Woolcorp Pty Ltd v Rodger Constructions Pty Ltd [2017] VSCA 21

Court of Appeal (Vic)|2017-02-21|Before: Santamaria JA, Kyrou JA

CONTRACT - Developers of adjoining land - Alleged agreement for one developer to contribute to the other's construction costs of a public road - Whether agreement reached - Whether 'offer' capable of acceptance - Whether agreement could be inferred - No agreement - Appeal allowed.

RESTITUTION - Work and labour done claim - Causation - Whether works performed at the request of the applicant - Relevance of benefit received - No proper basis for claim - Lumbers v W Cook Builders Pty Ltd (in liquidation) [2008] HCA 27; (2008) 232 CLR 635, applied - Appeal allowed.

1 The applicant, Woolcorp Pty Ltd ('Woolcorp'), and the respondent, Rodger Constructions Pty Ltd ('Rodger Constructions'), are both property developers. They have interests in adjacent pieces of land under the planning control of the Warrnambool City Council ('the Council').

2 Rodger Constructions constructed a road ('Quarry Road'), as part of a subdivision, on land in which it had an interest. Upon its completion, Quarry Road provided benefits to various neighbouring landowners, including Woolcorp. Rodger Constructions sued Woolcorp, claiming that there was an agreement between them for Woolcorp to contribute to the construction costs of Quarry Road or, alternatively, that Woolcorp was obliged to pay Rodger Constructions for part of the costs of construction by way of restitution.

3 The trial judge found a binding contract existed, and awarded Rodger Constructions $218,565.56 (being a "reasonable contribution"),[1] plus interest. The trial judge also found that if, contrary to his finding, no contract was created, Rodger Constructions would have succeeded in recovering the same amount by its restitutionary claim.[2]

4 Woolcorp applied for leave to appeal. As no judgment was entered in favour of Rodger Constructions based on the restitutionary claim, Rodger Constructions filed a notice of contention seeking relief pursuant to the restitutionary claim in the event Woolcorp successfully appealed against the contract claim.

5 Woolcorp's proposed grounds of appeal included that:

(1) The trial judge erred in finding that there was a contract made between Woolcorp and Rodger Constructions.

(2) In deciding whether Rodger Constructions was entitled to restitution, the trial judge failed to have proper regard to the facts that:

(a) any work performed by Rodger Constructions was performed pursuant to a contract with a third party under which Rodger Constructions was entitled to payment;

(b) there was no evidence that the relocation of Quarry Road caused any increase in construction costs; and

(c) Rodger Constructions at all times intended to construct a road with the dimensions of Quarry Road as part of its sub-division.

(1) Whether Woolcorp and Rodger Constructions entered into a contract, pursuant to which Woolcorp agreed to pay Rodger Constructions for part of the costs of the road works.

(2) If no contract was created, whether Rodger Constructions was entitled to be paid, by way of restitution, for part of the works it performed.

7 For the reasons stated below, Rodger Constructions did not have a valid claim on either basis. Accordingly, leave to appeal will be granted and the appeal will be allowed.

Elaboration of the issues and the relevant principles

8 The contract case was not put by Rodger Constructions on the basis of an express offer and an express acceptance, coupled with consideration and an intention to create legal relations. Rather, Rodger Constructions contended that Woolcorp made a written 'offer to contribute' to the construction costs and, although an offer was never expressly accepted, a contract could be inferred from the course of conduct that followed.

9 In considering whether the facts allow this inference to be properly drawn, the following must be kept in mind:

(1) Circumstances in which a contract will be inferred are rare.[3]

(2) Before the inference may be drawn, a party must establish that the conduct positively indicated that both parties considered themselves bound by the contract. It is not enough to establish that conduct was merely consistent with the alleged terms of the contract.[4]

(3) In the absence of an offeree's express consent, acceptance of an offer may be inferred if an objective bystander would conclude from the offeree's conduct, including its silence,[5] that the offeree has accepted the offer and has signalled that acceptance to the offeror.[6]

10 On the alternate restitutionary claim,[7] Rodger Constructions essentially relied upon:

(1) A request from Woolcorp for Quarry Road (which was already to be constructed by Rodger Constructions as part of its subdivision) to be moved from its originally planned location.

(2) The benefit that Woolcorp derived from the relocation and construction.

11 No case based on estoppel was alleged. Further, Rodger Constructions did not contend that Woolcorp acquiesced in the construction of Quarry Road or that a cause of action arose by reason of any reliance by Rodger Constructions upon a representation made by Woolcorp.[8]

12 The law of restitution does not necessarily involve a consideration of a set list of factors in determining whether a claim has been properly made out.[9] In a case involving a request for work and labour, where no binding contract exists, once the elements of such a restitutionary claim are established, it is inappropriate to then consider other factors (including whether the work was performed at the plaintiff's expense) in determining whether a plaintiff has satisfied its onus of establishing a case to recover a fair price for the work done.[10]

13 In short, if Rodger Constructions established a relevant causal connection between the work it performed which benefitted Woolcorp and a request from Woolcorp to perform that work, then it would have made out its case (subject to any defences Woolcorp might have had).

14 That said, an ancillary issue in this case was the amount, if any, Rodger Constructions was entitled to be paid if it otherwise succeeded in establishing liability in its claim for work and labour done. Rodger Constructions sought approximately 50 percent of the relevant construction costs of Quarry Road from Woolcorp.[11] This claim was made in circumstances where Rodger Constructions had already entered into a contract with another landowner to, amongst other things, construct all roads as part of a subdivision ('the Development Agreement'), for which it would be paid in full.[12] Further, Rodger Constructions and the other landowner had already agreed to construct a road of the same, or approximately the same, dimensions parallel to Quarry Road before Woolcorp made any request for relocation. There was no case put by Rodger Constructions that any additional costs were incurred by it in constructing Quarry Road in the location as finally approved.

15 The trial judge carefully set out the factual background to the dispute, which extended over a period of approximately 10 years. The key facts are that, before 2004, the Council had identified an area of land to the north-east of Warrnambool as being suitable for future residential development ('the Development Land'). The Development Land had seven owners, including Woolcorp.

16 Trevor Martin ('Martin') owned approximately half of the Development Land, which was located to the north ('the Martin Land'). Martin intended to develop the Martin Land and, on 17 September 2004, entered into the Development Agreement with Rodger Constructions, by which they became 'essentially joint venturers'.[13]

17 The Development Agreement provided, amongst other things, that the parties did not intend 'to establish a corporation, partnership, or other entity, or to carry on business in common with a view to profit'.[14] Pursuant to the Development Agreement, Rodger Constructions was to make claims as a contractor for work done on reasonable commercial rates with respect to outlays, and on the specific rates stipulated with respect to project co-ordination and construction work.[15] As to payment, Rodger Constructions was entitled to an equal share with Martin in the proceeds of sales of lots created by the Martin Land subdivision, which were to be paid in the following order: first, $2 million (pro rata for each sale) to Martin; then 'a sum equal the total then certified claims' to Rodger Constructions; and, lastly, once these amounts had been paid, the balance was to be divided equally between Martin and Rodger Constructions.[16] The works to be performed included '[s]treet planning, construction ... and other services as required by any planning permit'.[17] The Development Agreement said nothing about where or how many roads were to be constructed.

18 The land not owned by Martin formed the southern half of the Development Land ('the Southern Land'). In contrast to Martin and Woolcorp, some of the other owners were not actively interested in development. As at 2004, none of the six owners of the Southern Land had entered into any form of development agreement. The largest of the southern owners was Woolcorp, whose land was on the eastern flank ('the Woolcorp Land'). Other owners included Neil and Shirley Smart ('the Smarts'), Chris and Anna Owen ('the Owens') and Carmel Lanigan ('Lanigan').

19 It was not until December 2007 that a planning scheme was lodged with the Council on behalf of Rodger Constructions. This was followed by a meeting, at the Council offices on 29 January 2008, attended by interested landowners in the area. Rodger Constructions' planner, SM Urban Pty Ltd ('SM Urban'), also attended. Justine Jenkins ('Jenkins') of SM Urban gave a presentation. Woolcorp was represented at the meeting by its principal, Leon Gleeson ('Gleeson'), and its architect and planner, Paul Matthews ('Matthews'). During the course of this meeting, the principal director of Rodger Constructions, Graeme Rodger ('Rodger'), stated that 'Rodger Constructions (through SM Urban) would prepare a development plan for the whole of the [Development Land]'.[18] There was no suggestion that any benefit the interested landowners might derive from this work would be paid for by anyone other than Rodger Constructions.

20 Subsequently, a draft development plan was prepared by SM Urban for the whole of the Development Land. This draft development plan was provided to Woolcorp in May 2008. A revised plan ('the SM Urban Plan') was provided to Woolcorp in June 2008. Both of these plans showed the southernmost of the east-west roads on the Martin Land ('the Proposed East-West Road') located some distance to the north of the southern boundary of the Martin Land. This meant the Proposed East-West Road did not touch the Southern Land at any point. Further, both plans showed the high amenity streetscapes for the Development Land to be located entirely within the Southern Land.

21 On 17 June 2008, the operation of the Development Agreement was extended by Martin and Rodger Constructions until 17 September 2010.[19]

22 On 4 July 2008, a meeting was held between Woolcorp and Rodger Constructions. At that meeting, Matthews provided Rodger with a schematic design which showed how Woolcorp could 'better develop [its] land' if changes were made to the SM Urban Plan. This new plan did not move the Proposed East-West Road. In response, Rodger told Matthews to liaise directly with SM Urban.

23 On 18 July 2008, Matthews sent an email to Jenkins attaching a revised development plan. Matthews noted that the changes achieved a higher lot yield for Woolcorp, but, at this stage, there was no suggestion of moving the Proposed East-West Road. The detail of the response is not necessary to discuss. Ultimately with respect to this proposal, SM Urban indicated that Rodger Constructions did not intend to make any revision to the SM Urban Plan.

24 On 21 August 2008, in response to the SM Urban Plan, the Smarts wrote to the Council rejecting the suggestion that the high amenity streetscapes should be located within the Southern Land. The Smarts stated the 'streetscape should run east-west in the northern section of the development [ie in the Martin Land]'.

25 The following day, the Owens sent a letter to the Council raising other issues, including with respect to the high amenity streetscape. On the same day, Lanigan wrote to the Council raising issues with the SM Urban Plan, principally with respect to drainage issues.

26 On 25 August 2008, Matthews sent a letter to the Council ('the 25 August 2008 Letter') attaching two plans, the SM Urban Plan and a further revised plan prepared by Matthews, which relocated the Proposed East-West Road to the southern boundary of the Martin Land ('Woolcorp's Proposal').[20] Thus, although Woolcorp's Proposal kept the road (which became Quarry Road) entirely on the Martin Land, it touched approximately 306.3 metres of the northern boundary of the Southern Land, including the Woolcorp Land. The benefit to Woolcorp of Woolcorp's Proposal was that it required fewer roads to be within Woolcorp's proposed subdivision. If adopted, this would be achieved without changing the amount of roadworks necessary on the Martin Land.

27 In the 25 August 2008 Letter, Matthews stated he would like to express his partial support for the SM Urban Plan, but sought 'to include some justifiable amendments to strengthen the development opportunities of Woolcorp without adversely impacting on adjoining landholders or the urban design principles proposed in the plan'. Matthews then listed five matters under the words, 'note the following points are made in the context of [the Woolcorp Land] only', including:

3. The combination of road network and drainage infrastructure will be excessive in proportion to the subject land size in the [SM Urban Plan].

Excluding Gateway Road extension the proposed amendments reduce the road reserve in linear metres by approximately 149 metres than those proposed by SM Urban. Adjoining landholders to the west and the north also benefit with net increases in residential land for development. It is expected the Owen Family will gain one parcel of land and Rodger Constructions two parcels of land. The location of underground pipes still remains in the road network and allows the overland flow path to traverse the site from the east to the south-west corner as proposed by SM Urban.

4. The proposed east-west linkage with a high amenity streetscape will not equally address the needs of future residents in the northern half as those in the southern half of the [SM Urban Plan].

[Woolcorp's Proposal] provides a more suitable position for the east-west linkage in the centre of the site to further increase the available catchment within a walking distance than that proposed by SM Urban**. Woolcorp offer to contribute to the construction costs for this road where it runs between their east and west boundary (it lays on the property of Roger (sic) Constructions** [ie the Martin Land]).

(Emphasis added in bold.)

The 25 August 2008 Letter concluded by suggesting 'this submission' clearly illustrated the benefits of the proposed changes. Authority was sought to implement the amendments when considering the SM Urban Plan.

28 On 27 August 2008, Matthews sent an email to Rodger, with a copy to Jenkins ('the 27 August 2008 Email'). After noting that Gleeson had spoken to Matthews about emailing 'the submission' made to the Council on 25 August 2008, Matthews referred to the 'attached written and drawing submission', being the 25 August 2008 Letter, including Woolcorp's Proposal.[21] The email continued:

I look forward to your comments and hopefully the proposed amendments are to everyone's benefit. It certainly will achieve a stronger plan of subdivision for [Woolcorp] and yield lots on average of 700m2 without compromising your proposal.

29 On 29 August 2008, the Council also forwarded the 25 August 2008 Letter to SM Urban, along with the responses received from the Owens, the Smarts and Lanigan. This was followed by an email on 1 September 2008 from the Council, attaching a letter outlining the Council's expected requirements in reviewing the submissions. The attached letter requested that Rodger Constructions provide 'a strategic response to the issues identified'. The Council requested that Rodger Constructions consider amending the SM Urban Plan, in the following terms:

Given that your primary objective relates to the northern parcel of land, the proposed alteration to the southern section by [Woolcorp] and, as I understand it, in consultation with the Owens ..., should have limited concern to yourselves provided that the key points of the northern section are maintained. Council therefore requests that consideration be given to amending [the SM Urban Plan] to accord with the preferred layouts of these parties.

(Emphasis added.)

30 On 1 September 2008, Rodger Constructions' position remained unchanged with respect to Woolcorp's Proposal. However, Rodger Constructions had 'no major concern' about the layout in Woolcorp's Proposal, but had bigger concerns relating to drainage.[22]

31 On 2 September 2008, Jenkins sent an email to the Council raising various drainage issues to discuss before Rodger Constructions was to 'formally respond'.[23] Jenkins asked if a phone conference could be arranged 'ASAP to talk through these matters'. Towards the end of the email, Jenkins stated:

Aside from the above concerns, we are generally accepting of the revised plan in principle, in particular the east-west amenity link [i.e. Quarry Road] located in the centre of the site.

32 There was no evidence before the trial judge of the face-to-face discussions that took place between Jenkins and the Council after this correspondence. Jenkins was not called to give evidence on behalf of Rodger Constructions. Further, no Council officers were called. Representatives of Woolcorp were not involved in any relevant discussions until around mid-November 2008.[24]

33 On 17 November 2008, Jenkins sent an email to the Council listing 'things we wish to discuss with you'.[25] Relevantly, the email referred to a meeting to be held the following day at 4.00 pm with representatives of the Council, and Gleeson and Matthews. The email contained a proposed agenda, which concluded with, 'Moved east-west linkage on joint boundary - discuss an agreement with Gleeson for 50/50 contribution amounts'. As the trial judge observed,[26] this suggested that up to this point there had been no agreement regarding any contribution by Woolcorp. It also suggested Rodger Constructions had already decided to have the Proposed East-West Road '[m]oved'.

34 The proposed meeting was held the following day. A diary entry of Matthews recorded that two Council officers attended the meeting, together with Matthews and Arnold Brian from Brian Consulting Pty Ltd ('Brian Consulting'), Rodger Constructions' engineer. Matthews had no recollection of the details of the meeting, other than recalling the Council planner being very keen to bring about some sort of compromise. Matthews could not recall Jenkins being at the meeting. His diary note made no reference to her. Other than Matthews, no one in attendance at the meeting was called to give evidence.

35 On 4 December 2008, Jenkins sent Matthews an email asking how he was progressing and whether there was any word from Woolcorp. The email recorded that the Council planning manager was very keen to get the development plan layout finalised promptly. In his response, Matthews stated he would have a drawing completed by the following day or at the latest over the weekend.

36 On 8 December 2008, Matthews sent Jenkins a revised development plan with respect to the Woolcorp Land ('the Final Woolcorp Plan'). The email referred to 'our recent meeting' at the Council.[27] Matthews noted that a 'court bowl' (ie a cul-de-sac) had been added, which eliminated the need to intersect roads between the Woolcorp Land and the Martin Land. The email concluded by inviting further enquiries if additional information was required.

37 The Final Woolcorp Plan not only had Quarry Road located on the southern boundary of the Martin Land, but also showed Quarry Road as a 'high amenity streetscape'.

38 On 10 December 2008, Jenkins sent an email attaching a revised development plan to the Council, which was copied to others, including Matthews and Rodgers. The email noted that the revised plan incorporated the Final Woolcorp Plan and, amongst other things, added a pedestrian connection 'as discussed during our meeting on 19/11/2008'.[28]

39 On 15 December 2008, the Council, pending approval by the Minister for Planning, approved the final development plan submitted by SM Urban on 10 December 2008. SM Urban then turned its attention to obtaining planning approval of the Martin Land subdivision.

40 On 2 May 2009, Matthews sent an email to the Council stating that Woolcorp had withdrawn its 'submission' made on 25 August 2008. Two days later, the Council responded thanking Matthews for the withdrawal. Under cross-examination, Matthews accepted that Woolcorp's submission had been withdrawn in line with a request from the Council, however he was unable to say why that request had been made. The trial judge found that Woolcorp withdrew its submission because Rodger Constructions had 'accommodated its wish to have Quarry Road moved'.[29]

41 On 5 May 2009, the Owens and Lanigan sent separate letters to the Council withdrawing their respective 'submissions' made on 22 August 2008.

42 On 6 May 2009, Jenkins wrote to the Council and withdrew Rodger Constructions' 'submission' with respect to its previous planning scheme amendment.

43 By mid-2009, Rodger Constructions had commenced construction of the infrastructure works for the Martin Land subdivision.[30]

44 On 31 July 2009, the Development Agreement was varied so as to become unconditional with respect to the time for its performance.[31] Otherwise, the Development Agreement, as varied, was confirmed by Martin and Rodger Constructions.

45 Although the exact timing is not clear, during 2009 Woolcorp acquired the portion of the Southern Land owned by the Smarts.[32]

46 In 2009, the Council was attempting to get each of the Development Land owners to enter agreements under s 173 of the Planning and Environment Act 1987 with respect to infrastructure for the total subdivision. Only Martin (in conjunction with Rodger Constructions) and Woolcorp were interested in such agreements.[33]

47 On 5 November 2009, a meeting was held between Gleeson, Matthews and Rodger. By this time, Rodger Constructions and Woolcorp were proceeding with their separate neighbouring subdivisions. However, although contemporaneous diary records make it clear the meeting took place,[34] no one who attended was able to give meaningful evidence about what was discussed on that occasion, including with respect to Quarry Road. There was no suggestion that, when they met on 5 November 2009, any of Gleeson, Matthews or Rodger raised the issue of Woolcorp contributing to the construction costs of Quarry Road.

48 On 14 December 2009, the Council rescinded its resolution of 15 December 2008,[35] adopted an amendment to rezone part of the Development Land from farming to 'Residential 1 Zone' and resolved to forward the amendment to the Minister for Planning for approval. This had the effect of rezoning only the parts of the Development Land constituted by the Martin Land, the Woolcorp Land and the land purchased by Woolcorp from the Smarts.

49 In early 2010, there was correspondence between the Council and Rodger concerning work being carried out on the Martin Land in advance of the rezoning. On 1 February 2010, Rodger wrote to the Council stating he was well aware, as a land developer of in excess of 40 years experience, of the risks in undertaking the preliminary works. Rodger stated that such works were consistent with the farming zoning and referred to 3 legal opinions he had provided to the Council to support his position. Rodger also stated:

It is worth noting that there have been no significant changes to the [development plan] since Council's 'in principle approval' in December 2008. Other than the [Martin Land] has been (sic) separated from the remainder of [the Development Land], but the layout of the development plan is unchanged.

Rodger then outlined some 'key dates' which demonstrated the Council's review of the development plan, and included the following:

Throughout Sept-Dec 2008, further consultation with Council, landholders and additional site assessments were completed in response to drainage and traffic concerns. Plan changes were made and issues resolved.

50 In March 2010, the Council raised an issue with Rodger Constructions concerning a 'dog leg' or 'kink' in a north-south road running through the Martin Land connecting it to the Southern Land. This issue was resolved on 31 May 2010 when Rodger Constructions accepted an amendment imposed by the Council, but not before threatening to take legal action against the Council on the issue.

51 Rodger Constructions pleaded that, around early 2010, it was agreed at a meeting between Rodgers and Gleeson that an already existing agreement based on Woolcorp's Proposal was varied, so that Woolcorp's reasonable contribution to the construction costs was to be determined by Rodger Constructions' engineers. In his evidence, Rodger said this meeting occurred on the Martin Land in 'mid-early May' 2010,[36] which he later revised to 'between March and May' 2010.[37] Rodger gave an account of an alleged oral variation. This evidence was rejected by the trial judge.[38] There was no challenge to that finding.

52 However, there was no dispute that, in May 2010, Gleeson and Rodger met and that the issue of Woolcorp contributing to the construction costs of Quarry Road was discussed. The trial judge found that, during this conversation, Gleeson acknowledged that Woolcorp had previously agreed to contribute to the construction costs of Quarry Road.[39]

53 Accordingly, the remaining issue is whether what was said between Gleeson and Rodger after a Council meeting in May 2010, at which the 'dog leg' or 'kink' was discussed, consisted of such an acknowledgment by Gleeson.

54 In his evidence in chief, Rodger said that, on 14 May 2010, he met Gleeson at the entrance to the foyer and that he told Gleeson that they would have to work together 'on this' to get a result. He gave evidence that Gleeson said that was fine, and that, by this, they both acknowledged they had worked together before to get a result. Rodger also swore in chief that he told Gleeson he would get Stuart Titmus of Brian Consulting ('Titmus') 'to come up with the costings for our shared east-west road', and Gleeson responded that that was okay by him.

55 Under cross-examination, Rodger said that in this conversation he was just reinforcing the agreement that Rodger Constructions and Woolcorp had. At that stage, Rodger noted he had not engaged Titmus to do the costings and he was giving Gleeson the opportunity to say 'no' with respect to the choice of Titmus. In a later answer, Rodger said 'the agreement' referred to was a discussion he had had earlier with Gleeson on the Martin Land, which he guessed was two or three months earlier. This is a reference to the alleged variation which the trial judge rejected.[40]

56 Under further cross-examination, Rodger accepted that, in response to what Rodger said to Gleeson about Woolcorp contributing to the construction costs, Gleeson had said 'I suppose'. When further asked whether he remembered Gleeson saying 'I suppose', Rodger said 'well, [Gleeson] didn't give a negative indication that he wouldn't pay for it'.[41]

57 In giving his evidence, Gleeson acknowledged that a conversation took place after the Council meeting. Gleeson also acknowledged that Rodger asked him to contribute to the construction costs of Quarry Road. In response to Rodger, Gleeson said he was a bit taken aback and replied 'well, I suppose'. Gleeson said he then left it at that and nothing more was discussed about it. When asked why he did not pursue the issue, Gleeson said he expected Rodger would have negotiated with him if Rodger wanted to reach an agreement. Upon the suggestion in cross-examination that Gleeson may have forgotten about the details of the discussion, Gleeson said he would not forget a conversation concerning him contributing to, or making an agreement about, such matters.

58 As to the discussion on 14 May 2010, the trial judge stated:[42]

I consider that it is probable that ... Gleeson indicated positively and without equivocation that Woolcorp would contribute to the construction costs of [Quarry Road]. It would be unlikely that [Rodger] would have accepted an ambiguous or half-hearted response. I otherwise reject the explanations or amplifications given by both [Rodger] and [Gleeson].

I am unable to determine whether [Rodger] referred to [Titmus]. The fact that [Titmus] did not produce costings until April 2011 suggests that [Rodger] was reconstructing or embellishing his evidence. Similarly, I am unconvinced by [Gleeson]'s evidence that he was 'taken aback' and his response was somehow not to be taken seriously. I accept that the conversation was an acknowledgment by [Gleeson] that Woolcorp had agreed to contribute to the construction costs of Quarry Road once Rodger Constructions had agreed to move the road in accordance with Woolcorp's wishes.

59 On 20 August 2010, the Council wrote to Jenkins stating that Rodger Constructions' planning permit application had been approved. Condition 4 of the permit stated:

All road and drainage works shown on the approved construction plans must be undertaken at full cost to the owner [ie Martin] or applicant [ie Rodger Constructions] prior to the issue of a statement of compliance, unless otherwise agreed in writing with the Responsible Authority. ...

60 On 15 December 2010, the planning permit was amended. The amended planning permit contained condition 4 in the same terms as set out above.

61 The construction of Quarry Road was completed by March 2011.[44] At that time, solicitors acting for both Martin and Rodger Constructions wrote to the Council stating that Quarry Road would 'in future, provide benefit to the land owners contiguous with the [Martin Land] on the southern boundary'. After stating those owners included Gleeson, the Owens and another owner of the Southern Land, the solicitors requested that the Council advise them on the mechanism by which the Council would obtain contributions from those owners to reimburse Martin and Rodger Constructions.

62 The Council's response later that month was in the following terms:

The road located on the southern boundary of [the Martin Land] is an internal road and is required to service your client's (sic) subdivision. It is therefore not included in any Council development contributions plan or similar funding mechanism.

As you would be aware, Planning Permit P2008-173 requires your client (sic) to construct all internal roads shown on the endorsed plans at their own cost.

I trust this clarifies your query.

There was no evidence of any challenge by Martin or Rodger Constructions to the Council's position in this regard.

63 Self-evidently, the proposal put to the Council by Martin and Rodger Constructions in March 2011 was entirely inconsistent with an enforceable agreement already being in place between Rodger Constructions and Woolcorp for Woolcorp to contribute to the construction costs of Quarry Road. Rodger explained this on the basis that, at that stage, he had not instructed his solicitors about the alleged agreement.[45]

64 On 18 May 2011, by email to Matthews, Rodger Constructions forwarded a letter to Woolcorp entitled 'Contribution to common east-west road' ('the 18 May 2011 Letter'). In seeking a contribution to the Quarry Road construction costs, the letter stated:

We refer to the Development Plan for your company's ... subdivision.

You will recall that at the initial planning meetings held in late 2008, that your company's representative, [Matthews] indicated that your company would contribute to its reasonable share of construction costs for the above road, given that your development will benefit from that road.

A copy of [the 25 August 2008 Letter]... is enclosed for your reference.

As you will be aware, the road has now been fully constructed and it is anticipated that our company's joint venture subdivision of the adjoining land will be finalised in the near future.

Please find enclosed Construction Cost Estimate for [Quarry Road] prepared by Brian Consulting. Your company's contribution to the road construction cost is calculated to be in the sum of $218,565.56.

We appreciate that you will not have immediate benefit of [Quarry Road] and therefore ... [the 18 May 2011 Letter then set out three possible alternate times for payment].

Kindly signify your agreement by signing and returning the enclosed copy of this letter.

65 The 18 May 2011 Letter was signed by Rodger. A proposed acknowledgment at the bottom read:

Woolcorp Pty Ltd hereby acknowledges and agrees to contribute to the construction of the above road on the terms set out in this letter.

A place then appeared immediately under the proposed acknowledgment for execution by Woolcorp.

66 Before continuing with the chronology, it is noted that no finding was made, and there was no evidence that would have supported a finding, of any meeting attended by Matthews at which he indicated that Woolcorp would contribute to the reasonable share of the Quarry Road construction costs.[46] Further, the second paragraph of the 18 May 2011 Letter (which referred to this alleged conversation) does not suggest a binding agreement between Woolcorp and Rodger Constructions resulted. Furthermore, it was not suggested that the 25 August 2008 Letter, containing Woolcorp's Proposal, or the forwarding of that letter on 27 August 2008, gave rise to a contract. Moreover, the 18 May 2011 Letter sought that Woolcorp signify its agreement by signing and returning the proposed acknowledgment. In short, although the contents of the 18 May 2011 Letter may not have been inconsistent with an agreement being in place for Woolcorp to contribute, it did not contain any allegation of a pre-existing binding contract.

68 On 28 September 2011, Rodger Constructions sent an email to Matthews attaching the 18 May 2011 Letter and stating that Rodger Constructions was 'still seeking a commitment from [Gleeson] for his contribution to' Quarry Road. Matthews responded promptly by email, stating previous correspondence had been forwarded to Gleeson. Matthews also said he was not in a position of authority to make any response and that any further communication should be made directly to Gleeson. The following day, Rodger Constructions stated that they were using Matthews as a conduit to Gleeson as they had previously done 'whilst never anticipating [Matthews] would be able to commit [Gleeson] to anything'.

69 No meaningful response was obtained from Gleeson.

70 Up until this time, Woolcorp had not commenced its subdivision. This occurred in late 2011.

71 On 11 April 2012, solicitors acting for Martin and Rodger Constructions again wrote to Woolcorp. The letter enclosed emails sent on 18 May 2011 and 28 September 2011, together with the 18 May 2011 Letter seeking Woolcorp's acknowledgment. Having referred to the enclosures, the letter asked Gleeson to sign and return the 18 May 2011 Letter to 'acknowledge your company's agreement to contribute its pro-rata share to the cost of construction of [Quarry Road], of which your company of course has received benefit'. The letter was copied to Rodger. Again there was no suggestion of a pre-existing binding agreement.

72 On 18 April 2012, Woolcorp's solicitors responded, recording their instructions that there was no basis for alleging a contract between Rodger Constructions and Woolcorp in relation to the construction of Quarry Road. The letter stated that if a contract was being alleged, a description of how that contract came about should be provided.

73 On 6 June 2012, Martin and Rodger Constructions' solicitors sent a letter in reply in which they stated they had been provided with further instructions. The letter referred to Woolcorp's Proposal, and then stated that the relocation of Quarry Road was only agreed after 'an express oral undertaking' by Gleeson to both Rodger and Sam Stevens ('Stevens') of Rodger Constructions 'that [Gleeson] would contribute his company's proportionate share to the construction of the east/west road contiguous with his boundary'. The letter further asserted that Gleeson's oral undertaking was made to 'our clients' on at least two occasions and that, at least on one occasion, his undertaking was witnessed by Council planning officers.

74 The letter then continued by stating the offer was accepted by 'our clients' (without saying how) and was evidenced in the 25 August 2008 Letter (outlining Woolcorp's Proposal). The letter then repeated that the offer had been accepted by 'our client'[47] (again without stating how) and Quarry Road was constructed in good faith 'in the belief that your client would provide an equitable contribution as evidenced by' Woolcorp's Proposal. The letter concluded by again requesting that Woolcorp contribute to the construction costs 'on the requested terms' and by inquiring, in the absence of an acknowledgment to contribute, whether Woolcorp's solicitors had instructions to accept service of proceedings.

75 As the trial judge observed,[48] this letter contained a number of statements that were simply incorrect or were inconsistent with the way the case was put by Rodger Constructions at trial. Stevens was not involved in discussions between Rodger and Gleeson about Woolcorp contributing to the Quarry Road construction costs. Further, no relevant discussions were witnessed by Council officers. In addition, the 25 August 2008 Letter did not evidence any acceptance on the part of Rodger Constructions. At the time the 25 August 2008 Letter was sent to the Council, it had not been provided to Rodger Constructions and at trial no agreement was alleged to have been reached before that time. Further, there was never any suggestion at trial that Martin had ever accepted any offer from Woolcorp, either before or after 25 August 2008.

76 On 1 August 2012, Woolcorp's solicitors responded, rejecting any suggestion of an agreement. It was asserted that the 25 August 2008 Letter did not constitute something Rodger Constructions could accept to make a contract and that it was not sufficiently detailed to enable Rodger Constructions to rely on it to create an estoppel or otherwise. Further, the letter stated that Woolcorp's Proposal was an objection to the SM Urban Plan and that it was never determined, the objection having been withdrawn on 2 May 2009 to enable Rodger Constructions' development proposal to proceed.[49]

77 On 17 December 2013, the solicitors for Martin and Rodger Constructions sent a letter on behalf of Rodger Constructions alone. That letter threatened legal proceedings in the event that the sum of $218,565.56 was not paid by mid-January 2014. In so doing, Rodger Constructions' solicitors maintained there was an agreement for Woolcorp to contribute to the construction costs. Further, the letter stated that to the extent that the agreement was 'not explicit about how the amount is to be calculated [a court] would have no difficulty implying a term that the contribution was to be a "reasonable" amount and assess the quantum accordingly'.

78 The letter attached a draft statement of claim. That draft pleading alleged an agreement in 2008 pursuant to an oral offer, coupled with the 27 August 2008 Email (attaching the 25 August 2008 Letter), and an oral acceptance by Rodger in several conversations 'during or shortly before August 2008' (emphasis added) and 'by [Rodger Construction]'s conduct in obtaining approval for and constructing [Quarry] Road in the location requested by [Woolcorp]'. To be clear, in contrast to the amended statement of claim relied upon at trial, the draft statement of claim:

(1) Did not allege any conversations between Rodger Constructions and Woolcorp in or about November 2008 which gave rise to the alleged agreement.

(2) Said nothing of a variation of the alleged agreement in early 2010, pursuant to which Woolcorp would pay half the cost of Quarry Road as determined by Rodger Constructions' engineers.

79 In due course, the proceeding was commenced and a statement of claim was filed on 7 March 2014. By that document, Rodger Constructions continued to allege an agreement formed in August 2008, pursuant to a conversation between Rodger and Gleeson at that time, but did not allege any relevant discussions in 2010. Further, when particulars of the statement of claim were provided in April 2014, those particulars did not refer to any discussion between Rodger and Gleeson on the Martin Land as alleged at trial.

80 It was not until the amended statement of claim was filed in November 2015 that Rodger Constructions first made allegations of conversations comprising the alleged agreement as presented at trial.[50] But even this pleading maintained the original agreement was reached in about August 2008. During closing submissions, Rodger Constructions sought leave to amend the statement of claim to allege that the agreement was reached 'between about August 2008 and July 2009', which leave was ultimately granted.[51]

Findings of fact, and credibility and reliability of key witnesses

81 The findings of a trial judge may reflect the advantage she or he derives from having seen and heard the witnesses give evidence. Although an appellate court can have no such advantage, it is still required to conduct a 'real review' of the evidence at first instance.[52] Accordingly, if there is something glaringly improbable, or contrary to compelling inferences, about the trial judge's evaluation of the probabilities then, notwithstanding the trial judge's advantage, an appellate court is required to make its own factual findings and formulate reasons based on those findings.[53]

82 Further, in some cases, it may be appropriate for an appellate court to interfere more readily with factual findings when they are based on no more than bare assertions of a witness, and are uncorroborated by contemporaneous evidence, and the witness who made the assertions has otherwise been properly and materially found by the trial judge to be less than a satisfactory witness.

83 When making general observations about the credibility and reliability of witnesses, the trial judge said:[54]

Both counsel in final submissions suggested that I should, in a case where witnesses' recollections were being taken back many years, assess their evidence not only by reference to their demeanour but also in light of the consistency of that testimony with the written record.

I am not prepared to make general adverse comments about any of the witnesses. However, each of them, at times, confidently related their recollection of a meeting or conversation about 7 or 8 years ago and yet had little or no memory of events which would ordinarily have had a similar importance or lack of significance. In the circumstances, I have carefully considered such evidence, and at times I have determined matters by indicating that, on the evidence I heard, I did not accept particular evidence of a witness or could not be satisfied on the probabilities as to what had occurred.

84 Although the trial judge did not make a finding that 'Rodger's evidence generally lacked credibility'[55] (emphasis added), when particular focus is placed on his evidence, there were numerous instances which demonstrated that much of Rodger's evidence lacked credibility or was otherwise unreliable. Commencing in mid-2008, Rodger said he could not remember a meeting at the offices of Rodger Constructions in July 2008 with Matthews, which the trial judge held occurred (as was conceded by Rodger Constructions' counsel in closing submissions).[56] Next, Rodger gave an extensive account of an alleged conversation in August 2008 with Matthews, which the trial judge found 'difficult to accept' and ultimately rejected.[57] Further, the trial judge found that Rodger's account of this alleged conversation 'perhaps too conveniently' fitted in with the contents of Woolcorp's Proposal.[58]

85 Rodger gave evidence of a conversation he had with Jenkins (who was not called to give evidence), some time after August 2008 and before November 2008, in which he alleged he discussed the cost of moving the Proposed East-West Road and told Jenkins 'that Woolcorp had offered to contribute to it'. Rodger also gave evidence that he discussed the costs with Jenkins as there were 'a lot of issues she had to redo'. The trial judge refused to accept this evidence, particularly 'as it [was] not independently supported (for example from [Jenkins] herself)'.[59]

86 Next, the trial judge found that Rodger's evidence concerning a meeting on 5 November 2009 (together with the evidence of Gleeson and Matthews) was unsatisfactory, due to his lack of recollection.[60]

87 Next, Rodger gave extensive evidence about an alleged meeting in around March to May 2010. The amended statement of claim alleged this meeting gave rise to a variation of an existing agreement with respect to Quarry Road.[61] According to Rodger, at the alleged meeting he and Gleeson specifically discussed the payment to be made by Woolcorp and the parties agreed to each paying half of the cost of Quarry Road.[62] No allegation of such a meeting was made by Rodger Constructions until 2015. Rodger suggested that this was because, until he reviewed the court book, he had mistakenly believed that the meeting occurred in 2008.[63] Upon an assessment of the evidence, and with reference to relevant correspondence, the trial judge concluded there was no proper basis to be satisfied that any conversation took place in early 2010 as outlined by Rodger. He also declined to find that Gleeson's denial of the conversation was made falsely.[64]

88 Next, the trial judge found that Rodger's evidence with respect to the conversation held on 14 May 2010 was generally unsatisfactory. The trial judge made the same observation with respect to the evidence of Gleeson.[65] In so doing, the trial judge rejected 'the explanations or amplifications given by both' Rodger and Gleeson.[66]

89 Moreover, with respect to the 14 May 2010 conversation, the trial judge specifically rejected Rodger's evidence about costings being raised. In so doing, the trial judge said the timing of the production of such costings by Titmus suggested Rodger 'was reconstructing or embellishing his evidence'.[67]

90 In summary, based on these unchallenged findings, Rodger could only be described as a generally unreliable witness, even if, as the trial judge found, he was not deliberately untruthful.

91 After affirming that there was no credible evidence to support Rodger Constructions' allegations concerning a varied agreement, the trial judge found that a contract was created by reason of the 'offer' contained in the 25 August 2008 Letter,[68] coupled with the fact that, by about November 2008, Rodger Constructions had agreed to relocate the Proposed East-West Road as requested (which was approved by the Council on 15 December 2008) and the fact that Rodger Constructions proceeded to construct Quarry Road on the southern boundary of the Martin Land. The trial judge found that the agreement was further evidenced by the subsequent discussions on 14 May 2010,[69] by which 'Gleeson reaffirmed Woolcorp's offer to contribute',[70] and by the later construction by Woolcorp of its own subdivision with allotments facing Quarry Road and connecting to adjacent services earlier installed by Rodger Constructions.[71]

92 In our view, the trial judge was in error in finding that the facts gave rise to a binding contract between Rodger Constructions and Woolcorp. There are a number of reasons for this.

93 Although the case advanced by Rodger Constructions did not rely on the contents of the 25 August 2008 Letter alone as constituting Woolcorp's offer, it is important to note that the 'offer' in the 25 August 2008 Letter to the Council was not, of itself, capable of acceptance so as to form a binding contract. The 'offer' was addressed only to the Council. In its terms, the letter did not state any offer was being made to Rodger Constructions. Neither the 25 August 2008 Letter nor the 27 August 2008 Email invited Rodger Constructions' acceptance. Rather, both pieces of correspondence referred to the 25 August 2008 Letter as a submission. Consistent with this position, the 25 August 2008 Letter concluded by seeking the Council's authority to implement these changes without any reference to Rodger Constructions.

94 Further, what was being 'offered' was far from clear. It was unclear whether the 'offer' was referring to any additional costs by reason of the relocation or costs that would have been incurred in any event. If the latter, the extent of the contribution remained unspecified.

95 Even assuming that the 25 August 2008 Letter, forwarded to Rodger Constructions on 27 August 2008, could amount to an offer that was capable of an acceptance which would have bound Woolcorp, the conduct of Rodger Constructions agreeing to relocate Quarry Road was a step taken after the Council had specifically requested Rodger Constructions consider such a relocation as part of the process of obtaining Council approval for the development plan.[72] At its highest, such conduct might be considered consistent with the terms of any alleged contract with Woolcorp, but it does not establish that Rodger Constructions accepted the offer and signalled that acceptance to Woolcorp.[73]

96 Like observations may be made with respect to the subsequent construction of Quarry Road in its ultimate location. Locating Quarry Road in an acceptable location was a requirement of the approval process, and the approved development plan. The planning process also required the construction to be done at the expense of Martin or Rodger Constructions.[74] Moreover, Rodger Constructions was entitled to be,[75] and in fact was, paid in full for the works by Martin. Again, while such matters are not inconsistent with a possible contract between Rodger Constructions and Woolcorp, they do not positively indicate the existence of any such contract.

97 For completeness, the pleaded case was that Quarry Road was constructed pursuant to the alleged agreement or, alternatively, in reliance on the request which 'comprised an email dated 27 August 2008'.[76] Rodger said under cross-examination that the relocation of Quarry Road by Rodger Constructions was not influenced at all by the request from the Council that Woolcorp's Proposal be adopted. The nature of this evidence is discussed below in the context of the restitution claim.[77] The point to be made here is that there was no evidence of any communication by Rodger Constructions to Woolcorp of any acceptance of, or reliance on, any request in Woolcorp's Proposal, either before the construction of Quarry Road commenced or at any proximate time after the commencement.

98 As to the subsequent events, the basis upon which the trial judge found that 'Gleeson indicated positively and without equivocation that Woolcorp would contribute to the construction costs of [Quarry Road]' on 14 May 2010[78] is far from clear.

99 Leaving aside the inherent unreliability of evidence of oral exchanges many years before trial,[79] once the evidence of Rodger concerning Titmus (which the trial judge did not accept)[80] is excluded, there was no direct evidence from either Rodger or Gleeson to the effect that Gleeson clearly stated Woolcorp would contribute. Further, Rodger expressly acknowledged Gleeson may have given the equivocal response of 'I suppose' and, when pressed, could only say that Gleeson did not give a negative indication that he would not pay for it.[81]

100 Moreover, the trial judge's finding that it was unlikely Rodger would have accepted an ambiguous and half-hearted response does not sit comfortably with the fact that Rodger Constructions had already commenced the construction of Quarry Road without any clear indication from Woolcorp as to on what basis it might contribute to the construction costs. As already noted,[82] the 25 August 2008 Letter is entirely unclear in that regard.

101 With respect to the final matter relied upon by the trial judge, the fact that Woolcorp later constructed its own subdivision with allotments facing Quarry Road and connected to the adjacent services does not establish that a contract had been agreed between Rodger Constructions and Woolcorp. As noted above,[83] Martin or Rodger Constructions were required to meet the costs of constructing Quarry Road in accordance with the approved plan in any event. Again, although this conduct and the later construction by Woolcorp of its subdivision were consistent with the possible existence of a contract, these acts do not positively demonstrate that a contract had been entered into. Such acts were also entirely consistent with each of Rodger Constructions and Woolcorp simply acting in accordance with the approvals granted by the Council.

102 Further, there are numerous matters which strongly indicate that no contract was ever entered into between the parties. As acknowledged by the trial judge,[84] the first letter seeking a contribution, sent in March 2011, did not allege any agreement and sought recovery through the Council's processes rather than directly from Woolcorp.[85] This was explained away by Rodger on the basis that he had not instructed his solicitors about the agreement with Woolcorp at that time.[86] Leaving aside the fact that the solicitors were not called to corroborate this evidence,[87] the failure to provide proper instructions in March 2011 does not explain correspondence sent by Rodger Constructions for more than a year after this time which failed to allege a binding agreement.[88] This includes correspondence 'seeking a commitment' sent by Rodger Constructions itself (as opposed to its solicitors).[89]

103 In conclusion, there was no evidence before the trial judge that would enable an objective bystander to conclude that Rodger Constructions had accepted an offer from Woolcorp, and that that acceptance had been signalled by Rodger Constructions to Woolcorp. This conclusion is reached without the need to consider the fact that a key person involved in the negotiations with the Council on behalf of Rodger Constructions for the relocation of Quarry Road, namely Jenkins, was not called to give evidence.[90]

104 Before leaving this issue, it is noteworthy that the case as pleaded throughout the trial was that the alleged agreement was 'made in or about August 2008'.[91] That allegation was contrary to the facts as found. However, towards the end of the trial, Rodger Constructions sought leave to amend to allege that the agreement was 'made between about August 2008 and July 2009'.[92] In our view, it is significant that, after the parties had closed their cases, Rodger Constructions was still unable to identify with any precision when it was said the alleged agreement was made.

105 In light of our conclusion that no contract was entered into, it is unnecessary to consider the grounds of appeal concerning the amount awarded pursuant to the alleged contract.

106 As there was no binding agreement between Rodger Constructions and Woolcorp, it is necessary to consider the validity of the alternative restitutionary claim.

107 There has been a long journey travelled, which continues to this day, in search of the proper characterisation, concepts and principles applicable to the law of restitution.[93] It is unnecessary to excurse on this journey or to explore where it may lead in order to determine the outcome of this appeal.[94]

108 With respect to a claim described as 'quantum meruit/work and labour done', the following allegations were made in the amended statement of claim:

(1) In 2008, Woolcorp requested that Rodger Constructions 'build [Quarry] Road on the boundary between (sic) the Martin Land and the Woolcorp Land, rather than at the proposed location further north' (as suggested in the SM Urban Plan).

(2) Woolcorp gained a benefit from the construction of Quarry Road on the southern boundary of the Martin Land by achieving a more advantageous layout for its development, having road access to the northern part of the Woolcorp Land without the need to construct a road, saving part of the cost of constructing such a road, and having the opportunity to bring forward stage 1 of the Woolcorp Land development, thereby achieving earlier sales and cash flow.

(3) Woolcorp designed its subdivision to take advantage of Quarry Road.

(4) In late 2013, Woolcorp commenced, or caused to be commenced, construction works for its subdivision.

(5) Woolcorp has used Quarry Road to gain access to the Woolcorp Land to carry out subdivision works, and has connected services for the eight lots facing Quarry Road, rather than having to build its own infrastructure on the Woolcorp Land and connect those lots to that infrastructure.

(6) By reason of the matters set out in subparagraphs (3) to (5) above, Woolcorp accepted the benefit of Quarry Road.

(7) In those circumstances, 'the receipt' of Quarry Road by Woolcorp 'constituted a benefit received at [Rodger Constructions'] expense by reason of which [Woolcorp] has been unjustly enriched'.

(8) It would be unconscionable for Woolcorp to deny that it was obliged to contribute to the construction of Quarry Road, and to receive the benefit without paying a reasonable contribution to the construction costs.

(9) By reason of matters alleged in subparagraphs (1) to (8) above, Woolcorp was indebted to Rodger Constructions for a reasonable contribution towards the costs of constructing Quarry Road 'as work and labour done or upon a quantum meruit'.

109 Broadly speaking, save for admitting the allegation in subparagraph (5), the substantive allegations referred to above were denied. In addition, Woolcorp's defence included the following:

(1) Quarry Road was constructed in accordance with the Council's requirements imposed upon Rodger Constructions with respect to the subdivision of the Martin Land, and not otherwise.

(2) Any work performed by Rodger Constructions was performed pursuant to the Development Agreement by which, upon completion, Rodger Constructions became entitled to payment for that work.

(3) Rodger Constructions had received payment for the work performed and was also seeking payment from Woolcorp for that work.

110 Each allegation set out in [108] (1) to (5) above was largely uncontroversial. Whether or not the 25 August 2008 Letter to the Council (which was forwarded to Rodger Constructions by the 27 August 2008 Email), amounted to an offer, it plainly was a request by Woolcorp to the Council to have Rodger Constructions move the Proposed East-West Road to the southern boundary of the Martin Land. Further, by this relocation Woolcorp intended to, and in fact did ultimately, gain a benefit by achieving a more advantageous layout for the Woolcorp Land d[95]elopment.95

111 In addition to these matters, the trial judge made a number of findings as the basis for his conclusion that Rodger Constructions would have been successful in its restitutionary claim had it not succeeded in its contract claim.

112 The trial judge found that: Woolcorp had been unjustly enriched by reason that it promised to contribute to the construction costs if Rodger Constructions relocated Quarry Road because it perceived that this would benefit Woolcorp; Rodger Constructions relocated Quarry Road and installed necessary services; and although Woolcorp did not redevelop the Woolcorp Land immediately, the relocated Quarry Road was likely to enhance Woolcorp's development of the Woolcorp Land, saving it the need of constructing a further east-west road and facilitating Woolcorp's connection to services.[96]

113 Those findings formed the basis of a conclusion that the law would treat as 'unjust' the enrichment or benefits 'Woolcorp gained from the construction of Quarry Road at the expense of Rodger Constructions in circumstances where the undertaking to contribute to the construction costs ... could not be enforced as a contractual obligation'[97] (emphasis added). In our view, there are a number of difficulties with this conclusion.

114 Before addressing these difficulties, we doubt it was necessary to make a finding on the issue of whether the construction of Quarry Road was at Rodger Constructions' expense in order to determine the restitutionary claim.[98] In fairness to the trial judge, this allegation was pleaded[99] and the parties joined issue on the matter.

115 In any event, if such an issue needed to be determined, the basis upon which it was found that the construction was 'at the expense of Rodger Constructions' was not stated. Rodger Constructions was not the owner of the Martin Land. Further, pursuant to the Development Agreement, at all times from 2004, Rodger Constructions was to be paid in full, on a commercial basis, for the planning, co-ordination and construction of all of the roads to be built on the Martin Land.[100] Far from being at its expense, Rodger Constructions stood to gain by the construction of the Proposed East-West Road whether it was constructed in the originally intended location or where it was actually constructed.

116 Further, if the above analysis is not correct in rejecting the finding that the work was performed at Rodger Constructions' expense, when the true nature of the request in Woolcorp's Proposal is considered, it is difficult to conceive how there has been a 'subtraction from the plaintiff's wealth' such that it could be said that the work performed by Rodger Constructions was 'at the plaintiff's expense'.[101] Woolcorp did not ask Rodger Constructions to construct a road that Rodger Constructions was not otherwise already committed to building or to expend more funds on constructing the road than would otherwise have been required. In these circumstances, it is not apparent that there was any subtraction from Rodger Constructions' wealth by constructing Quarry Road at the southern boundary of the Martin Land.[102]

117 With respect to the other part of the trial judge's conclusion, to describe the 'offer to contribute' as an 'undertaking' was to overstate Woolcorp's position. At the time, Woolcorp was providing a submission to the Council in what was then still a process of negotiation involving numerous parties.[103]

118 Whether or not it was necessary for Rodger Constructions to establish that the construction works had been performed at Rodger Constructions' expense, Rodger Constructions was required to establish that it performed the works pursuant to Woolcorp's request.

119 Like so many other parts of the case advanced by Rodger Constructions at trial, this aspect of the case depended upon Rodger's account as to the basis upon which Rodger Constructions acted. Importantly, there was no contemporaneous documentation or other corroborating evidence to support Rodger Constructions' contentions that it acted on Woolcorp's request. Further, Rodger gave no evidence of any discussion at any time before the construction of Quarry Road commenced, or of any actual decision made during that time, to the effect that Rodger Constructions was acting upon Woolcorp's request (on the understanding that it would receive a contribution towards construction costs) rather than the Council's request (as part of the planning process).

120 Further, when cross-examined on this point, in refuting the suggestion it was the Council's request to adopt Woolcorp's Proposal that resulted in Quarry Road being moved, Rodger stated, 'No, that wouldn't have influenced us at all'. Such an answer is reflective of the fact that Jenkins, rather than Rodgers, was the person involved in the negotiations with the Council after the 25 August 2008 Letter had been sent.[104]

121 Furthermore, from 25 August 2008 up to the time Rodger Constructions agreed to move the Proposed East-West Road, the correspondence between Jenkins and the Council, and between Jenkins and other officers of Rodger Constructions, made no suggestion whatsoever that there was any concern with the proposed layout in Woolcorp's Proposal with respect to Quarry Road, or that Quarry Road would only be moved on the basis of some contribution from Woolcorp.

122 For example, in an in-house email to Rodger and others on 1 September 2008, Jenkins referred to an email from the Council requesting a formal response in which she stated that 'we have no major concern about [Woolcorp's Proposal]'s layout' and only expressed concerns about 'the drainage issue'. In that email, Jenkins recommended that the drainage issue be brought to the Council's attention.

123 Consistent with this approach, on 2 September 2008, Jenkins stated in an email to the Council that, before Rodger Constructions formally responded, it wished 'to raise some items with you and Council's drainage engineer'. That email acknowledged that the 25 August 2008 Letter had been reviewed, and that it had given rise to certain 'comments and questions'. Then, Jenkins listed various items for discussion, none of which concerned the relocation of Quarry Road. On the contrary, the email concluded:

Aside from the above concerns, we are generally accepting of the revised plan in principle, in particular the east-west amenity link [ie Quarry Road] located in the centre of the site.

At the time this email was sent, there was no suggestion that Rodger Constructions had communicated any intention, to either the Council or Woolcorp, to act upon the request to the Council in Woolcorp's Proposal on the basis that Woolcorp would be making a contribution.

124 After this position had been adopted, there was no evidence of Rodger Constructions being anything other than 'accepting' of the relocation,[105] albeit the formal acceptance of the relocation did not occur until December 2008.[106]

125 On the issue of Woolcorp's contribution, there is one piece of correspondence from Jenkins, namely the email she sent to the Council on 17 November 2008,[107] that referred to a proposed discussion the following day concerning a contribution from Woolcorp. However, there was no evidence of any discussion on or about 18 November 2008 of any agreement or proposed agreement for Woolcorp to contribute to the construction costs of Quarry Road.[108] The highest the evidence got in this regard was that Woolcorp's Proposal was being used 'as the basis of discussion'.[109]

126 Jenkins was a witness who could have given evidence on this topic on behalf of Rodger Constructions. Jenkins was in Rodger Constructions' 'camp'[110] and, as noted above,[111] was not called. Her absence was not explained.

127 In these circumstances, it would be inappropriate to draw an inference that any form of agreement or understanding with Woolcorp was reached on 18 November 2008, or that any indication was given that Rodger Constructions' decision in early September 2008 to move the Proposed East-West Road was other than pursuant to the written request of the Council.[112] Rather, the proper inference is that the evidence of Jenkins would not have assisted Rodger Constructions.[113] Indeed, this inference must be drawn with respect to the negotiations that took place '[t]hroughout' September to December 2008.[114]

128 On the issue of the proper inferences to be drawn, the line of authorities commencing with Gould v Vaggelas[115] does not assist Rodger Constructions.[116] For the reasons stated,[117] not only did Rodger Constructions not enter into a contract, but when Woolcorp's Proposal is considered objectively,[118] the 'offer to contribute' was not a false statement[119] or a statement that was made with the intention of inducing Rodger Constructions to enter into a contract.

129 Furthermore, on appeal, Rodger Constructions' counsel accepted that Rodger Constructions had not established that, but for Woolcorp's Proposal, Quarry Road would not have been moved in any event. The case was put no higher than, if the request in Woolcorp's Proposal had not been made, the Proposed East-West Road may not have been moved.

130 Moreover, there was no evidence that the Council would have ever approved the Martin Land development if Rodger Constructions had persisted with its intention to build the Proposed East-West Road as indicated in the SM Urban Plan.

131 For completeness, we refer to Rodger Constructions' first letter seeking contribution for the construction costs of Quarry Road.[120] Whilst we acknowledge Rodger gave evidence that he had not instructed his solicitors about the alleged agreement at the time this letter was sent,[121] it is still of some significance that that letter, addressed to the Council, sought contribution on the basis that the construction of Quarry Road 'on the southern boundary of [the Martin Land] will, in future, provide benefit to the landowners contiguous with the property on the southern boundary'. There was no suggestion in the letter that Rodger Constructions had acted upon a request from Woolcorp or any other landowner of the Southern Land.

132 For Rodger Constructions to succeed, it was not enough to show that Woolcorp had received a benefit from Quarry Road's construction on the southern boundary of the Martin Land.[122] The onus was upon Rodger Constructions to demonstrate that the relocation was at the request of Woolcorp.[123] The matters set out above show not only that there was no evidence of this, but also that there was no basis to properly draw an inference to that effect.

133 The findings made with respect to causation mean that the judgment at first instance must be overturned. However, it is appropriate to make some observations about the benefits that were received by Woolcorp.

134 On the facts, it is not apparent why it would be unconscionable[124] or unjust[125] for Woolcorp to gain the benefits that it did in circumstances where Rodger Constructions was required to construct an east-west road in any event. This is particularly so where Quarry Road was constructed for Rodger Constructions' own benefit as part of its subdivision and there was no evidence of any additional costs to Rodger Constructions (or anyone else) in locating Quarry Road on the southern boundary of the Martin Land instead of at the original position.

135 Further, Woolcorp's Proposal was made as part of a planning process in objecting to Rodger Constructions (and Martin) proceeding with a subdivision as it was then proposed. Rodger Constructions acceded to the relocation of the Proposed East-West Road at the request of the Council in order to facilitate planning approval and, thereby, to gain the benefits that followed from that approval, without in any way communicating to Woolcorp before the commencement of construction how it intended, or even if it intended, to seek to recover a portion of the construction costs from Woolcorp.

136 In our opinion, if the above matters had been relevant,[126] they would not have assisted Rodger Constructions in its restitutionary claim.

137 On the question of quantum, not only were there benefits to be derived under the Development Agreement from obtaining planning approval for the Martin Land development (by way of direct payments for work done and a share in the potential net gains), but there was no evidence led by Rodger Constructions to contradict the position stated in Woolcorp's Proposal that Rodger Constructions (and Martin) would also gain an additional two parcels of land if it proceeded with Woolcorp's Proposal.[127] The Reasons do not appear to take this matter into account.

138 For the reasons set out above, the claims in contract and restitution cannot succeed. Accordingly, the grounds of appeal referred to in [5] above have been made out and the notice of contention has not been made out. Leave to appeal will be granted and the appeal will be allowed.

[1] Rodger Constructions Pty Ltd v Woolcorp Pty Ltd [2016] VCC 86 ('Reasons') [142] and [191].

[2] Reasons [152] and [169]-[171].

[3] P'Auer AG v Polybuild Technologies International Pty Ltd [2015] VSCA 42 ('P'Auer') [11] (Whelan JA, with whom Ferguson and Kaye JJA agreed in part). See also Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 [45] (Finkelstein J).

[4] P'Auer [2015] VSCA 42 [11], citing Adnunat Pty Ltd v ITW Construction Systems Australia Pty Ltd [2009] FCA 499 [39] (Sundberg J).

[5] As a matter of contract, silence itself cannot constitute acceptance: Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523, 527F (Kirby P) and 534D (McHugh JA, with whom Samuels JA agreed).

[6] P'Auer [2015] VSCA 42 [9].

[7] No restitutionary claim could be made if the plaintiff were entitled to claim as a matter of contract: Steele v Tardiani [1946] HCA 21; (1946) 72 CLR 386, 402.2 (Dixon J, with whom McTiernan J agreed).

[8] The statement of claim as originally filed included a claim under the Trade Practices Act 1974 (Cth). This claim included an allegation that Woolcorp knew Rodger Constructions was constructing Quarry Road in accordance with Woolcorp's request in the expectation that Woolcorp would contribute to the cost of the construction of Quarry Road. This claim was discontinued upon the filing of the amended statement of claim on 11 November 2015.

[9] Lumbers v W Cook Builders Pty Ltd (in liquidation) [2008] HCA 27; (2008) 232 CLR 635, 665-7 [86]-[90] (Gummow, Hayne, Crennan and Kiefel JJ).

[10] Ibid 666-7 [88]-[90]; see esp factor (f) in [88]. See also Hendersons Automotive Technologies Pty Ltd v Flaton Management Pty Ltd [2011] VSCA 167; (2011) 84 ACSR 93, 106 [60] (Tate JA, with whom Ashley and Neave JJA agreed).

[11] Reasons [5]. In addition to 50 percent of the construction costs, Rodger Constructions sought an amount with respect to the value of the land upon which the relevant part of Quarry Road was constructed: Reasons [176]-[186].

[12] See [17] below.

[19] As originally executed, the Development Agreement automatically came to an end if the Martin Land was not rezoned as residential or a planning permit had not been obtained within five years: cl 5.1.

[20] Although Woolcorp's Proposal was sent by Matthews alone, there was no issue at trial concerning his authority to bind Woolcorp. Indeed, the trial judge found it was more likely than not that Matthews had discussed the contents of the 25 August 2008 Letter with Gleeson before it was sent: Reasons [46]. See also [28] below.

[21] The 25 August 2008 Letter was also emailed to the Owens on 27 August 2008.

At a glance

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Judgment (283 paragraphs)

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Legislation Cited (2)

Cases Cited (17)