Via Sanantonio Pty Limited v Walker Corporation Pty Limited & Anor

CATCHWORDS : [REFEREES] - Adoption of Report - Whether Referees' applied inappropriate test - Whether Referees' erred in rejecting expert evidence

Degiorgio v Dunn (No 2) (2005) 62 NSWLR 284 CASES CITED : Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 Via Sanantonio v Walker Corporation [2009] NSWSC 679

PARTIES : Via Sanantanio Pty Limited (Plaintiff) Walker Corporation Pty Limited (First Defendant)

COUNSEL : JA Arnott (Plaintiff) JB Simpkins SC/FP Hicks (First Defendant)

SOLICITORS : Morgan Lewis (Plaintiff) Colin Biggers & Paisley (First Defendant)

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

50192 OF 2006 VIA SANANTONIO PTY LIMITED v WALKER CORPORATION PTY LIMITED & ANOR JUDGMENT 1 By proceedings commenced on 5 December 2006 the plaintiff, Via Sanantonio Pty Limited, claimed an interest in certain option deeds held by the first defendant, Walker Corporation Pty Limited (the defendant). The claims arose out of a proposed development of land at Coonarr Beach, Queensland (the Land). The principal of the first defendant was joined as second defendant but no orders were made against him in the proceedings. The proceedings were settled on 4 February 2008 when orders were made by consent which included a declaration that the defendant held the Land on constructive trust as to one half for the plaintiff. 2 The settlement regime included provision for the plaintiff to pay the defendant 50% of the proper and reasonable costs incurred, or to be incurred, in seeking or obtaining any development approvals and re-zoning with respect to the Land. The settlement regime also included provision that in default of agreement in relation to the amount of the proper and reasonable costs, there would be an inquiry held by an Associate Judge. 3 The parties were not able to reach agreement in respect of those costs and on 5 September 2008 the parties agreed to refer certain issues to two Referees rather than pursue the inquiry before the Associate Judge. The orders made by consent on 5 September 2008 referred the determination of the quantum of "all proper and reasonable costs incurred, or to be incurred, by the first defendant in respect of the said Option Deeds, and seeking or obtaining any development approvals and re-zoning with respect to the lots" to two Referees, Ms S Duggan and Mr C Catt (the Referees). 4 The Referees delivered their report to the Court on 27 April 2009 (the first report). On 19 June 2009 McDougall J heard competing Notices of Motion in which the plaintiff sought the rejection in whole, or in part, of the first report and the defendants sought the adoption of the first report. 5 McDougall J held that the Referees did not deal with the submission that the first development application submitted by the defendant was "doomed to fail". His Honour noted that the plaintiff wished to submit to the Referees that the costs incurred in respect of that first application could not be said to be proper and reasonable costs of seeking or obtaining development approval: Via Sanantonio v Walker Corporation [2009] NSWSC 679 at [4]-[5]. 6 On 19 June 2009 orders were made remitting the matter to the Referees to consider and report further upon the following questions:

(i) Whether: (a) the first development application lodged by the first defendant in September 2006; and (b) the work performed by the first defendant between September 2006 and January 2007 in respect of the proposed re-zoning or development of the site had so little prospects of success such that the costs incurred in relation to it were not "proper and reasonable costs of seeking or obtaining any development approvals and re-zoning with respect to the Lots "; (ii) To the extent that any of the costs identified in paragraph (i) above are found not to have been reasonably and properly incurred, the quantum of those costs. 7 The further reference occurred on 25 and 26 August 2009. The Referees delivered their further report to the Court on 12 October 2009 (the Report).

Expert evidence 8 During the reference hearing the plaintiff sought to read an affidavit of John Brannock, a town planner and a director of Brannock & Associates Pty Limited, Planning and Environment Consultants. Mr Brannock's experience included working as a City Planner for the Ipswich City Council from July 1977 to February 1988 where he established Queensland's largest provincial planning team in a Council. From February 1988 to the present time Mr Brannock has worked as a planning and environment consultant. 9 The plaintiff retained Mr Brannock by letter dated 9 July 2009 with a request to: (1) confirm that he had been provided with a copy of the expert code of conduct and that he had read it and agreed to be bound by it; (2) give his opinion on whether the first development application for approximately 2,500 dwellings had "any prospect of being approved with the then existing zoning of the optioned land"; and (3) give his opinion on what the reasonable costs would be in preparing the first development application. 10 Mr Brannock provided his report on 30 July 2009 (the report). The Introduction of the report recorded that it addresses planning considerations relating to two questions being: (1) the type of development that could have been undertaken in terms of the existing zoning of the optioned land; and (2) whether the application for Preliminary Approval to Override the Planning Scheme, pursuant to Section 3.1.6 of the Integrated Planning Act 1997 (Qld), submitted to the Burnett Shire Council in September 2006 on behalf of Walker Corporation, had prospects of success: [1.3]. The report outlined the background to the Application including correspondence from the defendant to the relevant Department in September 2005 requesting that the subject land be designated as "Future Urban" in the new Draft Planning Scheme. At that stage the land was designated "Rural Protected" and "Environmental Protection" under the relevant Council's 1997 Land Use Strategic Plan. 11 The report also included the Department's response to the defendant on 11 October 2005 which included the following:

… a reasonable level of confidence that these areas are suitable for future urban purposes would need to be demonstrated before the Department would be prepared to support such a designation. This level of confidence would include that the land is consistent with a comprehensive growth strategy for the Shire, the land is physically suitable for urban development and services and infrastructure can be efficiently supplied to the site.

It would therefore be very difficult to support a "Future Urban" designation as you propose, when it is not in the context of a comprehensive growth management strategy. It may be, for example, that regional growth is more appropriately accommodated around Bundaberg or between Bundaberg and the Burnett coast than at Coonarr Beach.

… in respect of urban development at Coonarr Beach, I understand you have met with Department officers in Bundaberg who advised development of this land is not supported by the existing transitional planning scheme, the future IPA planning scheme, the Wide Bay Regional Growth Management Framework (WB 2020 RGMF) or the State Coastal Management Plan (SCMP). I wish to confirm this advice. These planning documents support consolidation of future growth around existing urban settlements. 12 On 3 November 2006 the Application was identified as "impact assessable" and subject to referral coordination by the Department. 13 At the time that Mr Brannock provided his report, the application had been neither approved nor refused. However a substantial Referral Coordination Information Request was issued by the Department on 30 January 2007 listing 161 items on which additional information was requested from the Burnett Shire Council and various referral agencies. The Response to the Information Request was lodged with Council on 12 July 2007. 14 Mr Brannock also included the following in his report:

3.1.9 On 18 October 2007, the Department of Main Roads provided its concurrence agency response on the application requiring that Council refuse the application.

3.1.10 On 26 September 2007, the DLGPSR provided its advice agency response recommending refusal of the application.

3.1.11 On 19 October 2007, the Environmental Protection Agency provided its concurrence agency response, refusing the application. 15 Chapter 4 of the report noted that the Application triggered Referral Coordination by the Department to various entities being: Department of Natural Resources & Water, Environmental Protection Agency (EPA); Department of Main Roads; Department of Primary Industries & Fisheries; and Queensland Transport. It was noted that Third Party Advice was also invited from various other departments. Chapter 4 also dealt with the defendants' grounds justifying the application [4.4]. 16 Chapter 5 of the report was entitled "Statutory Planning Provisions". The first section of the chapter dealt with the Integrated Planning Act which concluded as follows:

5.1.6 However, section 3.5.11(4) of IPA requires that:

(4) If a concurrence agency response has stated that the application must be refused, the assessment manager must refuse the application.

Although the development application has not yet been decided by the Burnett Shire Council as assessment manager, it is evident that it would have to be refused if any of the concurrence agencies were to refuse the application. The Department of Main Roads and the Environmental Protection Agency have provided their concurrence agency responses on the application (on 18 and 19 October 2007 respectively) requiring that it be refused. The responses of other concurrence agencies are not known, nor whether or not the applicant sought to make representations to DMR and the EPA to change their decisions. 17 The balance of the chapter dealt with other statutes including the Vegetation Management Act 1999 (Qld); Environmental Protection Act 1994 (Qld); and Coastal Protection and Management Act 1995 (Qld). The chapter also included analysis of the State Coastal Management Plan; State Planning Policy 1/92 - Development & the Conservation of Agriculture Land; State Planing Policy 2/02 - Planning & Managing Development involving Acid, Sulfate Soils; and the Draft Wide Bay Burnett Regional Plan 2007-2026. 18 Chapter 6 was devoted to the Burnett Shire Planning Scheme and included the following:

6.3.4 The proposed development is inconsistent with the Rural Planning Area Code and Rural Zone Code as it fails to achieve the planning intent for the Rural Zone and Rural Planning Area as defined in the overall outcomes of the codes. The applicant has also not adequately demonstrated why no other location is suitable, nor how the proposed development would provide a significant and direct community benefit that could not be achieved through the further consolidation of urban development around existing settlements. 19 Paragraph 6.4.2 included the following:

The proposed development is not consistent with the planning intent of the Natural Features or Resources Overlay Code as defined in the overall outcomes as it proposes a substantial residential community in a location that is recognised as being of state environmental significance, classified as being of high agricultural value, identified as a Sea Turtle Sensitive Area and partially subject to bushfire risk and storm tide inundation. 20 The report also referred to the conclusion reached by the Department of Main Roads that the defendant had not provided sufficient information on the impacts of the development on the state-controlled road network, or how those impacts would be mitigated. The report noted that the DMR "required that Council refuse the application": [6.5.5]. 21 Chapter 7, "Town Planning Opinion", included the following:

7.1.6 In my opinion, the proposed use of the site would have little chance of success under the planning provisions of the Rural Zone and Rural Planning Area, particularly in light of the significant site constraints as identified in the planning scheme overlay maps and environmental mapping undertaking by state agencies.

7.1.7 Furthermore, it is noted that Planning Scheme Table 4.3 identifies a Resort Hotel as an impact assessable (not inconsistent) use in the Rural Zone.

7.1.8 In my opinion, it appears that, were the applicant able to convince the authorities that the subject land is not GQAL Class A, a development application for a Resort Hotel could have had a greater chance of success under the Rural Zoning than the proposed development for a non-tourist, residential master planned community which included commercial uses other that (sic) home-based businesses. A Resort Hotel could be more readily justified as contributing to the economic base in terms of tourism, and is unlikely to raise the same level of concern in relation to access to employment and community services, as was the case for the proposed development of a substantial residential community in this location. Furthermore a Resort Hotel would have a smaller development footprint and thus less impact on ecological values on the site than a master planning community. 22 Paragraph 7.3.4. included the following: It is therefore my opinion that the preparation and lodgement of the subject development application was ambitious and carried with it a high level of risk of refusal. I believe that this should have been evident to the Walker Corporation prior to the preparation and lodgement of the DA.

However, this position (of the relevant authorities) was again confirmed through the extensive list of issues raised in the Referral Coordination Information Request. Again, it is my opinion, that the strong likelihood of a refusal should have been evident at that stage of the application, at which the Walker Corporation elected to proceed in preparing the Response to the Information Request. 23 Chapter 8 entitled "Conclusion" included the following:

8.4 In my opinion, the application in relation to the optioned land for Preliminary Approval to Override the Planning Scheme, pursuant to section 3.1.6 of the Integrated Planning Act 1997, submitted to the Burnett Shire Council in September 2006 on behalf of Walker Corporation, had very little prospect of success. Inadmissibility ruling 24 The defendant objected to the evidence of Mr Brannock. The Referees rejected the report on the following basis (tr 580-581):

In light of the timing, I can give you short reasons. If either party requires further detailed submissions, they can make a request of us and we can produce them in due course.

In respect of the objection, we requested that VSA formulate in terms what the test was that VSA said was the relevant test for the purposes of a determination of the question which is the subject of the reference, and Mr Arnott did so. In light of the question as formulated we are of the opinion that Professor Brannock, for the purposes of the preparation of report, was not provided with all relevant information from which he would be required to prepare evidence that would assist us in the determination of those questions, and to the extent that he was provided with information, he was provided with information which is irrelevant to the determination of those questions.

We also have formed the opinion that the report is one that has been framed as such that the opinions expressed therein are unable to be properly understood as to what matters were taken into account and what matters were not taken into account, such that it offends the principles espoused in Makita v ( sic ) Cadbury Schweppes, such that one could not excise the irrelevant material and the report be one that was of assistance.

We are also not satisfied that Professor Brannock has sufficiently particularised a particular area of qualifications or experience, such that his opinion would assist us in the determination of the question as framed by Mr Arnott.

We are also of the opinion that if we ignore the Makita objection, namely, qualifications and the formulation of the report, that the opinions expressed by Professor Brannock on the material provided to him is of so little weight in determining the questions formulated by Mr Arnott that it would be of no probative value, and we would reject it on that basis.

The Report 25 After tracing the procedural history between the parties, the Referees addressed the expression "had so little prospects of success" in the orders of 19 June 2009. The Report includes the following [footnotes omitted]:

Our conclusions on the appropriate standard (and onus)

In our opinion, the appropriate standard expressed by the phrase "had so little prospects of success" sits between the standards propounded by the parties. We do not accept that the appropriate standard is "likely to be approved" - in the sense of a likelihood of success greater than 50 per cent - as this sets the bar far higher than what VSA argued before McDougall J and appears to us to be inconsistent with the words "so little" that were used by the parties in the Short Minutes.

However, we do not accept that "so little prospects of success" means "doomed to fail or manifestly hopeless" - for example, because there was no statutory capacity for approval - as was submitted by Walker. These phrases, and analogous ones such as " lacking in substance ", " absolutely hopeless " and " so clearly untenable that it cannot possible succeed ", are used in strike out motions and suggest a standard of a remote possibility of success: which in the context of the questions referred back to us would be too low.

The term "likely" has been a subject of judicial consideration in the context of environmental assessment of endangered species and in that context is generally accepted as meaning:

Likely : a real chance or possibility. It does not mean more likely than not; but is more than a mere possibility: Jarasius v Forestry Commission (1988) 71 LGERA at 94; Central West Environment Council Inc v Orange City Council & another (2003) 128 LGERA 169; Oshlack v Richmond River Council (1933) 82 LGERA 222 at 233.

In our opinion there is nothing in the terms of the contract from which this dispute arises; the circumstances of this case and the questions it involves; or in the terms of our reference which would warrant the taking of a different approach to the meaning of such a term.

Accordingly, we consider that the first application would have "so little prospects of success" if the application had no reasonable prospects of success, and: (a) the question whether or not the first application had no reasonable prospects of success turns on whether Walker held a reasonable belief that the provable facts and a reasonably arguable view of the law meant that their prospects of obtaining the development approval from the assessment manager was "fairly arguable"; and (b) the question whether Walker believed that they had material which objectively justified proceeding with the application turns on whether or not that belief " unquestionably fell outside the range of views which could reasonably be entertained "; and (c) the work, services and the costs incurred thereby would be "unreasonable" if it was out of all proportion to the achievement of the commercial objective or to the benefit to be obtained therefrom: Brewarrina Shire Council v Beckhaus Civil Pty Limited [2006] NSWCA 361 at [89].

We accept the written submission of VSA that " the objective belief of Walker is not determinative of whether the costs incurred were proper and reasonable " (our emphasis).

However, we do not consider that the objective belief of Walker would be irrelevant. It seems to us that the objective belief of Walker as to the prospects of success is what we are required to determine and then test for reasonableness on the basis of the material we were taken to. In this context whilst we refer to the objective belief of Walker we appreciate that we are considering a hypothetical applicant with the same skill and knowledge as was available to Walker - but for present purposes it has not been suggested to us by either party that a hypothetical applicant would be possessed of different skills, knowledge, or information than that available to Walker - we therefore treat the hypothetical applicant as being analogous to Walker.

We consider that the proper approach to be taken by us in determining the prospects of success of the development application is akin to that adopted by Barrett J in Degiorgio v Dunn (No 2) [2005] NSWSC 3; (2005) 62 NSWLR 284 at [20-280], and by McColl JA in Lemoto v Able Technical Pty Ltd & 2 Ors [2005] NSWCA 153; (2005) 63 NSWLR 300 at [131-132], albeit under different statutory constraints in the context of what constitutes the provision of legal services "without reasonable prospects of success" for the purposes of wasted costs orders. Barrett J at [23] referred to Saville LJ in Cadogan v McCarthy & Stone (Developments) Ltd [2002] L&TR 249, who said "… A reasonable prospect does not entail that it is more likely than not that permission will be obtained. " At [28] Barrett J adopted " the construction of "without reasonable prospects of success" that equates its meaning with "so lacking in merit or substance as to be not fairly arguable". The concept is one that falls appreciably short of "likely to succeed"".

In respect of the question as to whether Walker believed that it had material which objectively justified proceeding with the application, McColl JA at [132] referred to Steyn LJ in Medcalf v Mardell UKHL 27; [2003] 1 AC 120 at [40]. His Lordship also said at [41] that " the point narrows down to the question whether it has been proved that the materials on which [Walker] in fact relied did [or did] not objectively justify their decision ". In George v Rockett [1990] HCA 26; (1990) 170 CLR 104 at 112, the Court said that for there to be "… " reasonable grounds" for a state of mind - including suspicion and belief - it requires the existence of facts which are sufficient to induce that state of mind in a reasonable person. "

At paragraph 42 of our first report we said that: "We do not consider that our role in this reference is to determine the issue referred to us on the basis of whether a party has discharged a particular onus. Rather, our role is: to inquire into and report on any facts relevant to the inquiry and report on the matter referred (UCPR 20.17)…"

We adopt the same approach in this second reference, where the questions referred to us require us to consider and weigh the totality of the evidence and to determine the prospects of success of the first development application and work performed by Walker between September 2006 and January 2007 (if any), and quantify any costs found not to have been reasonably and properly incurred.

We note, however, that there was an evidentiary burden upon Walker, which it satisfied, to show the existence of the facts and materials that induced its state of mind.

As previously indicated, counsel for VSA accepted that the "state of mind" was that of Walker as to its prospects and it was argued that this state of mind should be tested at the time immediately before Walker lodged the application on 29 September 2006. No compelling basis was put as to why the enquiry should be so narrowly confined. We note that the information available to an applicant will accrue over the time leading up to the lodgement of an application and it would be inappropriate to require the sole analysis of the reasonableness of pursuing an application being a single point on a single day of that process. The unreasonableness of this position is illustrated by the fact that by the date on which VSA asks us to determine the reasonableness of Walker's position Walker would have incurred most of the external and internal costs that form the subject matter of the second question referred to us. At that time, and after that expenditure, it would have been uncommercial and perplexing if Walker did not proceed with lodging its application - and the question before us should instead be whether the response of BSC et al warranted Walker incurring further costs in replying to the Request for Further Information. Accordingly, we have formed the view that the inquiry should be of Walker's state of mind throughout the period to 29 September 2006, and whether Walker's belief was objectively justified based upon facts, materials and law then existing. 26 After setting out the salient features of the history in respect of the Application the Referees concluded as follows: 102. Looking at the totality of the evidence and the information available to Walker when it lodged the application, we find that Walker had material before it which objectively justified proceeding with lodging the application. We consider that Walker held an objective belief, on the basis of the provable facts and a reasonably arguable view of the law, that its application would be considered on its merits and that the prospects of obtaining the development approval from the assessment manager were "fairly arguable". We consider that this was a reasonable belief for Walker to hold because it fell within the range of views which could reasonably be entertained.

103. In relation to the first question referred back to us, we consider that the first development application lodged by Walker in September 2006 (and by inference any substantive work performed by Walker in the period to January 2006 ( sic) ) had reasonable prospects of success and did not have so little prospects of success that the costs incurred by Walker in relation to the application were not "proper and reasonable costs of seeking or obtaining any development approvals and re-zoning". 27 Having regard to the answer to the first issue the Referees concluded that it was not necessary to quantify any costs: [111]. Adoption/Rejection hearing 28 The plaintiff seeks an order rejecting the Report with further remission of certain questions to the Referees for further report. The defendants seek an order for the adoption of the Report. The applications were heard on 30 November 2009 when Mr JA Arnott, of counsel, appeared for the plaintiff and Mr JB Simpkins SC, leading Mr FP Hicks, of counsel appeared for the defendant.

Issues for determination 29 The plaintiff contends that the Report should not be adopted for the following reasons:

(a) the Referees erred in concluding that the appropriate benchmark against which to consider whether costs of the Application were proper and reasonable costs was that set out by Barrett J in Degiorgio v Dunn (No 2) (2005) 62 NSWLR 284 ( Degiorgio ) at [20]-[28] and by McColl JA in Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 ( Lemoto ) at [131]-[132]; and

(b) the Referees erred in rejecting the evidence of Professor Brannock.

Appropriate test 30 The Referees were asked to decide whether the Application had "so little prospects of success" that the costs incurred in relation to it were not proper and reasonable costs. 31 The plaintiff emphasised that decisions in Degiorgio and Lemoto related to the provisions of the Legal Profession Act (2004) (NSW) that are concerned with the threshold that must be reached before a claim can be brought and, if proceedings are commenced when the threshold is not met, the circumstances in which a legal practitioner can face costs consequences and allegations of unsatisfactory professional conduct or professional misconduct. It was submitted that the test is a "low one" and is in an entirely different context to the present circumstances. 32 The plaintiff also submitted that the Referees should have applied a test of "whether the application was more likely than not to be approved". The plaintiff's written submissions included the following:

This was the appropriate threshold in this case and not below a threshold arising from Lemoto , because, in the context of an enquiry into proper and reasonable costs, the proper and reasonable approach to a development application is to consider whether it is more likely to succeed than not, and then to adjust the scope and nature of the application, and change the parameters of the approval which is sought, so the level and degree of likelihood is reached. … the minimum standard to make the costs proper and reasonable is a standard of more likely than not. 33 McDougall J referred to the prospect of the Application being "doomed to fail" and the question whether the defendant knew that it was doomed to fail. Neither party wished to adopt this test before the Referees and indeed, the Order referring the matter to the Referees required them to decide whether the application had "so little prospects of success". The Referees adopted a test that was described as being "akin" to that adopted by Barrett J in Degiorgi and McColl JA in Lemoto. The Referees referred to the fact that those decisions were under "different statutory constraints" and were therefore conscious that they were dealing with a matter under different statutory constraints. The test that the Referees adopted was whether the Application was so lacking in merit or substance as to be not fairly arguable. The Referees accepted that applying such a test would fall appreciably short of whether the application was "likely to succeed".

34 The Referees were asked to consider the hypothetical developer who would have had the advice and material available to it as was provided to the defendant prior to the submission of the Application. If the test to be applied to the hypothetical developer's conduct was that it had to be satisfied that it was more likely than not that the application would be approved, then the parties and the Court would have utilised that expression in the questions posed for the Referees. The parties obviously had some debate about the test to be applied to this question. The Short Minutes originally provided for the question to be answered on the basis that the application had "no prospects of success". That was then changed to the test whether the application had "no reasonable prospects of success". The final version was whether the first application had "so little prospects of success". A judgment had to be made by the Referees as to whether the prospects of success of this application were "so little" that any of the costs incurred in preparing it and lodging it would not be recoverable, that is, "not proper and reasonable" to impose on the plaintiff. 35 The Referees were of the view that the test "so little prospects of success" was very similar to the test "without reasonable prospects of success". I am satisfied that this comparison was appropriate and the adoption of the test "so lacking in merit or substance as to be not fairly arguable" is appropriate when applying the test of "so little prospects of success" in the context of the question. The insertion of the word "so" before the word "little" was to emphasise that the prospects of obtaining approval were not merely little but "so little", that the costs would not be reasonably or properly incurred. The Referees concluded that the defendant was justified in proceedings with lodging the Application because it had material before it on which it was entitled to conclude that that the prospects of obtaining the development approval were "fairly arguable". Thus the prospects were not so little as to make the costs unreasonable or improper. 36 I am not satisfied that the plaintiff has established that the Referees fell into error in relation to the applicable test.

Rejection of evidence 37 Counsel for the plaintiff submitted to the Referees that Mr Brannock's expertise entitled him to be considered "the proxy for the assessment manager" and that his task was that of an assessment manager (tr 561). Counsel subsequently submitted that the question for the Referees was really "from the point of view of someone submitting the development application" and said (tr 562):

They have to form the view of what the assessment manager would do based on the material they are proposing to provide them and, most importantly, the scope of the application that they are proposing to put to the council. So the information received from submitters cannot be relevant to that determination. What one looks at is the material put before the council and the Act and the policies, and what Professor Brannock's evidence seeks to do is identify relevant parts of the Act and identify the relevant policies that would be relevant to forming that view. 38 The following exchange then took place [tr 562-563]:

REFEREE CATT: Don't you therefore need an expert developer to say, "based on all this information I would have given up on the project"? MR ARNOTT: No, because an expert developer would rely on the planning consultants which they all retain. In this case it was Place, and Place was providing that advice. We heard yesterday that that advice was ignored on occasions and that was their role, to assess whether this development application was one which should go forward. Place said no, that that is the role that the developer has for a planning consultant. That is why they have planning consultants, in order to frame development applications which are likely to succeed. 39 The Referees noted that Mr Brannock had no experience as a developer. 40 At the time the plaintiff filed its present Notice of Motion it also wrote to the Referees requesting more detailed reasons in relation to the rejection of Mr Brannock's evidence. Of course this was after the conclusion of the reference and after the Referees had complied with their obligations and produced their Report to the Court. The defendants wrote to the Referees suggesting that they could not see any proper basis for the plaintiff's request for additional reasons at this late stage. At the time of the hearing of these applications no further reasons have been produced. The plaintiff did not seek an order that the Referees provide additional reasons, nor did it seek an adjournment of these applications to explore the prospect of obtaining additional reasons. 41 One ground upon which the Referees rejected Mr Brannock's evidence was that he was not provided with all relevant information to form a relevant opinion that would assist the Referees. It is not in issue that Mr Brannock was not provided with all the information that was available to the defendant at the time that it lodged the Application. It would have been necessary for any expert (even if appropriately qualified) to assess what was available to the developer to be in a position to form an expert opinion of the developer's assessment of the prospects of success of the Application. 42 Another ground upon which the Referees rejected Mr Brannock's evidence was that he had been provided with information that was irrelevant to the determination of the questions before them. That irrelevant information was the subsequent communications to the Council by the various agencies suggesting refusal of the Application. It is quite clear that Mr Brannock took these irrelevant matters into account in reaching his opinion. The Referees also expressed the view that they were unable to properly understand what matters Mr Brannock had taken into account in reaching his conclusion. The Referees' reasons indicate that they were of the view that it would not be possible to excise the irrelevant information or to work out what weight was given to that irrelevant information in any reasonable fashion to assist them in their duty to answer the questions referred to them. 43 It was accepted by the plaintiff in submissions to the Referees that the question was "from the point of view of someone submitting the Development Application" (tr 562). In those circumstances the Referees were entitled to form the view that Mr Brannock's lack of experience as a developer was a matter to be taken into account. 44 Finally the Referees concluded that the report would be of "so little weight" in determining the relevant questions as to be of no probative value. 45 The reasons given by the Referees were adequate to understand the basis of their rejection of the expert's report. It is clear that the expert was swayed in his opinion by irrelevant material. It is also clear that he did not have all the relevant material necessary to reach an appropriately informed opinion to assist the Referees. I am not satisfied that the Referees fell into error in rejecting the expert evidence.

Conclusion 46 The plaintiff's Motion will be dismissed. The defendants' Motion will be granted. The parties are to prepare Short Minutes of Order reflecting this outcome. If the parties are unable to agree on an appropriate costs order, I will hear argument when the matter is listed for the filing of the Short Minutes of Order at 9.30am on 11 December 2009. **********

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.