish on the balance of probabilities that Mr Allen owed the Council a duty of care, that he breached this duty and that the Council suffered damage." 5 She cited as "the most recent case" Woolcock Street Investments Pty Ltd v C D G Pty Ltd 216 CLR 515. She also referred to Caltex Oil (Australia) Pty Ltd v The Dredge "Willemstad" (1976) 136 CLR 529 and Perre v Apard Pty Ltd (1999) 198 CLR 180 and observed "the vulnerability of the plaintiff has emerged as an important requirement in cases where a duty of care to avoid economic loss has been held to have been owed". 6 However, she distinguished the facts in Woolcock and held that the Defendant "owed a duty of care to the landowner to avoid economic loss" before proceeding to deal with the various elements which the High Court indicated would be relevant to the determination of that issue. She held that there was no disconformity of duty; that there was foreseeability of loss; that indeterminancy of liability did not in the circumstances of the case create a difficulty; that following what McHugh J said in Woolcock the "autonomy of the individual" was not a relevant factor in considering this type of claim and that the Defendant was, or should have been, aware of the magnitude of the risk likely to result from his negligence. 7 In relation to the issue of "vulnerability" the learned Magistrate said: "On the issue of vulnerability the majority in the Woolcock case were of the view that the facts in that case did not show that the appellant could not have protected itself against the economic loss it alleges it suffered. For example, a provision or warranty could have been asserted into the contract for sale or inspections could have been undertaken prior to contract. Again this case is factually different from the Woolcock case. Most importantly there was no 'sale" to the council and the usual conveyancing protections were not available. There was no opportunity for the Council to draft warranties into any contract for sale. The infrastructure vested in the Council on registration of the sub-division. To protect itself in relation to geotechnical issues the Council required a certificate of construction be filed with the application for registration. In this case the certificate was signed by Mr Allen. To require the Council to conduct its own geotechnical tests and enquiries would make the certificate redundant. The evidence of Mr Musgrave was to the effect that the Council did not have the resources to undertake these tests and enquiries in relation to every sub-division. Mr Allen knew that the infrastructure was to vest in the Council on registration and that the filing of the Certificate was a necessary pre-requisite to registration. I am satisfied that the requirement for the certificate and the vesting of the infrastructure in Council satisfies the requirement that the Council was "vulnerable" within the terms of the Caltex case and Perre v Apand Pty Ltd." …………………….. The Court's view is that in this case the Council was in a different position to that of a first owner or purchase. It did not have the conveyancing protections of a purchaser, the infrastructure vested in the Council upon registration of the sub-division. Council was not acquiring the infrastructure to make money, but rather to discharge its public duty to provide and maintain services. To protect itself from incurring economic loss of this type the Council could have engaged sufficient experts to conduct the geotechnical testing themselves. The Council contends that to do so was not economically viable. The Council therefore required the filing of a certificate that all the requirements had been complied with prior to registration. Mr Allen provided that certificate. As discussed in relation to the majority judgment the Court is satisfied that these facts make out the requirement for vulnerability." 8 The Magistrate concluded her first judgment on the issue of liability with this paragraph: "I do not agree that the Council had to specifically request geotechnical testing before it was appropriate for the relevant expert, in this case the civil engineer, to undertake such testing. That is why experts are retained. Mr Allen was persuaded by his knowledge of the area and other developments undertaken nearby to form the view that geotechnical testing was not required. He was aware that the course of a river could alter over time. There is no evidence as to whether or not any testing was undertaken on the neighbouring developments. Mr Allen could not have known the condition of the subsoils whereas this was easily ascertainable by way of geotechnical testing. I am satisfied that in not undertaking the geotechnical testing Mr Allen was in breach of his professional obligations." 9 The defendant appealed to this Court against the first judgment and that appeal was heard by Malpass AsJ. 10 It is, I think, relevant to have regard to the manner in which the appeal was conducted before his Honour as demonstrated by the following extracts from the transcript: "Macfarlane (For Mr Allen): Yes, your Honour. This is in one sense a narrow appeal. There is one appeal ground and that appeal ground is that --- His Honour: It is whether she applied the right test and I suppose took into account all the relevant circumstances? Macfarlane: Yes Your Honour. From the outset, the question turns on vulnerability. I will take your Honour to the cases on vulnerability in a moment. Can I say this, that the reasoning of her Honour in applying vulnerability, in my submission, fell into error, firstly because her Honour did not take into account the extent of the council being involved in the rezoning application, the actual rezoning and then the process leading up to subdivision. In my submission the involvement of the Council in the rezoning process and the subdivision process is of crucial importance to understand whether or not, or to approach the question of whether the council was vulnerable vis-à-vis, the appellant engineer. The reason I make that submission is because the land the case involves was a piece of land, as at 1990, which was zoned agricultural protection. The owners of the land were Mr and Mrs Visio and Mr and Mrs Visio wished to subdivide that land and engaged the appellant to make submission to the council to seek to persuade council that the land should be rezoned from agricultural protection to urban expansion, and once that rezoning took place, then the subdivision application could follow, which it did. From the outset, the submission is, in relation to her Honour's reasoning on vulnerability, that there was inadequate attention given to the involvement of council as to the rezoning. I will take your Honour to the evidence which demonstrated the council's involvement in the rezoning process in a moment. ……………………………… Macfarlane: Yes. The case in negligence against the appellant was that the appellant should have engaged geotechnical investigations to test whether or not there were soft alluvial clays, which were present under the land that the roads were built on. So what happened - as I understand it the facts in this sense are not controversial - is that the roads were constructed as part of the subdivision in 1997/98, two cul-de-sacs in fact. There were no geotechnical investigations into the land underneath those roads but there were geotechnical investigations into the compaction of the fill in the roads, but not underneath that compaction, and a case of negligence against my client below was that when he signed those certificates, what he should have done was either test himself or engaged others to test whether the soil underneath the compaction had soft alluvial clays. As I go through the evidence of the rezoning and the subdivision process, your Honour will see that not only were the council required to turn their own minds to the question of whether geotechnical investigations were required - they did not do that, and they were able to do that. Your Honour should be thinking that it is significant to challenge the finding of negligence but my submission is that that is seeking to demonstrate that the council was able to take steps to protect itself, which is the touchstone of the vulnerability question. His Honour: Is there common ground as to the question of whether or not this certificate deals with the subject matter of the soft soil? Macfarlane: From the appellant's point of view the certificate did not address geotechnical investigations and it was not required to, and my friend's case below was that the certificate should have, as I understand it."

11 The judgment of Malpass AsJ was delivered on 12 September 2008. After referring to the facts his Honour quoted the following passage from the judgment of the majority in Woolcock: "Since Caltex Oil , and most notably in Perre v Apand Pty Ltd , the vulnerability of the plaintiff has emerged as an important requirement in cases where a duty of care to avoid economic loss has been held to have been owed. "Vulnerability", in this context, is not to be understood as meaning only that the plaintiff was likely to suffer damage if reasonable care was not taken. Rather, "vulnerability" is to be understood as a reference to the plaintiff's inability to protect itself from the consequences of a defendant's want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant. So, in Perre , the plaintiffs could do nothing to protect themselves from the economic consequences to them of the defendant's negligence in sowing a crop which caused the quarantining of the plaintiffs' land. In Hill v Van Erp , the intended beneficiary depended entirely upon the solicitor performing the client's retainer properly and the beneficiary could do nothing to ensure that this was done. But in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords , the financier could itself have made inquiries about the financial position of the company to which it was to lend money, rather than depend upon the auditor's certification of the accounts of the company." 12 The judgment of Malpass AsJ continued: "Accordingly, (the Council) could only succeed in its claim if it could demonstrate vulnerability on its part. The Local Court found that certain facts made out the requirement for vulnerability. Generally speaking, the one issue ventilated by the plaintiff is that the Magistrate both applied the wrong test and failed to address all of the relevant circumstances in approaching her task in dealing with the matter of vulnerability. In my view, the contentions of the plaintiff are well founded." 13 Later in the judgment his Honour quoted from the first judgment the passages which I have set out in paragraph 7 above. 14 In the outcome his Honour concluded that the Magistrate had erred in law: "It seems to me to be erroneous to approach the test of vulnerability in the manner adopted by the Magistrate. Each case has to be considered having regard to its own particular facts. This case falls into a different category to those involving a first owner or a purchaser of land. The question to be addressed is that of the relative inability of a plaintiff to protect itself from the economic loss. The cases seem to have regard to matters of ignorance or social, political or economic constraints that render a plaintiff unable to protect itself. The context of this case was that the plaintiff was an applicant and the defendant was the relevant local government authority. There had been involvement for some years concerning the processes of rezoning and subdivision. The role of the defendant required it to consider, inter alia, matters such as flooding and subsidence affecting the land. It seems to me that, in addressing the matter of its vulnerability, the Magistrate should have had regard to what the defendant could have done to protect itself against the economic loss claimed by it. Without intending to be exhaustive I will mention certain matters. There may have been inquiries or investigations that could have been made. There may have been steps that could have been taken to bring about testing at the expense of the plaintiff (or the owners). In my view, the Magistrate has erroneously applied the test of vulnerability and has not taken into account all of the relevant circumstances." 15 Malpass AsJ made these orders: "The judgment and orders of the Local Court are set aside. The matter is remitted back to the Local Court for determination according to law." 16 Magistrate Sinclair thereupon conducted a further oral hearing and received written submissions from the parties. She published her second judgment on 6 May 2009, which commenced :

"This matter has been returned to the Local Court following a determination in the Supreme Court. Associate Justice Malpass ruled that the Local Court erred in addressing the matter of the Plaintiff's vulnerability in that "the Magistrate should have had regard to what the Defendant could have done to protect itself against the economic loss claimed by it." The Associate Justice provided examples of matters, which could have been undertaken by the Plaintiff and remitted the case to this Court to be determined according to law. It has been agreed throughout by the parties that the claim was one of "pure economic loss" and that the authorities on that point applied to this case. ISSUES; The issue for determination is whether the Plaintiff has established on the balance of probabilities that it was "vulnerable" to the risk in the terms of the decision in the Woolcock Case. The cases of Perre and Apand and the Woolcock case clearly set out what is meant by "vulnerable" in such cases. It is for this Court to apply that principle or definition to the facts of the present case." 17 Thereafter, in the second judgment, her Honour confined herself to the issue of vulnerability. After summarising the submissions on behalf of both the plaintiff and the defendant, she expressed this conclusion: "Having reviewed the evidence, the submissions, the decision of Associate Justice Malpass and the decisions in the Woolcock case and Perre v Apand, the Court makes the following findings: The Council could have protected its position by i) as the consent authority requiring conditions be met as to the geotechnical testing of the land at least at the time of the approval of the sub-division by the Land and Environment Court or ii) by requiring appropriate testing not at the expense of the Council or iii) by instituting a system whereby more significant applications were investigated by the Council itself. As those steps could have been taken well before the Certificates were produced they could not be said to have induced the Council not to protect itself. The Council was not therefore "vulnerable" in the relevant sense and accordingly the Council has not made out its claim." 18 Following this conclusion, her Honour entered a verdict for the Defendant. 19 Essentially the submissions made on behalf of the Council were that the Magistrate erred in law by narrowing, in the second judgment, the issue before her to the single question of vulnerability. Instead, it was submitted, her task was to evaluate the whole of the evidence and determine upon that evidence viewed in the light of the judgment of Malpass AsJ whether the Defendant owed a duty of care to the Council. 20 There is authority that absent a specific direction, a court bound by an order for remittal, such as occurred in this case, is bound to consider the entirety of the matter and Minister for Immigration and Multicultural Affairs v Wang [2003] 215 CLR 518 provides an illustration of this principle in a way which is apposite to this case. The Full Court of the Federal Court in remitting a matter for rehearing by the Refugee Review Tribunal ordered that the Tribunal be as previously constituted in order that the applicant might preserve favourable findings of fact. On appeal to the High Court, Gleeson CJ observed: "It is clear that the reason for the order finally made by the Full Court was a view that the interests of justice required that the respondent should be protected as far as possible from the contingency that, on the hearing of the remitted matter, the Tribunal might take a view of the facts less favourable to the respondent than had been taken by Ms Boland.

The content of the interests of justice, in the events that occurred, is to be determined in the light of the provisions of the Act , pursuant to which the respondent made his application for a protection visa, and pursuant to which the delegate of the Minister, the Tribunal, and the Federal Court were acting. Under the statutory scheme, and in consequence of the other orders made by the Full Court, the Tribunal is now obliged to undertake a further review of the delegate's decision. The Tribunal's decision upon that review is to be made on the basis of the facts as they appear in the course of that review. To what extent the information before the Tribunal will differ from the information that was originally before Ms Boland is not known. The findings made by Ms Boland will have no legal status in that further review. Neither Ms Boland, if she undertakes the further review, nor any other member of the Tribunal, if the Tribunal is differently constituted, will be bound by them. The most that can be said is that, as a practical matter, if Ms Boland undertakes the review, then, unless there is a significant change in the information before the Tribunal, she is unlikely to alter the view of the facts she took previously, whereas a fresh decision-maker might see the matter differently even if the information remains substantially the same. If that be regarded properly as a risk, does justice require that the respondent be protected from it?

It is tempting, but dangerous, to seek analogies in the field of adversarial litigation. An appeal court, pursuant to statutory power, may order a re-trial limited to particular issues. But where the issues on a re-trial are at large, it would come as a surprise to see a court of appeal order a re-trial before a particular judge for the reason that the judge is thought to be more, or less, likely than others to resolve the issues in a particular fashion. The Full Court, having set aside the Tribunal's decision, appears to have contemplated that the further hearing would in some way be limited, but it made no order to that effect; it attempted to achieve the same practical result by indirect means. Whether it could have achieved the intended result by making different orders, or giving different directions, is not a matter that arises for decision.

Proceedings before the Tribunal are not adversarial. No issues are joined. There is an ultimate question to be answered, and a statutory consequence attaching to the answer to that question. The question is whether the Tribunal is, or is not, satisfied of the matters set out in s 65 of the Act which, in the case of the respondent, concern his claim that he has a well-founded fear of being persecuted for reasons of religion. That state of satisfaction must exist at the time of the decision following the hearing of the remitted matter, and must be formed on the basis of all the information before the Tribunal at that time. Justice requires that the respondent's claim be considered fairly, and on its substantial merits. It does not require that the hearing be conducted on the basis that any favourable findings of fact, made in the course of the decision that was set aside by the Full Court, be somehow preserved for his benefit. Nor does it require the selection, if possible, of a decision-maker who has already shown herself to be willing to accept parts of the respondent's case. Fairness to a person seeking a visa may require that, in a given case, he or she be protected against the possibility, or the appearance, of adverse pre-judgment. It does not require protection against the risk that open-minded judgment will result in a view of certain facts less favourable than that of an earlier decision-maker whose decision has been set aside completely." 21 Although Gleeson CJ was referring to an administrative tribunal, in my opinion, much of what he said is applicable to this case. There was no limitation in the order made by Malpass AsJ and it was certainly not implicit in his Honour's order that any rehearing be necessarily conducted by Magistrate Sinclair. The matter was entirely at large and the case could have been reheard by any Local Court Magistrate. It would, accordingly, in my opinion, have been an error of law for Magistrate Sinclair (or any other Magistrate) to have regarded herself or himself bound by any previous finding.

22 It was contended on behalf of the Council, in effect, that the case before the Magistrate at the second hearing was not concluded by her finding that the Council was not vulnerable. In my view, that proposition is correct, consistently with Woolcock and cases which have followed it, including Western District Developments Pty Ltd and Turnpike Lane Pty Limited v Baulkham Hills Shire Council [2009]NSWCA 283 where Giles JA said: "10 Absence of vulnerability as found by the Magistrate was not a fact, but a conclusion by way of characterisation drawn from facts such as the fact that the applicants were corporations and the fact that the applicants were experienced property developers and could have made enquiries. The appeal was not in relation to the findings as to those facts, but in relation to the conclusion that the applicants were not vulnerable, and for the reasons given by Preston CJ of LEC the Magistrate erred in law in coming to the conclusion.

Further, while vulnerability is an important factor in whether or not a duty of care to guard against economic loss is owed, it is not the sole consideration. On current jurisprudence, the decision that a duty of care is owed or is not owed is arrived at in novel circumstances upon a "multi-factorial" approach, with a close analysis of the facts bearing on the relationship between the plaintiff and the defendant and regard to "salient features"; see most recently Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258 at [101]-[108] per Allsop P. The Magistrate's decision could not, on the correct approach, be solely by regard to vulnerability. His decision that a duty of care was not owed involved (or should have involved) assessment of all salient features, only one (although a primary one) of which was vulnerability. If the decision was erroneous, it was erroneous in point of law although involving a factual finding that the applicants were corporations and the other factual findings."

23 The decisions in both Western Districts and Caltex Refineries (Qld) Ltd v Stavar were, I hasten to add, both given after the decision of Malpass AsJ. Moreover, Caltex was not a case of pure economic loss but rather one of personal injury in a "novel category" 24 It was also submitted on behalf of the Council that the Magistrate's finding that the Council could protect itself against economic loss was unreasonable and could not be sustained. To the contrary, it was submitted that the Council was vulnerable, in that it was reliant on the skills and expertise of the Defendant to properly supervise the construction of what were only to become public roads on their vesting in the council. "Vulnerability" is, as pointed out by Giles JA in the above quoted passage from Western Districts, a characteristic to be drawn from facts. 25 In "preliminary" written submissions, the Defendant contended that the challenge by the Council to the Magistrate's finding regarding vulnerability involved a mixed question of fact and law for which leave was required but not sought. I disagree with this submission, being of the opinion that it is no more than a question of fact, but, as it seems to me, whether or not the Magistrate was correct in her finding as to vulnerability is not, and cannot be, the issue before me.

26 Second, it was submitted that the Council now seeks to depart from the way it conducted its case at trial. I do not think that occurred in this case, although it is true that for the most part submissions at the hearing on 8 April 2009 were very much focused on the question of vulnerability. But that, in my opinion, did not avoid the obligation of the Magistrate to make manifest in her judgment that she was deciding whether or not there was a duty of care and that she considered "vulnerability", important as it may be, as one only of the elements to be considered in a "multi factorial" approach. Indeed, the opening paragraphs of her Honour's judgment suggest that she did not approach the matter in this way. 27 The third "preliminary" submission was that this appeal constitutes a collateral attack on the judgment of Malpass AsJ. I do not think this is so. His decision bound the Magistrate in relation to the approach to be taken in addressing the vulnerability question and that is not in question in this appeal. However, so far as his Honour suggested that "the council could only succeed in its claim if it could establish vulnerability on its part", that statement should be regarded as obiter. It is contrary, in my view, to what was said in Woolcock and subsequent cases as made manifest by the passage quoted above from the judgment of Giles JA in Western Districts. 28 In other submissions, counsel for the Defendant contended that it was implicit in the Magistrate's second judgment that she did, indeed, find that the Defendant did not owe the Council a duty of care, even though her only formal finding was that the Council was not vulnerable. It was submitted that the finding of non vulnerability was open to the Magistrate on the evidence and there was reference to cases such as State of NSW v Bovis Lead Lease Pty Ltd [2001] NSWSC 1045 and Eko Investments Pty Ltd v Austruc Constructions Ltd & Ors [2009] NSWSC 208. 29 The question before me is whether the Magistrate erred in law. Regretfully, I think she did, by apparently restricting her second judgment solely to the issue of vulnerability rather than to a consideration of whether, on all the evidence in the case, the Council established a duty of care owed by the Defendant and a breach of that duty. I observe, incidentally, that whilst the Magistrate found that the Council "could" have protected its position in certain ways, she was entitled, in my opinion, to consider whether it would have been reasonable for it to do so, having regard to all the circumstances, including the Magistrate's own findings under the heading "Vulnerability" in the first judgment. 30 Preston CJ of LEC with whom Giles JA and Campbell JA agreed addressed the concept of reasonableness and reliance in Western Districts at paragraph 104: "Fourthly, it is not reasonable to require the applicants as prospective purchasers to take steps to check whether the Council had properly or improperly exercised the statutory power to issue the subdivision certificate. The applicants were entitled to assume that if the Council as principal certifying authority exercises the statutory power to issue the subdivision certificate, it has satisfied itself that all of the applicable requirements in s 109J(1) and (2) have in fact been complied with.

The Associate Judge's reason for concluding that the applicants were not vulnerable was similarly that the applicants could have made inquiries of the Corporation whether a s73 certificate of compliance had been issued with respect to the property prior to settlement of the conditional contract and could have checked if the answer to the requisition given by Wati was correct. This reason also misapprehends the relevant legal principle." 31 It was submitted on behalf of the Council that if the appeal were upheld, it would be open to this Court to substitute a verdict for the Plaintiff for the verdict for the Defendant entered by the Magistrate. However, I do not think that course is open to me (see for instance B & L Linings Pty Ltd & Anor v Chief Commissioner of State Revenue [2008] NSWSC 187). Unfortunately, the matter will need to be returned to the Local Court for rehearing as this court is not entitled to embark upon the further fact finding which the case requires. I say, unfortunately, being mindful of the fact that costs already incurred are probably disproportionate to the amount at stake. It will be a matter for the administration of the court as to whether the rehearing takes place before the same or a different Magistrate. Hopefully, the parties will reach agreement for the conduct of the new trial at minimum expense. 32 I make these orders; 1. The appeal is upheld. 2. I quash the verdict entered in the Local Court on 6 May 2009. 3. I remit the matter for rehearing in the Local Court on the issues only of whether the Defendant owed a duty of care to the council and, if so, whether there was a breach of that duty. 4. I order the Defendant to pay the Council's costs. 5. The Defendant is granted a certificate under the Suitors Fund Act. 6. Exhibit may be returned. 7. The costs of the earlier hearings should abide the result of the further hearing and should be dealt with by the Magistrate presiding at that hearing.

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Cases Cited (6)