L Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) [1981] HCA 59

High Court of Australia Gibbs C.J. Stephen, Mason. Murphy and Aickin JJ. L Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) [1981] HCA 59

ORDER Appeal allowed with costs. Order of the Supreme Court of New South Wales (Court of Appeal) set aside and in lieu thereof order as follows:Appeal allowed with costs.Judgment of Waddell J. set aside and in lieu thereof give judgment for the plaintiffs in the sum of $173,938 with costs.

Cur. adv. vult.

The following written judgments were delivered:—

1981, Oct. 28 Gibbs C.J.

The appellant companies, the plaintiffs in the Supreme Court of New South Wales, claim that they sustained loss by reason of their reliance on erroneous information supplied to them innocently but negligently by the respondent, the Council of the City of Parramatta. The learned trial judge, Waddell J., found that the Council had been careless but that it owed no relevant duty of care to the appellants. He accordingly gave judgment for the Council although, following a very useful practice, he nevertheless proceeded to assess damages lest his decision as to liability should be reversed. He held that if he was in error on the question of liability the amount of damages to which the appellants would be entitled is $173,938. The Court of Appeal, by a majority, affirmed his decision dismissing the appellants' action [1] .

1. [1979] 1 N.S.W.L.R. 566.

On 21 May 1973 the appellants entered into a contract for the purchase of a property on the corner of Macquarie and O'Connell Streets, Parramatta. Settlement under the contract took place on 9 July 1973. The property was bought for the purpose of redevelopment. The appellants would not have concluded the purchase if they had known that the land would be substantially affected by road widening proposals which had been approved in principle by the Council in 1971. On 10 May 1973 their solicitor, Mr. Carroll, made a telephone call to the Council and inquired from an unidentified person in the town planning department whether there was any local road widening proposal affecting the land. He was told that there was not. On the following day he lodged with the Council a document, in a form prepared by law stationers, and commonly used, by which he made application for certificates under s. 160 and s. 342AS of the Local Government Act 1919 N.S.W., as amended, and for "Other information indicated under Remarks". Under that heading the question was asked, "Is the property affected or proposed to be affected by any of the following Road widening or re-aligning proposals?" The form showed as the purchaser one of the appellant companies, and stated that the purpose for which the information was required was "Conveyancing". Fees for the issue of certificates under s. 160 and s. 342AS were enclosed but no fee was sent for the additional information and none was customarily sent or required. In response to this application Mr. Carroll received a certificate under s. 342AS with respect to the matters prescribed by cl. 9 of Ordinance 107 as matters with respect to which a Council is authorized to issue certificates under s. 342AS. Those matters do not include the effect on the land to which the certificate relates of a proposed local road widening scheme which is not included in a prescribed scheme or a scheme in course of preparation; the local road widening proposals in the present case were not so included, and there was no obligation under s. 342AS or Ordinance 107 to include the information in a certificate issued under that section. However, Mr. Carroll believed, and in consequence the appellant companies believed, that the absence of any notation as to a local road widening proposal on the certificate indicated that there was no such proposal. His previous experience indicated that it was the practice of the Council, when it received a request for a certificate under s. 342AS and for additional information as to whether the property was proposed to be affected by road widening proposals, and when there was a relevant proposal, to type or write (usually in red ink) a reference to the proposal at the foot of the certificate, below the space left for answers to the questions as to the matters prescribed by Ordinance 107. During the period from 1970 to May 1973 he had received about eight such certificates and had seen at least two others sent to other solicitors. Evidence given by the Town Clerk of the Council showed that it was the practice of the Council to give information, other than that which the Council was authorized by s. 342AS to give, including information as to road widening proposals, both orally over the telephone and by indorsements on certificates issued under s. 342AS. An examination of the files of the Council revealed that about ten thousand certificates under s. 342AS had been issued during the period from January 1971 to July 1973, of which about six hundred and fifty had been indorsed with a reference to road widening proposals. The evidence abundantly supports the finding of the learned trial judge that it was the practice of the Council to answer inquiries as to the existence of any road widening proposals made by the use of the law stationers' form by making an appropriate indorsement on the certificate issued under s. 342AS if there was such a proposal. In the light of this practice Mr. Carroll was led to believe, by the absence of any such notation on the certificate which he received, that there were no relevant road widening proposals. Although the relevant proposals were not formally adopted until February 1974, there was little doubt, in May 1973, that they would be implemented and would seriously affect the subject land. The proposals were embodied in a plan in the Council's records. The Council had referred to them in certificates in relation to other land in the vicinity. There is no evidence which would explain the failure to make a similar reference in the certificate issued to Mr. Carroll.