Reported Decision : 223 FLR 406 New South Wales Supreme Court CITATION : Rosebanner Pty Limited v EnergyAustralia [2009] NSWSC 43 HEARING DATE(S) : 10, 11, 12, 13, 14, 17, 20 November and 9 December 2008 JUDGMENT DATE : 20 February 2009 JURISDICTION : Equity Division JUDGMENT OF : Ward J at 1 DECISION : Claims in trespass and for breach of contract dismissed. EnergyAustralia found to have engaged in misleading and deceptive conduct. No loss sustained by reason of that misleading and deceptive conduct. Claim dismissed. CATCHWORDS : ENERGY AND RESOURCES – electricity – electricity providers, authorities and undertakings – whether presence of electricity infrastructure on private land constituted trespass – whether infrastructure lawfully installed by Sydney County Council under Municipal Council of Sydney Electric Lighting Act 1896 and/or Public Works Act 1912 - whether EnergyAustralia had lawful authority to maintain presence of infrastructure under Electricity Supply Act 1995 – HELD – no trespass as infrastructure lawfully installed and maintained on land. - - CONTRACTS – general contractual principles – offer and acceptance - whether parties entered binding contract obliging EnergyAustralia to remove infrastructure – whether agreement reached by which parties intended immediately to be bound – HELD – no contract formed – no agreement reached – no objectively ascertainable intention immediately to be bound. - TRADE AND COMMERCE – Trade Practices Act 1974 (Cth) and related legislation – whether representation made as to future removal of infrastructure – whether representation in course of without prejudice settlement negotiations was made in trade or commerce – whether reasonable grounds existed for making of representation – whether any damage suffered by reason of the misleading and deceptive conduct – HELD – representation made in trade or commerce – no reasonable grounds for making representation – no damage suffered by reason of the misleading and deceptive conduct Crown and Other Roads Act 1990 Electricity Act 1945 Electricity Development (Amendment) Act 1987 Electricity Supply Act 1995 Electricity Supply Amendment (Protection of Electricity Works) Act 2006 Electricity Supply Amendment (Protection of Electricity Works) Bill 2006 Energy Legislation (Repeals and Savings) Act 1987 Energy Services Corporations Act 1995 Environmental Protection Agency Act 1979 Fair Trading Act 1987 LEGISLATION CITED : Gas and Electricity Act 1935 Local Government Act 1919 Post and Telegraph Act 1901 Postal and Telecommunications Commission- (Transitional Provisions) Act 1975 Public Roads Act 1902 Public Works Act 1912 Roads Act 1993 State Owned Corporations Act 1989 Sydney Electricity Act 1990 Sydney Water Act 1994 Trade Practices Act 1974 (Cth) Telecommunications Act 1975 CATEGORY : Principal judgment Air Great Lakes Pty Limited v K S Easter (Holdings) Pty Limited (1985) 2 NSWLR 309 Airtourer Co-operative Limited v Millicer Aircraft Industries Pty Limited [2004] FCA 948 Allen v Tobias (1958) 98 CLR 367 Australian Competition & Consumer Commission v Danoz Direct Pty Limited (ACN 003 546 709) [2003] FCA 881 B Seppelt & Son Limited v Commissioner for Main Roads (1975) 1 BPR 9147 Barrier Wharfs Limited v W Scott Fell & Co Limited (1908) 5 CLR 647 Baulkham Hills Private Hospital Pty Limited v G R Securities Pty Limited (1986) 40 NSWLR 622 Bentley v Nelson [1963] WAR 89 Bill Acceptance Corporation Limited v GWA Limited (1987) 50 ALR 242 Brighton v Dungog Municipal Council (1943) 15 LGRA 74 Callister v Bischoffsheim (1870) LRJ QB 449 Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594 Cummings v Lewis (1993) 41 FCR 559 Cutts v Head [1894] Ch 290 Delany v Tenison (1758) 3 Bro PC 659; 1 ER 1559 Dialog Pty Limited v Addease Pty Limited [2003] FCA 1359 Dinyarrak Investments Pty Limited v Amoco Australia Limited (1982) 45 ALR 214 Elders Trustee and Executors Company Limited v E G Reeves Pty Limited (1987) 78 ALR 193 Field v Commissioner for Railways for New South Wales (1957) 99 CLR 286 Film Bars Pty Limited v Pacific Film Laboratories Pty Limited (1979) 1 BPR 9251 G R Securities v Baulkham Hills Private Hospital Pty Limited (1986) 40 NSWLR 631 Gallen v Strathfield Municipal Council [1971] 1 NSWLR 122 Global Sportsman Pty Limited v Mirror Newspapers Pty Limited (1984) 2 FCR 82 GPI Leisure Corporation v Yuill (1997) 42 NSWLR 225 Grater v City Mutual Life Assurance Society Limited (1986) 160 CLR 1 Gray v Haig (1854-1855) 20 Beav 219; 52 ER 587 Hooker Corp Pty Limited v Hornsby Shire Council (NSWLEC 2 June 1986) Industrial Equity Limited v Deputy Commissioner of Taxation (1990) 170 CLR 649 Kenstrom Design Pty Limited v Mosman Council [2008] NSWLEC 1428 Kevin Snell Pty Limited v Manly Council [2004] NSWLEC 567 Knox County v Ninth National Bank 147 US 91 Levenstrath Community Association Inc v Tomies Timber (2000) 108 LGERA 176 Lucent Technologies Inc v Krone Aktiengesellschaft (No 3) [2000] FCA 100 Lyndel Nominees Pty Limited v Mobil Oil Australia Limited (1997) 37 IPR 599 Macquarie Developments Pty Limited and Anor v Forrester and Anor [2005] NSWSC 674 CASES CITED : McDermott v Black (1940) 53 CLR 161 McLean Bros & Rigg Limited v Grice (1906) 4 CLR 835 McPhillips v Ampol Petroleum (Vic) Pty Limited (1990) ATPR 41-014 Mills v Selby [1971] VR 836 Minister for Natural Resources v New South Wales Aboriginal Land Council (1987) 9 NSWLR 154 Moorna Constructions (NSW) Pty Limited v Denmatu Pty Limited (1998) ATPR 41-616 Municipal Council of Sydney Electric Lighting Act 1896 Murphy v Overton Investments Pty Limited (2004) 204 ALR 26 North Shore Gas Company v Commissioner of Stamp Duties (1940) 63 CLR 52 NWR FM t/a North West Radio v. Broadcasting Commission of Ireland & Anor [2004] IEHC 109 Pan Pharmaceuticals v Australian Naturalcare (2008) 165 FCR 230 Permanent Trustee Co of New South Wales v Campbelltown Corporation (1960) 105 CLR 401 Pertzel v QLD Pawlownia Forests Limited & Anor [2008] QCA 287 Port Stephens Shire Council v Tellamist Pty Limited (2004) NSWCA 353 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Proprietors of SP 13318 and 13555 v Lavender View Regency Pty Limited 91997) 97 LGERA 337 Quad Consulting Pty Limited v David R Bleakley & Associates Pty Limited, (1990) 27 FCR 86 Quirindi Shire Council v Gigli (1985) 3 NSWLR 178 R T & Y E Falls Investments Pty Limited v The State of New South Wales & ors [2001] NSWSC 1027 Rodgers v Rodgers (1964) 114 CLR 608 Rush & Tompkins v Greater London Council [1989] AC 1280 Seamez v Mclaughlin [1999] NSWSC 9 Spencer v The Commonwealth (1907) 5 CLR 418 Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 Stockland (Constructors) Pty Limited v Retail Design Group (International )Pty Limited [2003] NSWCA 84 Sykes v Reserve Bank of Australia The Ophelia [1916] 2 AC 206 The Owners of St John's Court Rivervale Strata Plan 6052 v Western Australian Planning Commission and Ors [2004] WASC 196 Thompson v Australian Telecommunications Commission (Hodgson J unreported, 18 July 1988; BC 8801729) Tomlin v Standard Telephones and Cables Limited [1969] 1 WLR 1378 Walker v Wisher (1889) 23 QBD 335 Weber v Ankin (2008) 13 BPR 25,231 Wheeler Grace & Pierucci Pty Limited v Wright (1989) ATPR 90-940 Wigan v Edwards (1973) 1 ALR 497 Winter Property Group v North Sydney Council [2001] NSWLEC 46 WJ Green & Co (1984) Pty Limited as Trustee for the W J Green Family Trust v Wilden Pty Limited as Trustee for the Baga Bazaar (1985) Unit Trust (Parker J, WASC, 24/4/1997, unreported) Wright v TNT Management Pty Limited (1989) 15 NSWLR 679 TEXTS CITED : Mozley and Whitley's Law Dictionary The Law Affecting Valuation of Land – Hyam – 3rd Ed Rosebanner Pty Limited (First Plaintiff) PARTIES : Twenty-First Century Properties Limited (Second Plaintiff) Energy Australia (Defendant) FILE NUMBER(S) : SC 1144 of 2004 COUNSEL : J Webster SC with him M Green (Plaintiffs) M Leeming SC with him C Withers (Defendant) SOLICITORS : Stephen Wawn & Associates (Plaintiffs) Clayton Utz (Defendant) - 26 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION WARD J FRIDAY 20 FEBRUARY 2009. 1144/04 ROSEBANNER PTY LIMITED & ANOR V ENERGYAUSTRALIA JUDGMENT 1 In these proceedings the plaintiffs ("Lyons entities") seek damages and other relief in relation to the presence, over the period of their ownership of certain land in Woolooware, of electricity infrastructure on that land. 2 Initially, the claim by the Lyons entities was limited on the pleading to a claim for damages for trespass to land arising out of the alleged unlawful nature of the electricity infrastructure as installed on the subject land. Subsequently, the pleading was amended to include claims for breach of an alleged agreement on the part of the defendant ("EnergyAustralia") to remove the electricity infrastructure within a particular period of time and, for misleading or deceptive conduct and/or false or misleading representations by EnergyAustralia, in contravention of the Trade Practices Act 1974 (Cth) or, alternatively, the Fair Trading Act 1987 (NSW), relating to the removal of the electricity infrastructure. (Senior Counsel for the Lyons entities (Mr Webster SC) made clear during the course of the opening submissions that no claim is made for negligent misrepresentation at common law.) 3 The Lyons entities have invoked s 51A of the Trade Practices Act and s 41 of the Fair Trading Act in relation to the alleged representations. 4 EnergyAustralia denies each of the claims. In summary, it is contended that the trespass claim fails because there is a defence of lawful authority; that the contract claim fails because there was no contract; and that the misleading and deceptive conduct claim fails because the alleged representations were not made (and, even if they were, they were not made in trade or commerce and there were reasonable grounds for making the representations at the time). EnergyAustralia further says that, even if any of the claims were to succeed, the Lyons entities have suffered no loss. Summary 5 For the reasons set out below, I have concluded that the Lyons entities have not made out their claims in trespass or for breach of contract, but have established that there was misleading and deceptive conduct in relation to a representation made by EnergyAustralia by letter dated 11 July 2003 to the effect that the electricity infrastructure would be removed in early September 2003. 6 I am not satisfied that any loss was sustained by reason of that misleading and deceptive conduct. 7 Therefore, unless there is any utility in making a declaration as to the misleading or deceptive conduct, the appropriate course is to dismiss the claim by the Lyons entities. Facts 8 The trespass claim necessarily involves an analysis of the historical background to the creation of the subject land and the powers of the entity (Sydney County Council) which first installed the electricity infrastructure on that land and of the entity (EnergyAustralia) in which ownership of the infrastructure was ultimately vested. I will therefore confine my initial outline of the facts to those which are relevant to those matters and I will turn later in these reasons to the more general factual background which is relevant to the contract and representation claims. The subject land 9 The subject land is comprised of Lots 1234 and 1235 in DP 822258 ("Lots 1234/5"). 10 In about late 1982 or 1983, when the electricity infrastructure was installed, the subject land formed part of what was then the unformed Bate Bay Road, an area roughly at right angles to, and to the east of, the then unformed Woolooware Road North. 11 In 1954, pursuant to a resolution made on 22 February 1954, the Sutherland Shire Council ("the Council") resumed land, including the land identified on DP 109853 as Bate Bay Road together with land immediately to its north, for the purpose of widening and extending as a public road Captain Cook Drive. Notice of the resumption was gazetted in the New South Wales Government Gazette No 125 dated 13 August 1954 pp 2526-2527 (Ex 22 tab 7). 12 Endorsed on DP 109853 (Ex 22 Tab 8) was the following declaration by the Shire Clerk and the President of the Council: The Common Seal of the Council of the Shire of Sutherland was herewith affixed in pursuance of a resolution of the Council dated 22nd February 1954 to denote the acceptance of the road shown on this plan as a public roadway". 13 The status of the subject land (in particular, whether the unformed Bate Bay Road was a public road) is relevant when determining the source of any statutory power to install electricity infrastructure thereon. There is nothing to suggest that the status of the subject land changed between 1954 and 1982/1983. Both parties submitted at various times in the hearing that by 1982/83 the land constituting the unformed Bate Bay Road was a public road (EnergyAustralia's closing written submissions, para 4, the Lyons entities opening submissions para 7). Certainly, as at the time the road was formally closed in 1992, the logical inference to be drawn was that the road had at some stage before then been opened as a public road. 14 The significance of the issue only emerged during the course of the hearing, insofar as reliance was placed on s 80 of the Public Works Act for the installation of the infrastructure having regard to the requirement of s 86 of that Act. Perhaps as a result, I did not have the benefit of closely reasoned submissions on this issue 15 At common law, a public road has been said to be a road that has become public by reason of dedication and acceptance: Permanent Trustee Co of New South Wales v Campbelltown Corporation (1960) 105 CLR 401. However, if Bate Bay Road was opened after the Local Government Act 1919 came into force, the status of the road (as public or otherwise) will be governed by the operation of that Act. 16 White J explained the effect of that legislation in Weber v Ankin (2008) 13 BRP 25,231: Part IX of the Local Government Act 1919 came into force on 1 July 1920. Section 237 (in Pt IX) and s 323 (in Pt XII) forbad the opening of new public roads except in accordance with the provisions of the Act. Existing public roads (a defined expression which included roads the public was entitled to use), other than a main road, were vested in the councils. 17 The questions which arise from this are whether the road was opened after the Act came into force (if it opened before, the declaration by the Council of acceptance of the road as a public roadway would be sufficient for the purposes of the common law) and whether what happened in 1954 amounted to a road opening or realignment of an existing road. 18 Section 327 of the legislation, as it stood in June 1954, set out in detail the procedure to be followed for the opening of a public road, including the making of an application under the act, certification by the town or shire clerk as to compliance with the requirements of the Act and registration of a plan of the road (such plan to include a notation of approval under the seal of the council). 19 Section 336 provided that as soon as the plan of any road or of any subdivision containing a road had been registered in the office of the Registrar-General as prescribed, the road was deemed to be opened as a public road and thereby to be dedicated accordingly. 20 There is no evidence as to whether the procedure for opening a road was followed in respect of Bate Bay Road in 1954. The endorsement on DP 109853 suggests on one view that it may have been as it refers to the affixation of the Council's seal and, read with the notice of resumption gazetted in August 1954, makes it clear that the Council was "accepting" the dedication of the resumed Bate Bay Road for use as a public road. 21 The Local Government and Conveyancing (Amendment) Act 1964 amended a number of the provisions dealing with public roads and introduced a new s 323 which included: (3) Where a. any instrument registered in the office of the Registrar-General before the commencement of the Local Government and Conveyancing (Amendment) Act 1964, purports to dedicate any land for use as a public road; b. such instrument was accepted in writing by or on behalf of the council of the area in which the land was situated; and c. the provisions of s 327 were not complied with in relation to the opening of such road, such dedication shall neither be, nor be deemed ever to have been, invalid by reason only of the failure to comply with the provisions of the said s 327. 22 Accordingly, at least as from 1964, whether or not there had been compliance with the procedures specified under s 327 of the Act for the purposes of creation of a public road, a dedication by way of endorsement on a deposited plan of Council's acceptance of a road as a public road would have had effect. 23 It is not clear, however, whether what happened in 1954 was the "opening" of a road or the "realignment" of an existing road. The August 1954 gazettal in its terms effected a resumption of land in pursuance of the Local Government Act for the express purpose of "widening and extending a public road". 24 It would seem that this was pursuant to s 536 of the Local Government Act which read as follows: 1. The council may, from time to time, with the approval of the Governor, cause a notice of the resumption or appropriation of any land, together with a description of such land, to be published in the Gazette and in a newspaper circulating in the area in which the land is located. 2. A plan of such land showing, as far as can be ascertained, the separate parcels thereof, and the names of the owners of the separate parcels, shall be filed by the council in the office of the council and a copy of the plan shall be lodged with the Surveyor-General at the Department of Lands, Sydney. Such plans shall be open for public inspection. 25 I note that although s 262 provided a method by which a realignment of a public road might be carried into effect in order to widen the road (either by the acquisition of land under the Act, or under the provisions of s 262 relating to the realignment method of acquiring land, or by a combination of these methods), it seems clear that the process for road realignment or widening itself was one which was governed by s 28 of the Public Roads Act 1902. 26 In Kevin Snell Pty Limited v Manly Council [2004] NSWLEC 567, Pain J stated: … that it is the Public Roads Act 1902 which is directed to the process of road widening itself while the Local Government Act 1919 is directed to the method whereby the Council will acquire the affected land to give affect to the road widening. 27 Of relevance, in this regard may be s 262(7) which provided that, notwithstanding the provisions of the Public Roads Act, the land between the old alignment and the new did not form part of the road until the council has acquired title to such land, or a dedication thereof as a public road had been effected. 28 I am not aware of any formal notification of proposed realignment or subsequent approval thereof in respect of Bate Bay Road, at least going back to notices gazetted from April 1973. However, whether there was compliance with any realignment procedures probably does not affect the conclusion that the resumption notified on 13 August 1954 (whether it constituted a road opening as such or whether it was simply a resumption pursuant to s 262(6) of the Act) seems to have been dedicated or accepted by the Council for use as a public road by virtue of the declaration endorsed on DP 109853. 29 In 1973 part of Woolooware Road North became dedicated as a public road. In their reply filed to the defence to the second further amended statement of claim, the Lyons entities refer to this dedication as a dedication of Bate Bay Road and as including the subject land, noting that the dedication was limited to the surface of the land and 20 metres below that surface (and they submitted that at that stage the subject land fell under the care of the local Council under the Public Roads Act and subsequently under the Crown and Other Roads Act 1990 and Roads Act 1993). However, the 1973 dedication in its terms relates only to the unformed Woolooware Road North, not to that part of the Crown land (Bate Bay Road) which had been resumed in 1954 (Government Gazette No 28 dated 2 March 1973 Folio 700). I do not understand the Lyons entities to have pursued this part of their initial submissions. 30 The Department of Lands (with its successors referred to in these reasons as the "Department") appears to have regarded it as "an unformed … non public road" (See Ex AB p 59) and, immediately prior to the closure of Bate Bay Road on 6 March 1992, (pursuant to the Public Roads Act), it was described by the State's Regional Director as a "non-public Crown road" (See Ex 23 p 7), 31 However, on the evidence before me (by reason of the acceptance by the Council of its dedication to public use) from the time of its resumption by the Council in 1954, Bate Bay Road (and hence as at 1982/3), the unformed Bate Bay Road was a public road. 32 A notification of Proposed Closing of Bate Bay Road was made in Government Gazette No 41 dated 23 March 1990, and the road closure notification itself was subsequently gazetted on 6 March 1992 (see Ex 23 pp 133-135). It is not disputed that the consequence of the closure of Bate Bay Road in March 1992 was that the land was "freed and discharged from the rights of the public or any person thereto as a highway" and became Crown land (Section 20(2) Public Roads Act). 33 Lots 1234/5 were subsequently created when a plan of subdivision in deposited plan 822258 was approved by the Minister's delegate on 9 May 1994 (Ex A1 tab 3). Adjacent to Lots 1234/5, but created at an earlier time, is Lot 1 in DP226835 ("Lot 1"). Lot 1 was acquired by the Lyons entities in about 1993 and sold (by way of mortgagee sale) in 1998. 34 Lots 1234/5 were acquired by the Lyons entities in 1998 and sold (again at the instigation of the mortgagee, though ultimately not as a mortgagee sale) in 2004. 35 The sale of Lots 1234/5 to the Lyons entities by private treaty without public competition was recommended by the Department on the basis that "… having regard to the restrictions imposed by LEP 151 and the limited visibility from Captain Cook Drive, development of this area, other than in conjunction with the adjoining freehold land [Lot 1], does not appears to be a viable option". (Ex AB p 59). (That memorandum noted that the building line for any development of that land was limited to "30 metres from the present riparian boundary".) Relevant Powers · 1982 36 There is no dispute that the electricity infrastructure (identified as poles 27, 27A and 27B) was installed on the subject land in either late 1982 or 1983 by Sydney County Council. Mr Newland, an engineer with EnergyAustralia, gave evidence that Sydney County Council's practice in 1982 was to locate overhead power lines along roads. 37 Relevantly, at that time Sydney County Council had the powers conferred on the Municipal Council of Sydney by the Municipal Council of Sydney Electric Lighting Act 1896, ss 27, 31 and 32 ("the 1896 Act") (see Gas and Electricity Act 1935, s 51(1)) as well as powers under s 382 and s 383 of the Local Government Act 1919. 1896 Act 38 Section 14 of the 1896 Act gave Sydney County Council power to: open and break up the soil and pavement of any street … and place under or over any street any electric line; and from time to time repair, alter or remove the same … and may in any such street erect any posts, pillars … and other works, and do all other acts which they may from time to time reasonably deem necessary for supplying electricity. provided that: nothing herein shall authorise or empower the Council to construct or place any works … in … any … land not dedicated to public use without the consent of the owners and occupiers thereof, except that the Council may at any time make entry, and construct and place any new works instead of such works as shall have been lawfully constructed or place and may repair or alter any works so constructed or placed. 39 "Street" was defined as "any square, court, alley, highway, lane, road, thoroughfare or public place or passage". As at 1982/1983, the then unformed Bate Bay Road (designated as a road on DP 109853) fell within the definition of "street" in the 1896 Act. Having been resumed by the Council for use as a public road, there was no requirement under s 14 for owner/occupier consent to any electricity works thereon. 40 The power under s 14 was subject to s 18, which required that one month's notice be given to various statutory authorities. In this regard Mr Newland, gave evidence that a notification plan (NP T0010) for the works in 1982 was prepared and discussed with Sutherland Shire Council officers, although a copy of the notification plan was not able to be located (see Mr Newland's affidavit sworn 11 November 2008 and Annexures B and C). Public Works Act 41 Turning to the powers applicable by reason of the Local Government legislation, clause 4B of Ordinance 20 of the Local Government Act provided that: (a) sections 106(1) (d), 110, 382-384 , 386, 416-417B; and (b) sections 418 and 419(1) (except to the extent to which they are inconsistent with the provisions of the Electricity Act 1945); and (c) sections 419A, 420(1), 422, 500(1), 500, 501, 502, 506A, 506E and 512B. 512G, apply to County Councils that are electricity councils within the meaning of the Electricity Act 1945 in the same way as they apply to Councils. (my emphasis) 42 Relevantly, those powers were as follows: 382 (1) Subject to this Division, the Council may construct, extend, protect, maintain, control, and manage - (a) works of water supply or sewerage or drainage and any works incidental thereto; and (b) works in connection therewith or separate therefrom for the supply of electricity : and 383 (1) For the purpose of investigating, preparing for, constructing, extending, protecting, or maintaining any works under this Part , and for the purpose of repairing any damage caused thereby, the Council shall have the powers conferred by Division 6 of Part VI of the Public Works Act, 1912, upon a constructing authority in addition to the powers conferred by this Act. (my emphasis) 43 Under ss 383(2) and (3), compensation was payable for any damage caused in the exercise of those powers. 44 Section 80 of the Public Works Act 1912, made applicable to Sydney County Council by s 383(1), provided that a constructing authority (of which Sydney County Council was one): (a) may enter into and upon the lands and grounds of any person whomsoever and ... take or appropriate, for the purposes herein mentioned, such parts thereof as may be necessary and proper for the laying out, making and using any public work, and all other works, matters and conveniences connected therewith, … (i) and generally may do all other acts necessary for constructing, reconstructing, making, maintaining, altering, repairing, adding to, extending, and using such public work 45 Section 86 of the Public Works Act required approval by the Governor for any work "crossing any public highway or carriage road". There was no evidence of any such approval. 46 It is submitted by EnergyAustralia that the key difference between the two sources of power (ie between s 14 of the 1896 Act and s 80 of the Public Works Act) was that, under the latter, the landowner had a right to compensation. The relevance of a right to compensation arises where land is privately held, since in Brighton v Dungog Municipal Council (1943) 15 LGRA 74 the court recognised that s 382 of the Local Government Act did not authorise encroachment on private land and held that s 80 (which did authorise the construction and maintenance of works on private land), only did so subject to the liability to pay compensation. 47 In Gallen v Strathfield Municipal Council [1971] 1 NSWLR 122, the Court of Appeal confirmed that: by virtue of s. 383, … for the purpose of constructing and maintaining sewerage and drainage pipes, which works the council has power to do under s. 382, provided it has duly authorized such work, then the council and its servants have the right by virtue of s. 80 of the Public Works Act to enter private land and to construct and maintain such work without first resuming an easement. The exercise of such rights is subject to a liability of the council to pay compensation. 48 In Quirindi Shire Council v Gigli (1985) 3 NSWLR 178 the Court of Appeal declined to reconsider Brighton and Gallen. 49 It was pointed out by EnergyAustralia that the compensation provisions of the Local Government Act did not give subsequent landowners (such as the Lyons entities) a right to compensation in respect of works for the supply of electricity which had earlier been constructed on private land (those subsequent owners buying the land subject to, and presumably at a price reflective of, the affectation). Authority for that proposition can be found in The Owners of St John's Court Rivervale Strata Plan 6052 v Western Australian Planning Commission and Ors [2004] WASC 196, where it was said, in relation to the particular resumption of land in that case, that: Any interest in the land resumed, including common property, was, by fact and virtue of the compulsory acquisition, converted immediately to a right to claim compensation for the compulsory acquisition so changing in character from an interest in land, or a proprietary interest, to a personal claim for money, by reason of s 18(2) of the Land Acquisition and Public Works Act. See also Fletcher v Ashburner (1779) 1 Bro CC 497; 28 ER 1259 and Brown v Heffer (1967) 116 CLR 344. This conversion of a proprietary interest to a personal right therefore affects any succession to the rights of a former unit proprietor. For example, a subsequent sale or disposition of his or her title to the unit by a former proprietor will only convey the interest in the land and not this personal entitlement to compensation (subject of course to any express provision to the contrary in the agreement for sale). · 1987 50 The 1896 Act (as also was the Gas and Electricity Act 1935) was repealed by the Energy Legislation (Repeals and Savings) Act 1987 (NSW) with effect from 26 June 1987. 51 Sub-section s 7F(4) of the Electricity Development (Amendment) Act 1987 deemed that the power to supply electricity and the functions under s 382 of the Local Government Act to construct, extend, protect, maintain, control and manage works for the supply of electricity were delegated to Sydney County Council. Clause 3, Schedule 2 of the Energy Legislation (Repeals and Savings) Act 1987 provided that "the new Council is a continuation of, and the same legal entity as, the old Council". · 1990 52 Pursuant to the Sydney Electricity Act 1990, Sydney County Council became Sydney Electricity ("Sydney Electricity") as at 18 December 1990. 53 Sydney Electricity was given the function of "the provision and maintenance of works for the supply of electricity" and the powers to acquire or build, and maintain and dispose of, any buildings, plant, machinery, equipment or vehicles (Sydney Electricity Act ss 51(1)(b) and 6(1)(c)). All assets, rights and liabilities of the former Sydney County Council vested in Sydney Electricity (Sch 5, cl 4(1)(a) and (b)). 54 Pursuant to s 32 of the Sydney Electricity Act, Sydney Electricity was expressly given the authority to enter land for the purposes, inter alia, of installing property of the Authority: 32. For the purposes of, and subject to this Act and the regulations, an authorised person may enter on any land or buildings at all reasonable hours for the purposes of (a) installing, removing, reading or adjusting any electricity metering equipment or other property of Sydney Electricity, or (b) checking if Sydney Electricity's conditions relating to tariffs and to the use of electricity are being complied with. (my emphasis) 55 In its terms s 32 is not limited to the installation of electricity metering equipment, and would seem to permit the installation of other electricity infrastructure, (unless it could be suggested that "other property" should be constructed ejusdem generis with the preceding words "electricity metering equipment"). 56 Pursuant to s 38(1), Sydney Electricity had an obligation to compensate for damage caused by it in the exercise of its powers under s 32, as follows: 38(1) Sydney Electricity must compensate all interested parties for any damage caused by it under this Part, other than damage arising from work done for the purpose of an inspection. 57 Sub-section 38(2) further provided that: In the case of land of which temporary possession has been taken or use is made, the compensation may be a gross sum or a rent. 58 Section 42 of the Sydney Electricity Act contained a power similar to that in s 14 of the 1896 Act. 59 Significantly, after the passage of the Sydney Electricity Act, ordinance 20 of the Local Government Act did not apply to Sydney Electricity. The Lyons entities place considerable weight on this fact and say that even if (which they deny) the electricity infrastructure was lawfully installed in 1982, there was, after 18 December 1990, no right on the part of Sydney Electricity to "maintain" (in the sense of "to leave on the land") on private land any structures which had previously been installed. · 1995 60 The assets, rights and liabilities of Sydney Electricity were transferred to MetNorth Energy ("MetNorth") on 1 October 1995 by order made under s 53A(2) of Sydney Electricity Act. MetNorth was an entity constituted under the Electricity Act 1945. · 1996 61 Subsequently, another MetNorth entity ("MetNorth Energy") was constituted under the Energy Services Corporations Act 1995 and on 1 March 1996 the assets, rights and liabilities of MetNorth as constituted under the Electricity Act were transferred to the new MetNorth Energy as constituted under the 1995 legislation by order made under that Act. 62 One of the "principal functions" of MetNorth Energy was "to establish, maintain and operate facilities for the distribution of electricity and other forms of energy": Energy Services Corporations Act, s 9(2). 63 Section 51 of the Electricity Supply Act 1995 vested ownership of electricity works in MetNorth Energy, even if it was not the owner of the land to which they were affixed. 64 MetNorth Energy changed its name to EnergyAustralia on 2 March 1996. EnergyAustralia is a statutory state owned corporation as specified in Schedule 5 to the State Owned Corporations Act 1989, as amended by the Energy Services Corporations Act 1995. 65 The powers of EnergyAustralia were governed by the Electricity Supply Act, which included, relevantly: 45. Erection and placement of electricity works (1) This section applies to work connected with the erection, installation, extension, alteration, maintenance and removal of electricity works. (2) For the purpose of exercising its function under this or any other Act or law, a network operator: (a) may carry out work to which this section applies, and (b) in particular, may carry out any such work on a public road or public reserve. … 60 Compensation The network operator or retail supplier concerned must pay compensation to the owner or occupier of any land in respect of which a power has been exercised under this Division for any loss or damage arising from the exercise of the power, but is not so liable to the extent to which the loss or damage arises from work done for the purposes of an inspection which reveals that there has been a contravention by the owner or occupier, as the case requires, of any provision of this Act or the regulations. 66 Section 45 of the Electricity Supply Act therefore expressly authorised the "maintenance" (as well as installation) of electricity works; and was not in its terms confined to works on public land. (The reference in s 45(4), which, I have not set out, to "maintenance works" must mean maintenance in the sense of repair or upkeep, rather than in the sense of leaving something in place. However, s 45(1) is not necessarily so limited and could on its face encompass either meaning). 67 Mr Webster noted that the provisions of s 60 of the Electricity Supply Act do not mirror the compensatory provisions of the Public Works Act. Under the Public Works Act, among other things, the constructing authority which took temporary possession of lands by virtue of the powers granted under Part 6 of the Act, was obliged to pay rent during its occupation of the land (s 84(b)) as well as compensation for any damage sustained of a temporary or permanent nature by reason of the occupation in accordance with ss 84(a) and (c). 68 As I understand his submission, Mr Webster argues that because there are no "real" compensatory provisions in the 1995 legislation mirroring those of the Public Works Act, the reasoning in Brighton and Gigli cannot apply to that legislation (and hence the court should conclude that the 1995 legislation did not permit the presence on private land of electricity infrastructure, whether or not that infrastructure had originally been lawfully installed). 69 The difference, relevantly, seems to be between the lack of a provision in the 1995 legislation for the payment of any rent or occupation fee while the land was occupied by the electricity infrastructure. To the extent that the presence of the infrastructure precluded (as the Lyons entities contend) any use of the land by way of on-lease or development, this might seem to be a distinction without substance (as the loss of rental opportunity, would surely fall within the compensation for which a claim could be made under s 60 of the Electricity Supply Act). The only substantive difference would seem to be that compensation by way of rental would not be payable under the later legislation to a subsequent landowner, (perhaps for the reason that it presumably acquired the land on notice of the affectation). 70 Mr Webster submitted that the continued presence of the electricity infrastructure on the subject land after 1995 (even if its original installation in 1982/3 was lawful, and, presumably, whatever the position after 1990) became and/or remained unlawful without an easement or other lawful authority for the said infrastructure and constituted a continuing trespass as at the time the Lyons entities purchased the subject land in April 1998. · 2006 71 The Electricity Supply Amendment (Protection of Electricity Works) Act 2006 came into force in May 2006. It is clear that from that time no action lies by reason of the presence of electricity works on land or the operation of those works: the presence of the works and the operation, as between the owner of occupier and the network operator, are "taken to be lawful for all purposes" (s 53(2)). That sub-section does not have retrospective effect (as noted by Mr Webster, the transitional provisions would be unnecessary if it had). Schedule 6 clause 148 of the amending Act provides in effect that in any proceedings commenced prior to 2 May 2006 the court may not order removal or modification of the works. However, the Act does not preclude any claim for civil liability. 72 The stated reason for the introduction and passage of the Electricity Supply Amendment (Protection of Electricity Works) Bill 2006, which introduced the current s 53 "Protection of certain electricity works", was uncertainty as to the legal position of much of New South Wales' electricity infrastructure. 73 The Hon Mr Tripodi, in the second reading speech in the Legislative Assembly said: There is a real risk that opportunistic individuals may jeopardise the future of electricity infrastructure by taking legal action in relation to the presence of electricity infrastructure on their land. Such actions may be commenced even where the original landholder gave consent to the installation of the equipment... There is no clear provision in the Electricity Supply Act to protect the presence, operation and use of electricity works on land not owned by the network operator. This ongoing uncertainty needs to be addressed in order to protect the public interest in a safe and reliable supply of electricity at affordable prices. 74 Similarly, the Hon Mr Costa, in his second reading speech in the Legislative Council, said: There is a real risk that opportunistic individuals may jeopardise the future of electricity infrastructure by taking legal action in relation to the presence of electricity infrastructure on their land. … There is no clear provision in the Electricity Supply Act to protect the presence, operation and use of electricity works on land not owned by the network operator. 75 Of course, recognition by the legislature of uncertainty in relation to the provisions of the Act does not mean that, properly construed, the Act did not protect network owners; it simply indicates a desire on the part of the legislature to remove any doubt. Did the installation or maintenance of the electricity infrastructure amount to trespass? 76 As noted above, from 1954 the unformed Bate Bay Road had been dedicated to public use. 77 The Lyons entities submitted that there was no evidence that consent was obtained pursuant to s 86 of the Public Works Act to erect the infrastructure on Bate Bay Road and, therefore, that insofar as reliance is placed on that Act, the erection of such works was unlawful at the time (and remains unlawful). 78 While there was debate as to whether the Lyons entities bore the onus of showing that the consent of the Governor was necessary (ie that this was a public highway or carriage road), for the reasons set out above the evidence in my view establishes that it was a public road. I do not see any basis for seeking to draw a distinction between a public road at common law and a "public highway or carriage road" for the purposes of s 86 of the Public Works Act. The terms "highway", "street" and "road" seem in at least some contexts to be used interchangeably (see Mills v Selby [1971] VR 836). 79 Insofar as the Governor's consent was required under s 86 of the Act, EnergyAustralia relies upon the presumption of regularity, citing Griffith CJ in McLean Bros & Rigg Limited v Grice (1906) 4 CLR 835 at 850, his Honour there approving the formulation of this presumption by Brewer CJ in Knox County v Ninth National Bank 147 US 91 at 97 (1893) that: where an act is done which can be done legally only after the performance of some prior act, proof of the latter carries with it a presumption of the due performance of that prior act. 80 In Minister for Natural Resources v New South Wales Aboriginal Land Council (1987) 9 NSWLR 154 at 164 McHugh JA, as he then was, stated the maxim as follows: Where a public official or authority purports to exercise a power or to do an act in the course of his or its duties, a presumption arises that all conditions necessary to the exercise of that power or the doing of that act have been fulfilled. 81 In response, the Lyons entities cited the decision of the High Court in Industrial Equity Limited v Deputy Commissioner of Taxation (1990) 170 CLR 649 at 671-2, where Gaudron J (who dissented in the overall result) said: And, where the subject matter of a decision falls squarely within the terms of a statutory provision, then, in the absence of evidence establishing improper purpose or evidence displacing all possible permitted purposes, it must be accepted, simply because of the absence of such evidence, that the decision was made for a purpose for which such decisions might properly be made. It is only if the purpose attending the decision must be ascertained by inference from other facts that a presumption of regularity has a role to play. (emphasis per Mr Webster SC). 82 It was submitted for the Lyons entities that in the absence of evidence as to a decision being made under the Public Works Act (for consent under s 86 or otherwise) the principle of regularity does not arise. 83 However, the Industrial Equity Limited case was one in which the issue was as to the purpose for the making of the decision in question. I do not understand her Honour there to be suggesting that the presumption of regularity is only able to be called upon where the question is one as to the purpose for which a decision is made. 84 Here, in circumstances where a public authority (the Sydney County Council) exercised a power to install electricity infrastructure which (as the land was dedicated to public use) could only be installed under the Public Works Act with the Governor's consent, it seems to me that the presumption of regularity does apply. 85 I note that EnergyAustralia further submits (by reference to s 86 of the Public Works Act) that any non-compliance would not necessarily deprive the constructing authority of the right to build and the landowner of the right to compensation, citing Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355. 86 In that regard I note that breach of the somewhat analogous requirement in s 18 of the 1896 Act would simply have had the consequence that the Sydney County Council might have been required to remove the infrastructure. Further, given the length of time since the (on this hypothesis, unapproved) installation, it is difficult to see what public interest there would be in now holding that breach of s 86 should render the installation unauthorised, particularly where (as the road was resumed or dedicated for public use) there would have been authority under the 1896 Act to carry out the works without the Governor's consent in any event. 87 I have therefore concluded that EnergyAustralia had lawful authority to erect the electricity infrastructure in 1982/3 under one or both of the Public Works Act (s 80), as made applicable by the Local Government Act (s 383), and the 1896 Act (s 14), and thus the initial installation was lawful. 88 By implication, the legislation which authorised EnergyAustralia's predecessor to install the electricity infrastructure must have authorised it to keep that infrastructure in place on the subject land at least until 1987 (when the 1896 Act was repealed) and more likely until 1990 (when s 80 of the Public Works Act ceased to apply to Sydney Electricity). It cannot have been intended that electricity infrastructure, which was lawfully installed one day, should become an unlawful trespass the instant it had been so installed. 89 The more difficult question is whether by 1990 (when Sydney Electricity had become the owner of the infrastructure but no longer had powers under s 80 of the Public Works Act), it became unlawful for Sydney Electricity to leave the installation in place without the benefit of an easement to do so. 90 The Lyons entities place weight on the fact that the 1990 Act, under which Sydney Electricity had power to install property on land (subject to the obligation to compensate parties for any damage so caused), contained no express power of "maintenance" in respect of any structures so installed on private land and hence from 1990 there was no power to leave the electricity infrastructure on the land (notwithstanding that it may have been lawfully installed in the first place) and from that date there was a continuing trespass. (That said, I note that there is at least a general power of maintenance in respect of buildings, plant, machinery, equipment and vehicles under s 6(1)(c) of that Act.) 91 EnergyAustralia's first contention in response was that, if the structures were lawfully installed in 1982, no separate authority was required to "maintain" the structures on the subject land (using "maintain" in the sense of "leave in place" or "continue the presence of"), since the works in question were or should be regarded as fixtures or permanent structures on the land. 92 Reliance was placed in that regard on the dicta of Mahoney JA in the Court of Appeal in Gigli where his Honour, in the context of works carried out under s 80 of the Public Works Act, said that: whether by the express terms of the sections or by implication, the works once constructed may be relevantly maintained in place by the Council and the plaintiffs would not be entitled to remove them. 93 As I understand it, EnergyAustralia submits that this was the case up until the closure of the road in 1992 and that thereafter the lawfulness of the presence on the land of a permanent structure or fixture did not alter when the land became Crown land, distinguishing in this regard between a right to maintain (or leave in place) a permanent structure erected on land and a right to enter onto land to repair or maintain that structure. 94 However, what this submission did not address was the difficulty recognised by Hodgson J (as he then was) in Thompson v Australian Telecommunications Commission (unreported, 18 July 1988; BC 8801729), namely that once the relevant authorising sections cease to apply (in the case of the Local Government Act in 1990 when the new Sydney Electricity was formed and, in the case of the 1896 Act, in 1987 once the Act ceased to apply to the subject land) they could no longer provide legal authority for the maintenance in place of the electricity infrastructure. 95 Thompson arose out of not dissimilar facts. There, the question was the authority of Telecom to maintain in place certain telecommunications cables. Authority to install the cables had previously rested with the Postmaster General under the Post and Telegraph Act 1901. Section 85 of that Act authorised the Postmaster General to cause to be set up or opened up or laid down and maintained a telegraph line. Hodgson J held that this authorised the Postmaster General not merely to install the underground cable but also gave to the Postmaster General "the right to leave the works in place". 96 EnergyAustralia submits that s 85 is in material respects identical to s 14 of the 1896 Act, though (unlike the latter) it may not expressly extend to the right to preserve the works in place (which s 14 appears to do insofar as it includes the words "from time to time repair, alter or remove"). (To the extent that s 85 authorises the Postmaster General to cause to be "maintained" a telegraph line, it seems to me that this would be construed as extending to the right to preserve the line in place. However, nothing may turn on this point.) 97 As to whether the use of "maintain" in any of the relevant statues meant to "keep in order" or to "keep in place", in Thompson, Hodgson J appeared to accept the submission that at least a power to keep in place was implied by the power to install; when considering the defendant's submission that the word "maintain" went further and extended to a power to keep in order. Mr Hill QC for the defendant submitted that s85 authorised the performance of work on private lands. He submitted further that even if the word "maintain" in s85 had the meaning of "keep in order" rather than "keep in being", s85 implied a licence to keep any telegraph line, which had been erected or placed pursuant to the power in s85, in place after it had been so placed. Mr Hill in fact submitted that the preferable view was that "maintain", as used in the section, had the meaning of "keep in order" and in this regard he referred to Fairfax v Australia Telecommunications Commission [1977] 2 NSWLR 400 at 413. 98 However, the Post and Telegraph Act was repealed in 1975 by the Postal and Telecommunications Commission- (Transitional Provisions) Act 1975 which was accompanied by the passage of the Telecommunications Act 1975. Under the latter legislation Telecom assumed the property and functions of the Postmaster General. The relevant provision in the Post and Telegraph Act (which Hodgson J found to have given the Postmaster General the power to install and keep in place the cables) was not specifically replicated in the 1975 Acts. 99 Once the Act giving the power to install had been repealed, Hodgson J considered that there needed to be some further source of authority for the continued presence of the installation. 100 His Honour's ultimate conclusion was as follows: There is, I think, some force in the submission that there is a gap in the Transitional Provisions, but on the whole I think the implication under the 1975 Act, that Telecom is to have the right to maintain installations taken over from the Postmaster General's Department in place on private lands is sufficiently clear. Telecom is in fact given property to the installations on private lands, the 1975 Act gives it the function and the duty to run a system which, at the time it was taken over, included those lines. Section 18 gives it the power to remove, replace, repair and maintain those installations. It also gives Telecom a power to occupy land for those purposes associated with removing, replacing, repairing and it maintaining installations. In my view, that is sufficient to imply a right in Telecom to maintain the installations on private land. 101 Section 18 of that Act provided that: 18. The Commissioner may, at any time, remove, replace or maintain - (a) any telecommunications installation constructed above, upon or beneath the surface of any land or above or beneath the surface of any waters; or (b) any line or other equipment affixed to any business or other structure erected on any land or any waters being a line or equipment for use in conjunction with a telecommunications service. and for that purpose may enter upon and occupy that land and those waters and may remove or erect a gate or any fence hindering the exercise of such powers. 102 As it appeared to me that the analysis in Thompson was particularly apposite to the facts presently under consideration, I gave leave for further submissions to be served by both parties addressing that issue. Those submissions were served on 15 December 2008. 103 In his submissions for EnergyAustralia, Mr Leeming SC places weight on the provisions in the 1987, 1990 and 1995 legislation to which I have referred above which conferred on EnergyAustralia or its predecessors functions, powers and duties the counterpart to those relied upon by Hodgson J in Thompson. In particular, Mr Leeming refers to the provisions of each statute which refer in terms to "maintaining" works or facilities for the supply of electricity. 104 Mr Webster, on the other hand, submits that a close comparison between the Electricity Supply Act 1995 and the Telecommunications Act 1975, and the transitional Acts relating to both pieces of legislation, and the lack of any equivalent in the Sydney Electricity Act to s 18 of the Telecommunications Act to which Hodgson J had expressly referred, means that there is nothing in the 1995 legislation which gives a right on the part of EnergyAustralia to "maintain" all existing electricity installations (on private land). 105 Reference was made in that regard to s 45 (set out above), s 51 and s 54 of the Electricity Supply Act. Section 54 provides as follows: Section 54(1) POWERS OF ENTRY (1) An authorised officer of a network operator may enter upon premises for the purpose of exercising any function conferred or imposed on a network operator by or under this or any other Act or law, including … (b) Installing, extending, maintaining , repairing or removing electricity works or … (1A) An authorised officer of a retail supplier may enter the premises of a customer for the following purpose in respect of electricity works prescribed by the regulations: … (b) installing, extending, maintaining , repairing or removing electricity works. (my emphasis) 106 Mr Webster submits that the word "maintaining", when used in s 54(1)(b) and in s 54(1A)(b), refers to the works "installed" under that Act, not to works otherwise (or earlier) installed. I do not accept that submission. Section 54 gives a power of entry "for the purpose of exercising any function conferred or imposed on [EnergyAustralia] under this or any other Act or law", including maintaining "electricity works". The Sydney Electricity Act had vested in Sydney Electricity (EnergyAustralia's relevant predecessor) all the assets of Sydney County Council (which must have included the electricity infrastructure in question) and gave it the function of the provision and maintenance of works for the supply of electricity. This position continued in 1995. 107 MetNorth, and MetNorth Energy in turn, clearly had the function of maintaining both existing and any new facilities for the distribution of electricity (see in the case of MetNorth Energy s 9(2) Energy Services Corporation Act 1996). I see no basis for confining the powers of entry in s 54 to purposes connected with electricity works installed pursuant to that legislation (as opposed to electricity works already installed on private lands and vested in MetNorth Energy). 108 It is submitted by Mr Webster that the perceived lacuna in the Sydney Electricity Act (namely, as to the right to maintain existing installations) is made evident by the comparison of the provisions within both the telecommunications legislation and of s 37 of the Sydney Water Act. 109 However, s 37(2) of the Sydney Water Act (unlike s 54 of the Electricity Supply Act) is not a provision which contains a power both to install and to maintain. It is limited to what can, in effect, be done with works already installed. Section 54 is not so limited. It also authorises installation of works. If s 54 were intended to have been limited to powers of entry to install works and, once installed, to maintain those (and only those) works, it could easily have said so. Rather, the power of maintenance is included in the same clause as the power of installation as a separate power and could on its face extend both to existing and future works. 110 What seems to be required, (adopting the test in Thompson), in the absence of an express provision, is to ascertain whether there is a legislative intention that EnergyAustralia (or its predecessors) at the relevant time have the right to maintain in place electricity installations on private lands. The indicia of such a legislative intention in Thompson were the proprietary ownership of the installations on private lands, coupled with the function and duty to run a system which included those installations. 111 I consider that the Sydney Electricity Act, by giving Sydney Electricity the function of "the provision and maintenance of works for the supply of electricity" (s 5(1)(b)) and by transferring to it the assets of Sydney County Council (Schedule 5 s (4)) (which included the electricity infrastructure), demonstrated sufficient legislative intention that Sydney Electricity have the authority to maintain those assets in place where they had previously been lawfully installed, notwithstanding the absence of an express power of entry onto private lands for that purpose. 112 Even, if there were some question as to the position between 1990 and 1995, the 1995 legislation in my view clearly authorises entry onto lands for the purposes of maintaining electricity works and is not limited to entry onto public land. 113 While there is no exact equivalent of s 18 (which gave Telecom an express power to maintain telecommunications installations on any land), s 54(1) of the Electricity Supply Act clearly gives EnergyAustralia the right to enter premises for the purpose of exercising its functions in relation to the supply of electricity, including "maintaining" electricity works. I consider that to be sufficient indication of legislative intention for present purposes. 114 Therefore, even if the Sydney Electricity Act 1990 did not by implication do so, in my view, the Electricity Supply Act (by vesting ownership of the electricity infrastructure in EnergyAustralia (s 51) and by giving EnergyAustralia the power to enter onto premises, inter alia, to maintain electricity works for the purposes of exercising its functions under that or any other Act in circumstances where one of the principal statutory functions of EnergyAustralia was to establish, maintain and operate facilities for the distribution of electricity (s 9(2) Energy Services Corporations Act 1995)), impliedly conferred on EnergyAustralia a licence to keep in place not only any electricity infrastructure installed by it under the Act but also electricity infrastructure lawfully installed by its predecessor, even where that infrastructure was on private land. 115 Accordingly, as at and from the time the Lyons entities acquired the subject land in 1998 there was no trespass. The claim in trespass therefore fails. Knowledge of the Lyons entities when acquiring the subject land 116 Before turning to the claims in contract/representation, I should note, in the context of the trespass claim, that there was a dispute as to the knowledge held by the Lyons entities at the relevant time of the existence of the electricity infrastructure. 117 The Lyons entities sought, at the commencement of the hearing, to file an amended reply which admitted that they were "relevantly" aware of the existence of the electricity structure. The qualification of relevance as to the admitted "awareness" (I was informed by Counsel) was intended to refer to the evidence subsequently to be given by the managing director of the Lyons entities (Mr Lyons) that, although he was aware of the existence of electricity poles on or near the subject land, he was uncertain as to whether or not they were on the land his companies were acquiring and he thought they were temporary. 118 The relevance of Mr Lyons' awareness in 1998 of the electricity infrastructure on the land (other than as to credit perhaps) goes only (as I apprehend EnergyAustralia's submissions) to the question whether any loss was sustained by reason of the alleged trespass. 119 I note that Hodgson J in Thompson said at 17: I think in most cases, this result [multiple claims for compensation] would be avoided by application of principles concerning causation: in other words, if a new owner knew of the existence of a cable, or if by making reasonable inquiries would have known of its existence, then I think it would be likely that according to the usual principles of causation, it would be considered that the new owner is not caused injury by the maintaining of the cable. 120 That reflects EnergyAustralia's submission in this proceeding. EnergyAustralia contends that the Lyons entities were aware, through Mr Lyons (or alternatively through the knowledge of an agent, Don Fox Planning Pty Limited) of the existence of electricity poles on the land. Don Fox Planning Pty Limited had carried out work in about 1993 the Lyons entities in respect of an earlier application for development consent from Sutherland Shire Council in respect of Lot 1, in the course of which a survey had been obtained from Moriarty Stapley, surveyors, of land including the subject land. 121 Further, it was submitted that even if (contrary to EnergyAustralia's primary submission) the Lyons entities neither had actual knowledge (through Mr Lyons) nor imputed knowledge (through their consultants) of the electricity infrastructure, the Lyons entities would have known of their existence had they made reasonable inquiries. 122 As I have not found any trespass, this issue does not strictly arise. However, insofar as this issue remains of any relevance, I am of the view that the evidence (which I consider in more detail in relation to the contract/misrepresentation claims) discloses that Mr Lyons at the time the Lyons entities acquired the land was at least aware of the possibility that the electricity poles in question were on the subject land. 123 Mr Lyons was aware that an earlier survey had been commissioned on his companies' behalf prior to the sale contract being signed for Lots 1234/5. On 22 April 1998, Mr Lyons wrote to Moriarty Stapley, referring to work which earlier had been carried out by them in relation to Lot 1 and asking that they calculate the square metreage of Lots 1234/5. In that letter, Mr Lyons referred to an earlier survey using the reference: "Your ref 48465". This appears to correspond to the reference number of a Moriarty Stapley survey which had disclosed the existence of poles on the land. (Ex 8). 124 Mr Lyons wrote and asked for advice in relation to the poles and stanchions previously identified and plotted by Moriarty Stapley, noting his assumption that some of the poles and overhead lines were "outside the easement" (ie outside the main transmission easement), those being any poles and stanchions on the land he was proposing to acquire. (See Tab 8.3 and Ex AB p 100.) 125 It is not clear whether Exhibit 8 (or another survey in the same series) was the one sent to Mr Lyons or his companies to which Mr Lyons was referring in his 1998 letter. Mr Lyons, in cross-examination, said he saw the 1993 survey only in 2000. Mr Webster submits that Mr Lyons' evidence should be accepted that he first saw the survey in 2000, emphasising in part that in the course of Mr Lyons' evidence in cross-examination Mr Lyons had made the point that he did not know that there were high voltage wires over the land (and that until he was told that he just thought they could be knocked down). 126 EnergyAustralia submits that this is implausible and that the court should infer that Mr Lyons gave that oral evidence only in order to support his earlier sworn evidence that he did not know, when the property was purchased in 1998, whether the poles were located on the subject land. 127 Mr Leeming placed emphasis on the fact that Mr Lyons had "volunteered" this evidence indicating that he was concerned pre-emptively to distance himself from awareness of the survey plan. I do not think much can be drawn from Mr Lyons' answers in this regard. Mr Lyons had a habit of pre-empting or foreshadowing questions in cross-examination. From my observation he did so on a number of occasions (such as in response to questions put to him relating to discovery of documents). He also appears to have spent some time before or during the hearing refreshing his memory or making his own enquiries as to matters he thought might be put to him in cross-examination (such as when he made enquiries as to matters in relation to the sale of the land or as to how loan funds had been disbursed). 128 However, Mr Lyons does appear to have been keenly interested in the development potential of the subject land (and that of Lot 1) for quite some time. Mr Lyons took an active part in negotiations with various people in relation to the land over the years (potential purchasers, representatives of the relevant government Department and others). Given the close attention Mr Lyons seems to have paid to the subject land and the potential for development of this land since at least 1991, I think it improbable that Mr Lyons did not have regard, at least to a cursory extent, to the survey commissioned in relation to the land in 1993 (or indeed any survey) at or about the time it was prepared. 129 Mr Lyons' correspondence in April 1998 with Moriarty Stapley (Ex 23 p 100) (before the contract for sale was signed) makes it clear that Mr Lyons was of the belief that some of the poles and overhead lines were outside the main transmission line easement. Presumably that belief came either from his own observation of the site (though he said this was overgrown and that the electricity infrastructure or boundaries of the land were not as readily discernable as was the case later following clearance of or landfill on the land) or from discussions with the surveyor or his review of plans in relation to the land. Logically, Mr Lyons can only have thought it necessary to seek advice from surveyors in relation to this if he considered that there were or might be electricity or other poles on the land his companies were acquiring. His later correspondence to EnergyAustralia (discovered only during the course of the hearing) makes this clear. (Ex AB Tab 2). 130 Mr Webster further submits that it should be accepted that (in 1998) Mr Lyons did not consider the poles to be "of prime concern" to the viability of the development of the subject land. From the tenor of Mr Lyons' evidence, I accept that he did not at the time place any great importance, or have any great concern, as to the presence or possible presence on the subject land of electricity poles. Nevertheless, whether or not Mr Lyons did have any or any detailed regard to the survey commissioned on his or the Lyons entities' behalf, it is clear that when the Lyons entities acquired the subject land Mr Lyons knew that there was a possibility (or risk) that part or all of the electricity infrastructure (whatever its perceived permanence or impermanence) was on the subject land. Perhaps with the same confidence which Mr Lyons expressed in the witness box as to his ability to procure any necessary SEPP 1 variation or rezoning of the land to achieve what he perceived to be its development potential, or perhaps thinking he could simply demolish the poles, Mr Lyons evidently considered that the presence of any electricity poles on the subject land was an impediment he could in due course overcome and was prepared to accept this risk. 131 I any event, I am not satisfied that had there had been a trespass by reason of the presence of the electricity infrastructure on the land, any damages in respect of that trespass would have been reduced by reason of the fact that the Lyons entities had acquired the land on notice of that infrastructure. I note Mr Webster's submission in this regard, that as a matter of law, knowledge does not inform the quantum of damages for trespass. Contract/Misrepresentation claims 132 That brings me to the claims in contract/misrepresentation. Before addressing those claims, I should note the further matters by way of factual background. Further Facts 133 At the time Sydney County Council installed the electricity infrastructure on the subject land in 1982/3, as at the present, there were very high voltage main transmission towers and high tension lines running along the foreshore adjacent to (but not part of) the subject land In 1983 an easement was gazetted in respect of those lines. It is accepted that this easement did not cover the electricity infrastructure which was installed in 1982 or 1983 on that part of the land which became Lots 1234/5 and which is the subject of the present dispute. 134 The proposed closure of Bate Bay Road was first notified in 1990. Sydney County Council objected to the closure as overhead mains were constructed on the road. There had been discussions between Sydney County Council and Cronulla Sutherland Leagues Club ("Club") (which was at some time around 1990 seeking to the purchase the subject land) as to the creation of an easement for poles and lands on Bate Bay Road if it were to be closed. 135 Sydney County Council, by letter dated 27 July 1990, sought consent from the Department to the creation of an easement over the subject land for the electricity infrastructure prior to the (then proposed) sale to the Club of the land. The Department refused such consent. The terms in which it did so suggest to me that the Department considered it more appropriate for the proposed ultimate owner of the land (rather than the Department) to consent to any easement. It may well be that the Department was concerned not to take any steps in relation to the title of the land which might adversely affect the proposed sale or encourage the proposed purchaser to seek to renegotiate the price for the land. There is no evidence as to the Department's reasons for its refusal to consent to an easement at this stage. I simply note that, to the extent that the Lyons entities at one stage appeared to rely on the position taken by the Department in this correspondence as evidence of a lack of consent to the initial installation, I do not consider such an inference should be drawn. 136 On 29 August 1990 a deed of agreement was entered into between the Club and the Sydney County Council for the grant of an easement over the electricity infrastructure, following which on (7 September 1990) the Sydney County Council withdrew its objection to closure of the road However, no such easement was ever finalised. 137 On 12 July 1993 Sydney Electricity requested provision of easement documents from the Club and said that if they were not made available it would object to the road closure (although by then it would seem the road had already been closed, so it is not apparent how Sydney Electricity would have been in a position to implement that threat). 138 I do not see EnergyAustralia's conduct in seeking an easement at that stage (or earlier) as any admission that it had no right to leave the electricity infrastructure on the subject land. It seems to me consistent with EnergyAustralia realising that, insofar as there might be any uncertainty or doubt as to that matter, it would be prudent (given the possibility of a change in ownership of the land) to put the matter beyond doubt. 139 By letter dated 23 July 1993 the Club advised Sydney Electricity that the development of the area was at a "standstill" due to the current financial position of the Club. 140 At this point, reference should be made to Mr Lyons' involvement with the Club. For some time in or about the late 1980's or early 1990's, Mr Lyons, or entities associated with him, were involved in what Mr Lyons described as a "joint venture" with the Club with a view to development of the land adjacent to the Club (including both the subject land and the land which became Lot 1). I do not know whether there was ever a formal joint venture arrangement. However, each of the Lyons entities and the Club in separate correspondence with the Department on 24 and 22 November 1993 (Ex 23 p 27 and p 30, respectively) described the other as a "former joint venture partner". 141 Mr Lyons or his companies in 1991 commissioned a valuation of the area of land described as "Site A" which included the subject land, Lot 1 and Woolooware Road North. That valuation, by Jones Lang Wootton assessed the value of all three areas together at $350,000 on the assumption that they were all owned by the Club. 142 As noted above, Mr Lyons appears to have taken a close interest in the various matters affecting the proposed development of the land in this area (including the subject land) for some time prior to his acquisition of the subject land (from at least 1990) and, more than most if not all other purchasers, must have had ample opportunity to assess the value of and potential limitations on use of the subject land. 143 Mr Lyons or his companies had retained external advisers (Don Fox Planning Pty Limited and Moriarty Stapley) in relation to an application for consent to the development of Lot 1 for use as a service station, which consent was ultimately obtained after a lengthy process and, as Mr Lyons' correspondence made clear, at considerable cost. 144 On 15 March 1991, an amending LEP 151 was published in relation to land referred to as site "A". Site "A" included both Lot 1 and Lots 1234/5. The zoning amendment permitted use of site "A" for refreshment rooms, take away food shops and convenience stores, as well as for a service station. 145 The rezoning was subject to a three year sunset clause, expiring 15 March 1993 (later extended by request from Mr Lyons until 15 March 1996). The Lyons entities relied upon the amended zoning to procure development consent for Lot 1 for construction on that lot of a service station. However, it seems Mr Lyons was unable at that stage to persuade the Department to utilise the benefit of the rezoning in respect of the balance of Site "A" (including Lots 1234/5) (see Ex 23 p 27, for example and Ex 23 P 36) and ultimately the amended rezoning in relation to Lots 1234/5 expired. 146 At some time in the early 1990's, the Club experienced financial difficulties and was placed in receivership. There was then apparently a dispute leading to court proceedings between Mr Lyons or his companies and the Club. This was ultimately resolved by what Mr Lyons described as a "lengthy negotiated settlement", as part of which the Lyons entities acquired Lot 1 for $82,408 and the Club (or its then receivers and managers) acknowledged that Mr Lyons or his companies (the Lyons entities) were free to pursue commercial negotiations for the "special purchase" of the subject land. (Ex 23 p 30). 147 The price at which the Lyons entities acquired Lot 1 was $82,408, reflected the proportionate value (on a square metre basis) of Lot 1 as part of the overall Site A, in accordance with the Jones Lang Wootton valuation, although I understand that there may have been other (non-monetary) consideration referable to the sale. 148 The Lyons entities mortgaged Lot 1 for the sum of $500,000 lent to them by a Mr Tattam in February 1994. A valuation of the land had been prepared by Mr Rennie of Herron Todd White for that purpose and in that amount .(Ex 15). 149 From the early 1990's, through to the late 1990's, Mr Lyons was involved in discussions with the Department with a view to Mr Lyons or his companies acquiring the subject land. (Indeed, it appears from a letter dated 9 November 1998 from the Lyons entities to Sutherland Shire Council (Ex 22 Tab 6) that an application to acquire the land may first have been made by the Lyons entities and the Club as early as 1988.) 150 In the course of those negotiations, Mr Lyons (both himself and through a property consultant retained by one or more of the Lyons group of companies and, working out of their offices, Mr Keith Binney), stressed that the subject land was of almost no, or minimal, value and indeed was only of any value to the owner of Lot 1. 151 By letter dated 19 March 1992 to the Regional Director of the Department, the subject land was described by Mr Lyons as "basically unusable" unless it is combined with Lot 1 (Ex 23 p 10). In that letter Mr Lyons ascribed a value of $65,000 to the land and noted various negative features of the land, ie any construction would require "substantial costly geo-technical sub-soil enhancement", and that it had previously been a swamp. (At that time the Valuer General had apparently suggested a value in excess of $500,000). By letter dated 24 November 1993 (Ex 23 p 27) Mr Lyons, writing on behalf of the Lyons entities similarly described the land as having "almost no value" and said that it "will have minimal value once it reverts back to its previous zoning". 152 In 1994 and 1996 the value was described as being "severely diminished" or "negligible" because of the 30 metre foreshore building line or set back (Ex 5 p1 – 9.2.1994 and Ex 3 p 1 – 21.8.1996). 153 Mr Lyons proposed a sale price in 1992 of $100,000 (it seems this was roughly calculated pro rata on a square metreage basis, using a valuation he had obtained for the whole of Site "A" of $350,000). An alternative option also then being considered was a long term lease of the subject land to the Lyons entities. 154 By letter dated 5 June 1996 the Department wrote to Mr Lyons (referring both to previous correspondence and to "recent discussions" with Mr Keith Binney advising that the Minister under delegation had approved in principle the sale of Lots 1234/5 to the owners of Lot 1 (the Lyons entities) at a purchase price being "the current market value of the land, having regard to its proposed use, as assessed by the Valuer General". (Ex AB p 63). 155 The Valuer-General (by letter dated 8 July 1996) was instructed to value the subject land "based on the current zoning and the proposed use of the adjoining land [Lot 1] for service station/convenience store by the intended purchaser. The Valuer-General's response suggests that he considered that there were some problems associated with the task including "possible relocation of power poles??" and "exact location of power poles" (see Ex AB p 67). 156 The Valuer-General's valuation of 2 December 1996 put the current market value of Lots 1234/5 as totalling $73,000 to $95,000. On the basis that there was said to be a very good chance that the zoning of the Crown land could easily be changed to allow for commercial usage as indicated on LEP 151, it appears the Department recommended that negotiations commence at $180,000 (See Ex A1 pp 15-20). 157 Once approval in principle was obtained for sale at market value having regard to its proposed use, Mr Lyons and Mr Binney then stressed the restrictions on development/use of the subject land 158 By the end of 1996, the Department had apparently offered to sell the land for the sum of $180,000. In evidence were copies of some notes prepared by the Department's officers of a meeting on 23 December 1996 with Mr Lyons and Mr Binney, in which Mr Lyons apparently "detailed the history of the site and in conclusion indicated that the site as is was not worth $180,000". 159 The belief was apparently formed by the Department's representative (Greg Foster) from the meeting that "the applicants want to purchase the land even as 6(c) zoned land that may only be able to be used as car parking or landscaping". (Ex AB p 79). 160 By letter dated 14 January 1997, Mr Lyons, writing as managing director of the Lyons Brothers Group of Companies, submitted an offer to enter into a 25 year lease at a rent of $15,000 per annum for year one but required an option to acquire the freehold at a purchase price of 10% capitalisation of the then rent (ie $150,000 if the rent was $15,000) (Ex AB p 80). 161 That offer was in principle acceptable (Ex AB p81) but the Department was not prepared to agree to the option price, advising that subsequent sale of the land would be considered on its merits as at the date of the application for purchase (letter dated 17 February 1997 – Ex AB p 81). 162 By letter dated 24 October 1997 to Mr Keith Binney, the Department responded to issues apparently raised in relation to the permitted use of the land under any such lease and noted that a change of purpose of the lease would be "an expensive, lengthy and time consuming exercise". The Department indicated it would be prepared to re-open negotiations on the "asking price" of $180,000 for the sale of the land. 163 That evidently prompted a re-consideration by Mr Lyons of the desirability of a lease versus purchase of the subject land and, by letter dated 28 October 1997, Mr Lyons, writing for the Lyons entities, advised that they wished to retain the "right" to take up the lease which had been offered but made an unconditional offer to purchase the land at $150,000 (Ex AB p 92). In that letter Mr Lyons stressed that "we have been negotiating with your office for 8 years". 164 Approval was given on 7 November 1997 for the sale of Lots 1234/5 to the owner of Lot 1 at a price of $150,000 (Ex A1 p 21). 165 At or about the same time, the mortgagee of Lot 1 exercised his rights as mortgagee to sell Lot 1 due to the failure of the Lyons entities to meet interest payments due on the loan taken out by them in respect of land. In the witness box, Mr Lyons appeared to attribute this to cash flow difficulties admitting that " … I think they … didn't have the funds at that time to continue to make the mortgage payments". 166 Therefore, the Lyons entities were defaulting on mortgage payments for Lot 1, just when Mr Lyons was in the midst of negotiation for the purchase by the same companies (the Lyons entities) of Lots 1234/5 for the sum of about $150,000. (Mr Lyons' oral evidence nevertheless was that the Lyons entities could have procured the necessary funds to pursue a development application over the land in the period from 1998 perhaps from his co-director, a Mr Muhs, or might have been able to persuade consultants to "punt" an application at no cost to his companies, had he thought development consent could have been obtained with the infrastructure still on the land.) 167 In late 1997 Lot 1 was sold at public auction by way of mortgagee sale to Galanos Brothers for the sum of $540,000, the land being sold with the benefit of the conditional development approval which had been obtained (22 December 1995) for use of the land as a service station. 168 The sale to Galanos Brothers was completed in January 1998. Of the proceeds of sale received by the Lyons entities ($114,621) about one third was paid to the solicitors acting for the Lyons entities on a number of matters not apparently connected to the land itself. 169 By letter dated 11 November 1997 the Department wrote to Mr Lyons advising that it was prepared to accept his offer for purchase of the subject land by the Lyons entities at a price of $150,000 but advised that the Minister would need to advertise his intention to sell. (Ex A1 tab 8 p 22; Ex AB p 89). 170 In cross-examination, Mr Lyons appears to have accepted that the price of $150,000 was only struck in 1997. This is contrary to the instructions apparently given by him to the two expert valuers retained by the Lyons entities (Rennie and Edmonds) to the effect that the price was negotiated over a period of some years (in Mr Edmonds' case said to be 8 years) and the history recounted by Mr Lyons to EnergyAustralia in 2001 that the purchase price was agreed 11 years ago (Ex A1 tab 29 p 248). This may be relevant in explaining why Messrs Rennie and Edmonds discounted or disregarded the 1998 sale price when assessing the value of the property. 171 At the very least the disparity between Mr Lyons' portrayal of events in relation to the negotiation of the purchase price for Lots 1234/5 suggests a tendency on the part of Mr Lyons to put a favourable gloss on events to suit his position. That tendency was also illustrated by the manner in which different aspects of the land were emphasised by Mr Lyons according to whether he was speaking as a purchaser or as a vendor of the land. Mr Lyons (or his consultant) emphasised the negative features of the land when negotiating to purchase the land but otherwise emphasised its positive features when seeking (even before he had acquired it) to on-sell the property or when selling to obtain finance on the strength of the property. In either case, Mr Lyons accepted that he was conscious of the need not to mislead or deceive those to whom such representations were made and agreed that he was not misleading the Department in his negotiations for sale, when stating the negative features of the subject land. I can only assume, therefore, that Mr Lyons accepts that the existence of developments constraints impacts negatively, at least to some extent, on the value of the land. 172 On 28 April 1998 the contract for the sale of Lots 1234/5 was signed. That contract was completed in May 1998 and the Lyons entities (in unequal shares) together acquired Lots 1234/5 from the State of New South Wales in 1998 for the sum of $150,000. 173 In May 1998 Mr Lyons sought from a number of valuers an initial "kerbside" a valuation of the subject land for intended use as two fast food restaurants. 174 At about the same time, by letter dated 14 May 1998, Mr Lyons wrote to a Mr Ken Mathews seeking advice in relation to the permitted use of the land and stating that "I am not too anxious to seek a rezoning, as dealing with Sutherland Council is even more tedious than other Councils". Mr Lyons appeared to be seeking advice as to whether two fast food operations could be carried out on the site without the need for rezoning (Ex AB Tab 3.) 175 Mr Lyons' conduct throughout the period from 1998 is consistent with his preference being, if at all possible, to on-sell the subject land at a profit but without incurring the expenses of undergoing the development application process. I accept that it would appear that Mr Lyons had in the back of his mind that failing this he had the option of seeking a development application and on-selling the site with DA attached. (See Ex 3, letter dated 11 September 1998 from a Mr Ben Gilles setting out his understanding that Mr Lyons was seeking to retain his services to prepare a development application to attach to the site for sale purposes.) 176 On 14 May 1998 Mr Lyons wrote to Mr Barry Crowther, the local bus operator, enquiring as to any interest he might have in renting or buying the subject land for the purpose of providing a facility for his buses. That letter noted that "from our experience, seeking a re-zoning from Sutherland Council is a lengthy and tiresome process" but suggested that use of the site without rezoning (providing a DA was achieved) might be possible and that a "gradual 'creep' of usage may evolve in time to a full scale depot". 177 On 11 August 1998 Mr Lyons offered the land to Mr Crowther for $850,000 or alternatively to lease the land to him (Ex 23 pp 105, 119). 178 Similar offers were made to others who Mr Lyons considered might be potentially interested in the purchase or lease of the land, including the owner of Lot 1 (see Exhibits 3, p14; and 9, pp 3, 4, 5, 6, 7 and 9). 179 On 21 July 1998 a valuation of the land was obtained from Mr Rennie, then of Herron Todd White, in the sum of $750,000 "for mortgagee purposes". 180 The Rennie valuation (Ex A1 Tab 13) assumed consolidation of the lots or a hypothetical sale as one saleable entity, something not possible by the time the Lyons entities had acquired the subject land, (unless some arrangement could be reached with the Galanos Brothers to merge or develop jointly the separate parcels of land). As noted, the value of the subject land was expressly assessed by Mr Rennie for mortgage security purposes. Reference was made to the sale of Lot 1, but it was said that a lower price/analysis was justified for the subject property "particularly without any DA and reflecting the highly restrictive zoning" (my emphasis). 181 There was no reference in that Rennie valuation to any impediment on development by reason of the electricity infrastructure. 182 A lower/mid price range was considered by Mr Rennie at that stage to be the mostly likely indication of value at $200/m2, although a purchase by the adjoining owner, it was said, would justify a higher price range up to $200-$300/m2. 183 The land, which had been acquired for $150,000 (in circumstances where Mr Lyons had emphatically asserted to the Department his belief as to its low value) was almost immediately put forward as security for a $500,000 loan supported by the Rennie valuation of $750,000. 184 On 10 October 1998, the Lyons entities granted a mortgage over the subject land to secure a loan of $500,000 from a syndicate of mortgage lenders. The stated purpose of the loan was to "obtain funds for expansion of business activities" (Ex A1 p 139). 185 Exhibit 22 Tab 5 represents, I am told, the entirety of the response by the Lyons entities to a call for documents recording the disbursement of the funds borrowed from the syndicate of lenders. It would appear from the evidence that at least the bulk of this money is likely to have been distributed by way of unsecured intra-group loans, although resolutions approving the loans were produced. Certainly, the $500,000 was not expended on development of the subject land. 186 On 11 August 1998, Mr Lyons wrote (in a letter produced only during the course of the hearing) to EnergyAustralia at its Oatley branch referring to an enclosed sketch which it was said indicated that power poles had been erected on Lots 1234/5 and for clarification as to the situation (Ex 22 Tab 4). It appears that this letter was sent to the wrong department within EnergyAustralia but Mr Newland and Mr Chin agreed that in the ordinary course misdirected correspondence of this kind would be redirected internally to the correct department. 187 On 25 January 2000, the Land Titles Office wrote to Mr Lyons advising that it had been contacted by EnergyAustralia "in regard to formalising the easement for power lines" for the electricity infrastructure (Ex A1 p 206, Ex JHL-9 to affidavit of 4 October 2007) and requesting that Mr Lyons contact EnergyAustralia. Mr Lyons denies receipt of that correspondence. 188 The initial mortgage loan secured over Lots 1234/5 fell due for repayment on 8 April 2000. The syndicate of lenders was unable to extend the loan. However, on 8 April 2000 the initial loan was refinanced by Mr George Stamatakis for a term ending in April 2001. The letter approving the refinancing noted that the lender required that the previous valuation by Herron Todd White of $750,000 be confirmed (Ex AB 131). It is not clear whether that confirmatory valuation was provided. 189 On 18 April 2000, a notation was placed on the title of the subject land in relation to a proposed easement in favour of EnergyAustralia. 190 On 16 October 2000 EnergyAustralia wrote to Mr Lyons in relation to the January 2000 letter from the Land Titles Office and seeking his agreement to formalise the easement. Mr Lyons responded to this letter on 30 November 2000 stating that the "whole issue" had come as a "great shock". 191 On 7 December 2000 Mr Lyons wrote to EnergyAustralia asserting that the subject land was worth $1.082 million and advising it was his intention to build two fast food operations on the subject land. 192 In his affidavit of 4 July 2007, Mr Lyons swore that at the time the property was purchased it was his intention to develop two fast food outlets on the property within two years. This is consistent with his request for a kerbside valuation of the land with that intended use. However, Mr Lyons' correspondence with Mr Mathews suggests that Mr Lyons was not necessarily intending to proceed to make a formal application for development consent at that time, let alone actually to develop the land. 193 Exhibited to Mr Lyons' affidavit was a plan for one fast food restaurant on the subject land and a convenience store on Lot 1. Mr Lyons conceded in cross-examination that this plan was drawn prior to the mortgagee sale of the service station at least four years before the subject land was acquired (at a time when the Lyons entities owned Lot 1) and, contrary to the assertion in his affidavit that this was the development for which the Lyons entities intended to seek consent at the time they acquired the subject land in 1998, this was not what they intended at the time. I note that no plans were produced at the relevant time which reflected that the intention was to develop the subject land for use with two fast food restaurants. 194 On 13 December 2000 Sutherland Shire Local Environment Plan 2000 came into force. There was a dispute between the valuers who gave evidence as to whether this plan prohibited fast food outlets. Nevertheless, for present purposes I note that Mr Lyons maintains he was confident of his ability to procure approval for such a use. 195 On 12 March 2001 Mr Lyons wrote to EnergyAustralia enquiring whether EnergyAustralia wished to purchase or to rent the site or to pay him compensation. EnergyAustralia submits that this was the first occasion on which it was asserted that EnergyAustralia should remove the infrastructure if it did not buy or lease the land. 196 The refinanced loan from Mr Stamatakis fell due for repayment in about April 2001. It was extended to 7 April 2003 (Ex A1 Tab 31). The purpose of the loan, as extend, was said to be "for business loan". At the time of the extended loan the easement notation was on title and it appears Mr Lyons may earlier have signed a statutory declaration (in connection with the loan) as to the fact that power lines had been erected on the land. There was in evidence a letter dated 30 April 2003, in which reference was made to a statutory declaration signed in October 2001 referring to the erection of power lines by Sydney Electricity "without due authority". Therefore, at least insofar as the assertion that the presence of the power lines prevented the later refinancing of the Stamatakis loan, this seems to be belied by the fact that finance had earlier been able to be obtained in just such a situation, albeit from an existing financier. 197 On 10 July 2001 EnergyAustralia advised Mr Lyons that the infrastructure had been lawfully erected by Sydney County Council in 1983 pursuant to the Public Works Act. 198 On 19 July 2001 Mr Lyons, in a without prejudice letter to EnergyAustralia, asserted that the occupation of the land (by the infrastructure) rendered the property unable to be developed and sought compensation in the form of a monthly rental (Ex A1 p 218 or 219). 199 On 7 August 2001 EnergyAustralia offered $20,000 compensation as assessed by the Valuer-General's office in relation to an easement. 200 By response on 15 August 2001 Mr Lyons said that the easement would nullify the value of the land and again asserted that the value of the property was $1.082 million. He threatened to demolish the electricity infrastructure (Ex A1 p 248/249). In that letter Mr Lyons asserted (apparently incorrectly) that the square metreage rate for acquisition of the subject land was calculated and agreed 11 years ago. 201 On 24 August 2001 EnergyAustralia reiterated the existence of its statutory right and said it would respond in relation to valuation issues. 202 On 11 January 2002 Mr Newland was advised by Mr Warwick Weekley within the Property Office – Network Easements and Lease, at EnergyAustralia, that the State Valuation Office had increased the compensation figure from $20,000 to $60,000. A subsequent email by him on 4 February 2002 noted that a before and after method (ie the difference between the property's value immediately prior to and following the acquisition of the easement) had been used and that a higher before figure had been adopted to reflect an increase in the market value of the land "and to resolve all issues in favour of the dispossessed landowner". 203 In November 2002 a caveat was lodged on the title by the State Crown Solicitor on behalf of the Crown, claiming a charge on the land for unpaid land tax (Ex AB p 137-139). 204 Mr Lyons gave evidence that in or about February 2003 the Family Court made orders restraining him from selling, transferring or encumbering a range of his assets (a fact on which Mr Lyons in part relied to counter the criticism that he had taken no, or few, steps to proceed with the intended fast food outlet on the site at an earlier stage). Whether any such order directly or indirectly bound the Lyons entities is not clear to me. 205 The Stamatakis loan was not repaid on 7 April 2003 (see Ex AB 140) and, in accordance with the terms of the mortgage, a higher default rate of interest thereupon became payable. On 28 April 2003, solicitors for the mortgagee advised that a further extension of the mortgage was unable to be given. 206 On 30 April 2003, Mr Lyons wrote to Mr Michael Yabsley (as a political lobbyist) seeking his assistance "to facilitate a very fast track negotiated settlement" with EnergyAustralia, among other things to have EnergyAustralia acquire the whole of the land at its appropriate commercial value (which, it was said, "may be as much as $1.5 million"). On a square metreage comparison with the price obtained for Lot 1, Mr Lyons put the value of the subject land at $1,082,176. However, with the "EnergyAustralia impediment" he said, "it may be very lucky to be worth $50,000" (Ex AB pp 141-143). In that letter Mr Lyons (as he later did when instructing expert valuation witnesses) suggested (erroneously) that the sale price of $150,000 had been agreed with the Crown several years before the 1998 sale. Mr Lyons asserted that (with the impediment) "the prospective commercial land use would now be 'zero'". 207 On the same day, Mr Lyons wrote "without prejudice" to the mortgagee's solicitors referring to alleged indications given to him (back in 2001) that upon expiry the loan was likely to be further "rolled and/or extended". Mr Lyons said that "Based upon such assumption and your non-explicit verbal assurances, we had not anticipated any early repayment" (which it might be thought – and certainly from their response seems to have been read – as setting the ground for a later claim based on estoppel or misrepresentation against the mortgagee or its solicitors). That letter asserted that the presence of the "unauthorised and unwanted illegal impediment to the land, if allowed to continue, would render the land close to worthless, and … accordingly make re-finance virtually impossible!" The land, it was said, appears in the short term to be "near worthless". (Ex A1, Tab 34). There was no evidence that at this stage Mr Lyons was taking steps to arrange such refinancing. 208 On 28 May 2003, Mr Lyons' solicitors formally demanded the removal of the infrastructure by EnergyAustralia. 209 This led to a critical meeting – a meeting on 11 June 2003, attended by Mr Lyons and his solicitor, Mr Wawn, on the one hand and by Ms Campion, a senior legal officer of EnergyAustralia, and Mr Newland on the other hand. 210 I consider this meeting in more detail later in these reasons. However, for the purposes of the overall chronology I note that there is a dispute as to whether or not that meeting was conducted on a without prejudice basis. 211 More critically, there is a dispute as to whether or not any binding agreement was reached at that meeting pursuant to which EnergyAustralia was obliged to remove the electricity infrastructure (or, alternatively, whether it represented to Mr Lyons that it would do so within a particular time). 212 After the meeting, Mr Newland prepared some typed minutes. His evidence is that he typed them himself in the afternoon of the meeting (ie about four hours after the meeting). 213 In evidence were two different copies of emails from Mr Newland to Ms Campion at about 5.58 pm on 11 June 2003 attaching the draft minutes. Each is in different font (and with a different time clock) to the other. Mr Newland could not explain the difference. It seems to me (without the benefit of any expert evidence as to whether or not the respective computers could technically have been manipulated to change the time or date recorded in respect of the email transmission) that the likely explanation is the one proffered by Mr Newland, that it depends on whose computer it was from which the respective copies were printed. Mr Newland gave evidence that he still has the email on his computer system. 214 I accept Mr Newland's evidence that the minutes were prepared by him that afternoon. In terms of a contemporaneous recollection of the discussion at that meeting, Mr Newland's minutes provide the best (and practically only) source. He clearly anticipated that they would be provided to Mr Lyons and his lawyer, since he suggested that Ms Campion review them and if appropriate send them out. I would therefore infer that he prepared them expecting that any inaccuracy in the minutes would be noted; and so took due care in their preparation to ensure that they fairly reflected what had been discussed. 215 There was no real suggestion that the minutes were created at a time when Mr Newland's recollection of the discussion was not fresh in his mind. The timing of the emails under cover of which he forwarded the draft minutes to Ms Campion is consistent with his recollection of events. Where there is a conflict in the evidence of what occurred at the meeting I would prefer the version appearing on the face of the minutes. 216 Mr Newland identified Mr Amir Hanna and Mr Trevor Armstrong within EnergyAustralia as the persons responsible for authorising the work. As at 11 June 2003 it was his view that if an easement could not be negotiated, the infrastructure would need to be removed. He gave evidence that he spoke to Mr Hanna on 11 June 2003 after the meeting with Mr Lyons and Mr Hanna "agreed that he would handle the authorisation of the works" (17/11/08 T 34.36-41). This conversation was before Mr Newland contacted Mr Chin (the engineer within EnergyAustralia with responsibility for relocation of transmission lines), by email sent at 6.02 pm, and advised Mr Chin as follows: After today's meeting with Mr Lyons it appears we will be going ahead with the relocation of our 132 kV pole line from his property to the unformed road, hooping up to the tower line mains along the span. Could you now undertake a more detailed review of the preferred option, and provide Amir Hanna with an estimated cost and completion date so that we can arrange an IPO for the work to be completed on the compliance budget. On receipt of the IPO, please initiate the environmental review ASAP so that works can proceed in accordance with the time frame discussed at our last meeting". 217 There is some doubt as to whether the "preferred option" in this email refers back to what Mr Newland and/or Mr Chin saw as the preferred way of physically effecting the removal of the infrastructure or, rather, that its removal was the preferred option for EnergyAustralia (as opposed to compulsory or other acquisition of an easement or any other option it may have had to resolve the dispute). Used in this email, and the later July communication between Mr Chin and Mr Newland, "preferred option" must bear the former meaning. In terms of what was discussed at the 11 June 2003 meeting, however, it seems more likely that any reference to a "preferred option" was in the context of what would be the least costly option for EnergyAustralia to resolve the dispute. 218 Mr Chin responded to Mr Newland on 16 June 2003 with advice that the estimated cost would be $67,000, with the estimated completion date of nine weeks from receipt of an internal purchase order (IPO). 219 On 19 June 2003, an IPO was issued (signed by Mr Amir Hanna, "Manager – Asset Compliance – SAM" and Mr Trevor Armstrong, "manager – SAM") for the relocation of the infrastructure. This included the specification of the delivery date as "to be completed by 30 September 2003" and referred to Mr Chin's 16 June 2003 email as the suppliers quotation reference. 220 There is no suggestion that there was any communication at this stage to Mr Wawn or Mr Lyons in relation to the matters discussed at the 11 June meeting. Mr Newland suggested that the reason an IPO was issued at that stage was to minimise delay. Mr Newland said that the issue of an IPO did not mean that the work would be done. However, there is nothing on the face of the IPO to suggest it was in any way provisional. 221 EnergyAustralia appears to have proceeded, following the 11 June meeting and issue of the IPO, as if a decision had been made to proceed with the works and it took various steps, (including obtaining an environmental assessment clearance) to do so. It is not apparent to me when any such decision was made. 222 On 7 July 2003, there was an internal notification within EnergyAustralia that the works would be scheduled to commence in early September. Mr Shaun Lenehan (who Ms Campion identified as being from EnergyAustralia's Environmental Services Unit) emailed Ms Campion on 7 July 2003 as follows: Peter Chin tells me that they are planning to commence work at Cronulla in early September 2003. He says that the work should take one to two weeks to complete …" 223 On 8 July 2003, Mr Chin advised Mr Newland by email of details in relation to the two options for the relocation of the electricity infrastructure. 224 On 11 July 2003, Ms Campion wrote to Mr Wawn. That letter, headed "without prejudice", said: Subject to satisfactory environmental assessment, EnergyAustralia intends to relocate the pole and stay poles on your client's property early in September 2003. I have sought and am awaiting instructions in relation to your client's views on rent. 225 Ms Campion says that she also, by DX later that day, forwarded to Mr Wawn minutes of the 11 June meeting which had been prepared by Mr Newland. Mr Wawn denies having asked for or having received any minutes from Mr Newland. 226 On 12 September 2003, a notice of default under the Stamatakis mortgage was served on the Lyons entities. This was a default in repayment of principal. The notice was served under cover of a letter denying that anyone on the mortgagee's behalf had led Mr Lyons to believe the mortgage would be automatically extended but also noting that Mr Lyons' April letter had indicated a further six months was required in which to refinance and that hitherto the mortgagee had declined to give instructions to issue a 57(2)(b) notice (ie Mr Lyons had by then had the benefit of about five months' grace in terms of the exercise by the mortgagee of its rights). Repayment of the principal sum was required within three months. 227 On 16 September 2003, Mr Wawn wrote to EnergyAustralia saying there were difficulties with financiers. This is the first documented evidence of EnergyAustralia being on notice of any financial pressure underlying Mr Lyons' request for removal of the infrastructure (Ex A1 p 305), although in oral evidence it was said by the Lyons' witnesses that this was discussed at the June 2003 meeting. Moreover, there is some suggestion that this letter was not received by EnergyAustralia (a later follow up call by Mr Wawn produced a request for the letter to be re-sent; and the first response within EnergyAustralia to this issue was in December 2003). 228 On 18 September 2003, the first of a series of delays was encountered in relation to the relocation works – namely, the discovery that there was insufficient stock of insulators and that delivery of future supplies was not expected until 27 October 2003. 229 On 22 September 2003, Mr Chin advised Mr Newland by email that the diversion work had been scheduled during the first week of November and that it was estimated the work would stretch over one week (Ex A1 p 307). 230 The second delay was on 13 October 2003 when Mr Chin was requested to accommodate a request by Caltex Oil to defer the "outage" required for transfer of the transmission lines. (I interpose to note that it would seem EnergyAustralia took the view that it should prioritise the needs of a large consumer (Caltex) over the relocation works which had been requested by Mr Lyons and which, by this stage at least, it seems EnergyAustralia had decided to effect.) 231 A third delay occurred due to rain. On 27 November 2003 Mr Chin advised Mr Newland and Ms Campion that "the diversion work schedule for last week" had to be cancelled due to rain and that the work had been rescheduled to 15-18 December. 232 Ms Campion wrote to Mr Wawn on 1 December 2003 advising that because of the delay due to the rain the supply diversion work to install the new pole, previously scheduled for 24-26 November 2003, had been rescheduled to 15-18 December 2003. 233 On the same day Ms Campion emailed Mr Newland and a Mr Colin Peacock that: The solicitor for the owner says that the owner is having trouble refinancing the property because there is a proposed easement marked on the title. They will undoubtedly attempt to recover damages for our delay in moving the pole. 234 Mr Newland responded: I think we should resist any attempt to claim against delays in our relocating the poles, firstly because they are not attempting to sell the land, and secondly because if it was only the mention of a proposed easement on the title deeds that was troubling their new lenders, then they should have approached us about removing it, since they were already aware that we were taking action to remove the poles and so a proposed easement would not be required. 235 The Lyons entities sought to rely on EnergyAustralia's internal response (namely the above exchange of emails) to the correspondence (in September 2003) in which EnergyAustralia was put on notice of the financial difficulties then faced by Mr Lyons as amounting, in effect, to an admission that EnergyAustralia was bound to remove the electricity infrastructure by early September. In that exchange of internal emails, Ms Campion warned that Mr Lyons would no doubt seek damages for delay in the removal of the infrastructure and Mr Newland exhorted her to resist any such claim. 236 I do not read this exchange as any admission of liability. Rather, it is consistent with EnergyAustralia anticipating that Mr Lyons would (as he appears to have done in other circumstances, including with his mortgagee) resort to threats of claims for damages as a means of attempting to secure the action (or, in the case of his mortgagee, inaction) he desired. 237 On 5 December 2003, EnergyAustralia lodged with the Land Titles Office a request dated 3 December 2003 to remove the reference on the title to DP 1015819 (giving notice of the application for a proposed easement for electricity purposes). 238 On 10 December 2003, the fourth delay to the works arose when it was decided that because of the ground fill there would need to be geotechnical assistance. An investigation report was commissioned in relation to the foundations for pole 28. That report, dated 23 December 2003, by Douglas Partners identified the poor foundation conditions which it is said were unsuitable for support of the pole foundation and recommended methods to address this issue. 239 On 23 December 2003, Mr Stamatakis (the mortgagee) notified the Lyons entities that the mortgagee would be exercising its power of sale. 240 On 21 January 2004, these proceedings were commenced, in which initially the Lyons entities simply sought damages for trespass. 241 On 30 January 2004, Mr Newland advised Ms Campion that the earliest completion was likely to be early April. 242 During February 2004, further consideration was given to the need for geotechnical investigations in relation to the foundations and on 10 February 2004, Mr Chin recommended additional capital expenditure of $71,000 to complete the work required for the relocation of pole 28. An amended IPO was issued with a revised completion date of 30 April 2004. 243 By letter dated 25 February 2004, to Herron Todd White, Mr Lyons wrote: Whilst this action [against EnergyAustralia] continues we have, in informal talks, received an acknowledgement from EnergyAustralia that they have no right to the easement, and subsequently I am reliably informed that the notation has been removed, and that they are in the process of physically removing the offending poles and electrical apparatus. (Ex B Tab 19) The letter also says During the course of the dispute and because of this "horrible" encroachment, we have not been able to lodge a DA for the anticipated two fast food outlets. We have been granted a number of extensions to the previous title impediment, we have not been able to obtain a satisfactory fresh valuation. 244 Again, this seems to place a gloss on the actual situation – certainly insofar as it is suggested there had been any acknowledgement by EnergyAustralia and in relation to the period of "grace" allowed from April 2003, which cannot, in my view, be described as an "extension" as such (thought there was an extension from 2001 to which the letter might have been referring). Advice was sought as to whether Herron Todd White were aware of any mortgage brokers who could assist. This seems to be the first real step taken by Mr Lyons (following service of the mortgagee's notice of default) to seek any further finance. 245 Over part or all of the period from acquisition of the subject land the Lyons entities had cash flow difficulties – they had been unable in early 1998 to obtain funding in time to forestall the mortgagee's exercise of rights in relation to Lot 1 (though Mr Lyons said funding approval came through the day after the sale); they did not seek alternate finance through Mr Muhs (Mr Lyons' co-director) for the development of the land (even though Mr Lyons was confident it would have been available) and Mr Lyons frankly conceded that in that period for some time his mind was on other things – he said that he had a financial empire falling down around his ears and by about 2003 he was involved in a family law dispute with his then wife (or, to use his words, his latest ex-wife). 246 Nevertheless, Mr Calleia (the Lyons entities' accountant who was called as an expert for the Lyons entities) gave evidence that Rosebanner Pty Limited, as trustee of the LIEL Holdings Trust, had the ability to obtain whatever operational funds it needed (by calling in unsecured intercompany loans). Mr Calleia confirmed that the assets of Rosebanner, as trustee, were largely comprised of unsecured intercompany debt. 247 Mr Lyons did not seem to make a concerted attempt to refinance the Stamatakis mortgage (perhaps because his view, rightly or wrongly, was that such an attempt would be futile). Rather, as with the mortgage for Lot 1, he allowed matters to run, in effect, right "to the wire" before seeking to take steps to refinance or to improve the saleability of the land. 248 On 23 March 2004, Mr Wawn wrote to the solicitors for the mortgagee, on behalf of Mr Lyons, threatening proceedings for orders to restrain the sale of the property if the mortgagee proceeded with the foreshadowed exercise of its rights. Significantly, Mr Wawn wrote (in a letter which had been reviewed and amended by Mr Lyons) that: … by September 2003 we have received a definite indication from EnergyAustralia that the apparatus would be removed and the easement also taken off the title (Ex AB p 149/150 and see Ex G which was the draft letter annotated in part by Mr Lyons) The letter also stated that: Our client has had extreme difficulty in obtaining a suitable valuation of the property with the electricity impediments on it and hence has been thwarted in refinancing the property notwithstanding his attempts to do so. 249 Mr Lyons' letter dated 30 March 2004 to Richardson and Wrench (who were apparently acting in relation to the sale of Lots 1234/5 at that time) asserted (again without any factual foundation as far as I can see) that "They [EnergyAustralia] have agreed that this is a case of trespass". His letter also said, "they have agreed to move the physical impediments [which would be consistent with the allegation made in these proceedings, but for the fact that Mr Lyons went on to assert], and this has been as a result of an action in the Supreme Court, Equity Division" (my emphasis). (As the alleged agreement on which the Lyons entities rely in these proceedings is one which was reached, at the latest on 11 July 2003, six months or so before the commencement of the current proceedings it is hard to see how the agreement which has been sued upon could be said to have been as a result of the proceedings) (Ex AB pp 151-152). 250 On 3 April 2004, there was a public auction at which the subject land was sold (to the Galanos Brothers, who owned Lot 1) for $600,000. The contract for sale (Ex A2 tab 74.2) was conditional, being subject to a right of rescission if the electricity infrastructure was not removed within six weeks. 251 On 30 April 2004, the infrastructure was removed and on 24 May 2004 the sale of the land to the owner of Lot 1 was completed. 252 On 27 March 2006, Galanos obtained a development consent for the construction of a health club on Lots 1234/5. That development consent was granted on a deferred commencement consent basis subject to certain conditions specified therein. Contract claim 253 The second basis on which the Lyons entities bring a claim against EnergyAustralia is for breach of a contract made either on 11 June 2003 or on 11 July 2003 by a combination of events on both 11 June and 11 July 2003. 254 The contract alleged to have been made is one pursuant to which EnergyAustralia is alleged to have agreed to remove the electricity infrastructure within a period of approximately four months, in consideration for which the Lyons entities agreed to forbear from taking proceedings at that stage in relation to the alleged trespass. Taken from 11 June 2003, this time frame would mean a removal date by about mid October 2003; taken from the later date on which on the alternative claim a contract is said to have arisen this would be mid November 2003. · Was the meeting "without prejudice"? 255 The first main issue in dispute in relation to the contract claim was whether the 11 June 2003 meeting was conducted on a "without prejudice" basis. Each of the participants gave evidence of what had occurred at the meeting. 256 As a matter of law, it is not necessary to label a communication "without prejudice" in order for the communication to be clothed with "without prejudice" privilege, nor is it sufficient to clothe a communication with privilege that the communication be so labelled: GPI Leisure Corporation v Yuill (1997) 42 NSWLR 225; Rodgers v Rodgers (1964) 114 CLR 608 at 614; Rush & Tompkins v Greater London Council [1989] AC 1280 at 1299; Field v Commissioner for Railways for New South Wales (1957) 99 CLR 286 at 291. Unfortunately, there seems to be a common misapprehension in practice that the affixing of a without prejudice label (or the absence of any such description) is determinative of the issue. 257 What is necessary is that the communication be made in the course of bona fide attempts to resolve a dispute. Thus in Quad Consulting Pty Limited v David R Bleakley & Associates Pty Limited (1991) 27 FCR 86, Hill J said at 662: It is clear enough law that whether negotiations are within the concept of the privilege, that is to say, "without prejudice", depends not on whether the parties have so labelled them, but upon the intentions of the parties to be ascertained from the nature of discussions or negotiations between them: Davies v Nyland (1975) 10 SASR 76 at 89-90; Bentley v Nelson [1963] WAR 89. Thus, even where the parties have not expressed the communication as being "without prejudice", privilege will nevertheless attach to communications between them which are genuine negotiations with the intent to compromise an existing dispute: Rodgers v Rodgers (1964) 114 CLR 608 at 614; Rush & Tompkins Limited v Greater London Council [1989] 1 AC 1280 (HL) at 1299-1300. 258 Here, the 11 June 2003 meeting was convened shortly after the first letter from Mr Wawn to EnergyAustralia demanding removal with 14 days of the electricity infrastructure (under threat of litigation). 259 Mr Wawn's affidavit of 24 August 2005 deposes to a conversation with Ms Campion in which Mr Wawn says Ms Campion said: I am the in house lawyer for EnergyAustralia. I have seen your letter of 20 May 2003 … and we would like to have a meeting next Tuesday or Wednesday to try to resolve the dispute . (My emphasis) 260 In Ms Campion's affidavit of 22 July 2005 (on its face unclear as to whether it was sworn or affirmed), Ms Campion says that on or about 5 June 2003, she telephoned Mr Wawn and had a conversation in words to the effect: EnergyAustralia would like to propose a "without prejudice" meeting with you and your client to discuss ways of resolving this dispute. and she says that Mr Wawn said he agreed in principle with that. Ms Campion's email of that date sent at 2.00 pm to Mr Newland (Ex A1 Tab 37) stated that Mr Lyons' solicitor had agreed in principle to a "w/o prejudice" meeting on either Wednesday or Thursday of the following week. The contemporaneous evidence suggests that, at the very least, Ms Campion understood what she had proposed was a without prejudice meeting (whether or not she used those actual words in her conversation with Mr Wawn). 261 Mr Wawn's account of this conversation in his affidavit sworn 24 August 2005 (set out above) omits the words "without prejudice", but he nevertheless accepts that the meeting was proposed in order to discuss potential resolution of the dispute. 262 Ms Campion deposes to a further conversation that day in which she said to Mr Wawn: I'm phoning to confirm that our without prejudice meeting will be held at your offices at noon on Wednesday 11 June" and to which she says that Mr Wawn responded, "Agreed and confirmed". 263 There seems no doubt that the meeting which was proposed was capable of constituting a without prejudice meeting, being convened for the parties to seek to resolve a dispute between them. 264 Ms Campion deposes to the meeting commencing by Mr Wawn saying words to the effect: We have agreed to conduct without prejudice negotiations to see how best we can resolve the matter of EnergyAustralia's poles crossing onto my client's property. 265 Both Mr Lyons and Mr Wawn deny that this was said. However, given that Mr Lyons was not present at the start of the meeting, it is conceivable that Mr Lyons may simply not have been present at the time of any such statement, so I place little weight on this denial (and cannot draw any conclusions as to his credit from this denial). 266 Mr Wawn said it was important to him that the meeting be on the record, but that it was not his practice to say if a meeting was to be held on the record; rather, his practice was only (which he says in this case he did not do) to say if a meeting or discussion was to be without prejudice. 267 Mr Newland's affidavit of 20 September 2005 also referred to the conversation and deposed to Mr Wawn saying: Well we suggest this be a without prejudice meeting. Our intention today is to determine how we are to resolve the matter of your poles and lines crossing onto Mr Lyons' property. 268 Mr Newland's minutes of the meeting record Mr Wawn as having said that the meeting would be held on a without prejudice basis. Mr Newland's minutes state: SW suggested that this should be a "without prejudice" meeting, intended to determine how best to resolve the matter of our poles and lines crossing Mr Lyons' property, preferably without the need to take the matter to a court. 269 As I have said, in general I would accept Mr Newland's minutes (being prepared shortly after the meeting and apparently with a view to obtaining confirmation from Mr Wawn as to their accuracy) as the most reliable account of what transpired at the meeting. It is possible that Mr Newland's recollection of the "without prejudice" reference was coloured by the fact that he had gone into the meeting expecting that it might or would be held on a "without prejudice" basis but there is nothing to suggest that as at 11 June 2003 Mr Newland realised that this later would be an issue and his minutes directly attributed these words to Mr Wawn. Further, the likelihood that Mr Wawn opened the meeting with some kind of introductory words referring to the need for resolution of the dispute as to the electricity infrastructure accords with the somewhat proprietorial approach he seems to take when meetings are held in his office (evidenced by the response he gave as to why he is certain he did not ask for a copy of minutes of this meeting – since he would be the one to take any minutes of a meeting at his office). 270 Mr Newland in his affidavit sworn 30 October 2006, said that he had a "very strong recollection" of Mr Wawn saying the meeting would be "without prejudice" because the words were not very familiar to him and, following his discussions with Ms Campion, he had expected her to make that comment. 271 As to the issue of credit, I am troubled that, of the two persons present at the meeting who should best have understood the implications of a meeting being held on a without prejudice basis, (and, I would have thought, to be concerned as solicitors to ensure there was no misunderstanding as to the basis on which the meeting was conducted) both gave starkly inconsistent accounts as to what was or was not said in this regard. 272 The precise way in which Ms Campion gave her evidence makes me think it likely that she would have been careful at the time to note whether or not the meeting was on a without prejudice basis. Mr Wawn, for his part, did not strike me as having paid careful attention to a number of details about the meeting and seems to have taken a broad brush approach to this and other matters (such as the scope of the initial claim as pleaded). It seems to me he may well have put out of his mind (and not later recalled any comment about "without prejudice") once he formed the view that an agreement of the kind he now believes (or any undertaking of the kind he first thought had been reached) was reached at the meeting. Hence his recollection on this point, without casting any aspersion on his credibility, seems to me likely to be unreliable. 273 However, ultimately it is not necessary to make a finding on this issue, as I think (whatever was or was not said on that matter) the discussion which took place was clearly clothed with "without prejudice" privilege. In relation to any conflict as what was said at the meeting, I prefer the minutes of Mr Newland (as being more detailed and more reliable) than either the oral accounts given by the other participants or the only contemporaneous record (Mr Wawn's file note) which purports to summarise the outcome of the meeting. 274 On both Mr Wawn's and Mr Lyons' evidence, it was made clear to EnergyAustralia that the Lyons entities were seriously contemplating (if not indeed threatening) litigation. There is nothing to suggest that the parties in attendance at the meeting were not intending in good faith to seek a resolution to the dispute. It is clear from the evidence that there was a long history of dispute on Mr Lyons' part as to the entitlement of EnergyAustralia to leave the installations on the subject land. The submissions put by the Lyons entities in this proceeding referred to several attempts to remove the infrastructure. Mr Wawn was clearly on notice that the proposed meeting was for the purpose of EnergyAustralia trying to settle the dispute. 275 In my view unless it had been made clear that the meeting was to be held "on the record", the communications at that meeting would as a matter of law be subject to "without prejudice" privilege (even if, as the Lyons entities' representatives contend, nothing was said expressly to that effect). Accordingly, I find that the meeting was held on a without prejudice basis. 276 Of course, the fact that a meeting is held on a without prejudice basis does not preclude a finding that a binding agreement was reached at the meeting, nor does it preclude reliance on communications made at such a meeting for the purpose of enforcing a settlement reached at such a meeting Quad Consulting citing Bentley v Nelson [1963] WAR 89; Walker v Wisher (1889) 23 QBD 335; Tomlin v Standard Telephones and Cables Limited [1969] 1 WLR 1378. 277 The relevance, if any, of this dispute (other than as it was put as to credit) seem to me only to be as to the submission (made by EnergyAustralia for the first time in its closing submissions) that representations made on a without prejudice basis or during a without prejudice meeting in an attempt to resolve litigation are not made in trade and commerce for the purposes of the Trade Practices/Fair Trading legislation. I consider that submission later. · Consideration 278 Before turning to whether any terms of an agreement were concluded, I note that there is no doubt that the giving up of a seriously asserted bona fide claim can constitute good consideration (even if, as here, that claim might ultimately have failed). Mr Webster cited Callister v Bischoffsheim (1870) LRJ QB 449; McDermott v Black (1940) 53 CLR 161; Wigan v Edwards (1973) 1 ALR 497 and Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 in that regard. 279 Whether there was an express agreement to forbear is another issue. Nothing was said about this in the first affidavits sworn in August 2005 by Mr Wawn and Mr Lyons, respectively. 280 In Mr Wawn's affidavit of 6 October 2005, he says that at the 11 June meeting he said: On the basis that the poles and wires are removed within about four months, that is by early September, my clients will not take any further action. 281 I interpose that it seems to me significant in this regard to note that four months from June 2003 is not early September. It is early October. Accordingly, Mr Wawn's recollection in October 2005 as to what was said at the 11 June 2003 meeting appears by this stage to have been influenced by Ms Campion's letter of 11 July 2003, which is the first written reference to an early September relocation. 282 In his affidavit of 6 October 2005, Mr Lyons said: I recall that during the meeting held with Stephen Wawn, Penny Campion and Mr Newland in Mr Wawn's office on 11 June 2003 that Mr Wawn also said to Ms Campion words to the effect: My clients want the electrical apparatus removed from their land. Mr Lyons has been trying to get it off for several years. It must be removed or we will have to commence Court action to get it off the land. … Mr Wawn then said words to the effect: If the poles and wires are removed within about four months, we will not take any Court action. 283 Mr Lyons, in his affidavit of 4 July 2007, filed on 5 July 2007, swore that: At the meeting it was agreed that in consideration of the plaintiffs forbearing to sue EnergyAustralia immediately for removal of the infrastructure EnergyAustralia would remove … within approximately four months from the date of that meeting, or by early September 2003. 284 That part of Mr Lyons' affidavit was objected to by EnergyAustralia and I rejected it but gave leave for oral evidence to be adduced as to what was said which gave rise to the conclusion expressed in that paragraph. In the exercise of that leave, Mr Lyons did not recall any statement in relation to forbearance from suit. There was no reference to this in Mr Newland's minutes. Therefore, I think it more likely that no such express statement was made. 285 Whatever was or was not said as to "forbearance" from suit, it is clear from both Mr Wawn's and Ms Campion's evidence that the meeting was convened in an attempt to resolve the dispute. Reliance is placed by the Lyons entities in this regard on the evidence given by both Ms Campion and Mr Newland as to their understanding of the purpose of the meeting being to resolve the issues. It seems to be accepted that whether at the meeting or beforehand the threat had been made that unless agreement was reached the Lyons entities would take the matter to court. 286 Therefore I think I would infer that if an overall consensus had been reached between the parties at the meeting as to how to resolve their disputes, then any acceptance by Mr Lyons of that consensus would carry with it an implied agreement by the Lyons entities in turn to forbear from suit. 287 That said, the existence of an outstanding issue (namely, the rent claim) may make such an inference problematic; since it might then be unclear to what the forbearance related (ie just a claim for removal of the poles, or forbearance from any suit whatsoever). 288 In the event, it is not ultimately necessary to determine this issue because, for the reasons I set out below, I do not consider the evidence supports the conclusion that at the meeting EnergyAustralia manifested its agreement to remove the electricity infrastructure or that there was objectively ascertained, a common intention of the parties immediately to be bound to such an agreement. 289 Although Ms Campion (the senior legal officer of EnergyAustralia present at the 11 June meeting) and Mr Newland (the EnergyAustralia engineer present at that meeting) each gave evidence that he or she did not have authority to make the decision on behalf of EnergyAustralia to proceed with relocation works, as Mr Webster has noted lack of authority forms no part of the pleaded defence in this case. 290 Had such a defence been raised, the Lyons entities would no doubt have wished to adduce evidence and/or advance argument as to any implied or ostensible authority held by Ms Campion and Mr Newland. 291 In the circumstances, had I found an agreement to have been reached at the 11 June meeting I would not have held it to be unenforceable for want of authority. · Was there an agreement? 292 Whether a binding agreement was reached at the 11 June meeting (or later, by a combination of what was said at the 11 June meeting and in the 11 July letter from Ms Campion) turns on two issues – as a matter of fact, did the parties reach agreement as, or to the effect of that, alleged; and, if so, was it the parties' common intention (objectively ascertained) immediately to be bound by that agreement. The latter arises quite starkly from the informal way in which the alleged agreement was recorded and the context in which the meeting was held. 293 The decisive issue, as stated by McHugh JA (as he then was) in G R Securities v Baulkham Hills Private Hospital Pty Limited (1986) 40 NSWLR 631 at 634, is the intention of the parties. This must be objectively ascertained from the terms of the document when read in the light of the surrounding circumstances. The relevant intention is not the individual subjective intentions of the parties but rather what the law takes to have been their intentions at the relevant time (Mahoney JA in B Seppelt & Son Limited v Commissioner for Main Roads (1975) 1 BPR 9147 at 9151). In the process of negotiation, parties may reach an interim consensus which nevertheless does not amount to a binding agreement upon all of the terms of the proposed transaction. See also Palmer J in R T & Y E Falls Investments Pty Limited v The State of New South Wales & ors [2001] NSWSC 1027, referring among others to Film Bars Pty Limited v Pacific Film Laboratories Pty Limited (1979) 1 BPR 9251 at 9254 ff; Air Great Lakes Pty Limited v K S Easter (Holdings) Pty Limited (1985) 2 NSWLR 309; Baulkham Hills Private Hospital Pty Limited v G R Securities Pty Limited (1986) 40 NSWLR 622 at 627; and G R Securities v Baulkham Hills Private Hospital Pty Limited at 634. 294 I note that in R T & Y E Falls Investments, Palmer J accepted that, as a general rule, when parties had been negotiating a substantial commercial transaction in the common expectation that at some stage a formal contract would be brought into existence, the court should be reluctant to find a common intention that a binding informal contract should come into existence at any time prior to the execution of the formal document; especially when the terms of the alleged informal contract would have to be pieced together or implied from various conversations and from selective extracts from correspondence. 295 I turn first to the question of whether the parties did reach any agreement at the 11 June 2003 meeting. · 11 June 2003 meeting – matters not in dispute 296 As to what transpired in the meeting itself, there are some matters which are not in contest. 297 First, Mr Lyons was running late (about 20 minutes) for the meeting (though there is a dispute as to whether this meeting had commenced in any meaningful way by the time he arrived). 298 Secondly, Mr Lyons and Mr Newland, respectively, did most of the talking at the meeting. Having observed Mr Lyons in the witness box I have no difficulty in accepting that he would have done most of the talking on the part of the Lyons entities. There is (as must be evident from the facts recounted above) a lengthy history to this dispute. Mr Lyons, understandably, was keen to outline that history in some detail for the court (and in so doing noted that he was not following his barrister's advice, which I infer was to be succinct) as he no doubt also did at the 11 June meeting. 299 I was urged by Counsel for EnergyAustralia to form the view that Mr Lyons' evidence was largely self-serving. However, Mr Lyons' loquacity in the witness box, in my assessment, was more likely to be attributable to his inability to tell his story or to answer questions concisely than to any attempt by him to avoid answering the questions which were put to him. The quality of Mr Lyons' responses, in this regard, were largely the same when questioned by his own Senior Counsel. Mr Lyons had no apparent difficulty conceding matters which he might have thought could reflect poorly on him (such as accepting that at times he placed different emphasis on matters to suit his business purposes as in his negotiations for the purchase or sale of the subject land), though he also sought to offer explanations for his conduct which might put it in a more favourable light. 300 Mr Lyons' own correspondence seems to have been self-serving insofar as in a number of instances (on which I have already commented) it put an advantageous gloss on (or was clearly inaccurate in relation to) matters on which Mr Lyons was apparently relying to elicit a favourable response (from the likes of the mortgagee, for example). Therefore, I have approached Mr Lyons' evidence with some caution (or, to use the more colloquial expression, with "a grain of salt"). 301 Thirdly, and surprisingly in my view, neither of the solicitors present took notes during the meeting. I say, surprisingly, because it is accepted by each of them that he or she was not doing much of the talking at the meeting (and so could presumably have taken notes of part or all of the discussion or any accord reached during the discussion) and they appear to have seen this meeting as an opportunity to resolve matters without the need for (costly) litigation. On Mr Wawn's part, he said the meeting was regarded as a very important meeting (it being for that reason that Mr Wawn says he is absolutely certain it was not held on a "without prejudice" basis). 302 A contemporaneous written record of the discussion is something I would have expected both solicitors to regard as high desirable, if not essential, when participating in a negotiation seeking resolution to their clients' dispute. I would have thought that both solicitors, as a matter of ordinary prudence, would have kept notes of the meeting; and would have taken care to note whether the meeting was expressed to be without prejudice or not and, particularly, the words in which any promise or agreement was made at the meeting in relation to the removal of the infrastructure. Neither did so. 303 Nor did either of the solicitors later prepare any detailed note of the discussion after the meeting. Mr Wawn prepared a very short file note in summary form, to which I will refer to later; Ms Campion seems to have been content to adopt the minutes of meeting prepared by Mr Newland after the meeting had concluded. 304 The absence of any written record by the solicitors of terms of agreement, or of any subsequent communication clearly seeking to record or confirm the agreement, is to my mind a powerful indication that there was no binding agreement reached at the meeting. 305 Fourthly, if anyone did take any notes at the meeting, it was Mr Newland (though those notes were not in evidence). Mr Lyons' recollection varied on this point, but he did identify Mr Newland as the note taker. Mr Newland could not recall what notes he had taken (and apparently did not keep them) but does not deny having made some notes. However, it does not appear likely that any such notes were extensive, not least because Mr Newland cannot remember them and because he and Mr Lyons were actively occupied in the discussion. 306 Fifthly, at the meeting there was an outline given by Mr Lyons (probably, as appears to have been his wont, in some detail) as to the background to the matter and there was a discussion at the meeting about technical matters relating to the electricity infrastructure; relocation of the power lines; and constraints on development if the lines were to remain or were relocated. · 11 June meeting – what is in dispute? 307 What is in dispute (apart from the alleged "without prejudice" label to the meeting (discussed above) and some of the technical detail of what was discussed) is the critical issue as to whether either of EnergyAustralia's representatives said at the meeting that EnergyAustralia "will remove" the infrastructure in about four months, (as contended by the Lyons entities); or simply said that this was likely to be the least costly option for EnergyAustralia and that if it removed the lines this would be likely to take three to four months and to cost about $80,000 (as contended by EnergyAustralia). 308 There seems to be no dispute that relocation of the power lines (to an area in Woolooware Road North) was an option which was discussed (as was the possibility of a grant of an easement by the Lyons entities) and that an estimate or indication was given by Mr Newland as to the time likely to be involved in the removal of the lines. 309 As noted earlier, Mr Newland prepared a detailed minute of the meeting on the afternoon that it took place. Mr Newland's record purports to be no more than his recollection of discussion in which he was an active participant. It is presumably not a complete record of what was discussed. Not surprisingly, it focuses on technical issues in relation to the electricity poles or their location. Significantly, however, what it does not do is to record (at a time when Mr Newland could not have been aware that there would later be a dispute as to this) any promise or agreement by EnergyAustralia to remove the poles. Relevantly, the minutes record the following: Mr Lyons asked if EnergyAustralia would be interested in negotiating a lease or rental of the land at commercial rates. KN advised that our prime interest was to minimise our costs in retaining this line, and we believed that the best cost option to us at present, was to relocate the line into the unformed extension of Woolooware Road North. This would involve erection of one new pole at the northern end of the road, close to the tower line and relocation of the wires. It may be that the wires would be run across the northern part of Mr Lyons land, but they would be confined to within the existing easement. The costs of this option was around $60-80,000 and would take 3-4 months, allowing time for a review of the environmental issues, ordering of a tall pole to match the tower line, and changeover works. … KN said it was a shame that the line crossed the property at the corner that was most suitable for development, since car parking space was a common use of land under easements. EnergyAustralia's preference was to spend as little money as possible on this section of line, since it may be affected by the large development proposal for the land around Sharks International, if that were to go ahead. … The meeting was then closed, with a request from SW that EnergyAustralia prepare minutes of the meeting for their agreement and consider our position and Mr Lyons request for consideration of some form of compensation 310 There is a curious dispute over whether Mr Wawn requested a copy of the minutes. Curious, because it is hard to see why Mr Newland would have invented such a request had it not been made. And curious because it is not something (unlike the "without prejudice" label which might have been attributable to his earlier discussion with Ms Campion) about which one would think Mr Newland could have been mistaken. There were only three others at the meeting. If someone did ask him for the minutes, it seems likely it was either Mr Lyons or Mr Wawn (since Mr Campion could have asked for them at any time). 311 Mr Newland went to the trouble of noting in the action items that EnergyAustralia would prepare minutes of the meeting. If he had not been asked to provide them, it might be thought there was little point to that action item. Of course, it may simply have been a matter of internal EnergyAustralia practice or Mr Newland's habit to do so. There was no evidence to shed light on this and therefore I place no weight on the presence of an action item to that effect. 312 Mr Wawn says that if anyone was going to minute the meeting he would be the appropriate one to do so. From a practical point of view that might well have been difficult as he had taken no notes of the meeting and he said in the witness box that the technical conversations were over his head. Nevertheless, unless (which Mr Wawn does not say was the case) this was the purpose of the telephone calls he placed to Ms Campion (which she did not return), Mr Wawn does not appear to have chased up the minutes at all (as one would have expected him to do, if he had indeed requested them and not received them in a timely fashion). Ultimately, I think nothing turns on whether or not Mr Wawn asked for the minutes. What is relevant is that Mr Newland's minutes provide the only (and in my view, best) contemporaneous record of what was discussed at the meeting (other than the summary file note of Mr Wawn). 313 The forwarding of the minutes is but one of a number of instances in this matter of documents apparently going astray. Ms Campion says that she sent the draft minutes to Mr Wawn by putting them in the DX box late in the evening on 11 July 2003. There are no DX records to evidence this. Mr Wawn denies receipt of the minutes. There are other documents which either Mr Wawn says were not received by him (the January 2000 Land Titles Office correspondence in relation to EnergyAustralia's request for an easement) or which EnergyAustralia says it did not receive from Mr Wawn (his 16 September 2003 letter). EnergyAustralia, for its part, does not appear to have been particularly diligent in responding to communications from Mr Wawn. Ms Campion failed to return at least two telephone calls from Mr Wawn following the 11 June 2003 meeting. There was no explanation for this. 314 Mr Wawn's file note of the meeting, by contrast with the minutes prepared by Mr Newland, is very short: 11 06/03 Conf. With EnergyAustralia lawyer Penny Campion + engineer Mr Newland + John Lyons. EnergyAustralia has agreed to remove its electrical apparatus from John's land + relocate it on unmade adjacent land. John has also requested them to consider paying him some "rent" for the time the electrical equipment has been on his land. They will do this + advise. It will take them about 4 months to remove the apparatus at a cost to them of $80,000 approx. 1 ½ hrs (Ex A1 p 281) and is no more than a summary or conclusion as to the outcome of the meeting not the discussion. It was put to Mr Wawn that this file note was prepared primarily for billing purposes. He denied that and said that he prepared the note to record the agreement reached at the meeting (12.11.08 T.88.1), which he said was of considerable importance to his clients. 315 If that were his intention, it is surprising that the document was in such summary form and that Mr Wawn did not forward the record to EnergyAustralia for confirmation. Mr Wawn says this was not necessary as there had been no dispute as to the meeting. Nevertheless, I think it extraordinary that if a solicitor attached the importance which Mr Wawn says he attached to the parties having reached a binding agreement in oral discussions, that solicitor would not have sought in some way formally to document or record the agreement and to confirm it with the other party. 316 As noted above in the absence of any contemporaneous notes from the other participants, I regard Mr Newland's minute as being the most reliable record of the discussion which took place at the 11 June 2003 meeting and, unless otherwise indicated, I accept that it is most likely that it is accurate. 317 Turning then to what was said at the meeting about the removal of the electricity infrastructure, there is a clear divergence between the evidence of Messrs Lyons and Wawn on the one hand, and Ms Campion and Mr Newland on the other hand. 318 Mr Lyons' account of the relevant part of the conversation, given in his affidavit sworn 29 August 2005, was After a discussion lasting about 45 minutes Penny Campion said words to the effect: EnergyAustralia will remove the electrical apparatus from your land within about 4 months. I will need to get further instructions in relation to whether my client is prepared to pay any money in the form of rent for my client's occupation of the land since you have owned it. 319 Mr Wawn's corresponding account, given in his affidavit sworn 24 August 2005, was: After a discussion lasting about an hour Ms Campion said words to the effect: EnergyAustralia will remove its electrical infrastructure from your land within approximately four months. Whether EnergyAustralia will pay rent during the period which EnergyAustralia's electrical infrastructure has been on the land will depend on my further instructions. 320 Attention was drawn to the similarity of the language as used in Mr Lyons' and Mr Wawn's affidavits to recount this critical part of the 11 June meeting. 321 Mr Lyons' first affidavit of 29 August 2005 showed on the first page a correction in relation to the identification of the deponent. The typed version of the document identified the deponent as Stephen John Wawn. That name was crossed out in pen and the words "John Howard Lyons" inserted in handwriting in its place. Mr Wawn's evidence was that this was his handwriting. The affidavit bears a word processing reference "SJW:102031" which is exactly the same as the word processing reference on the affidavit sworn 24 August 2005 by Mr Wawn. Mr Wawn witnessed Mr Lyons' swearing of his affidavit and Mr Wawn gave evidence that he was the solicitor mainly involved in preparation of Mr Lyons' earlier (ie 2005) affidavits. 322 Mr Wawn's evidence was that the reason for the error on the face of the affidavit was that his secretary or someone in his office had used for Mr Lyons' affidavit the formal template that had been prepared for Mr Wawn's earlier affidavit but that he had dictated the contents of Mr Lyons' affidavit himself. Mr Wawn's evidence as to what someone in his office had done in relation to the creation of the affidavit can only be speculation as it was not suggested that Mr Wawn had observed the manner in which his secretary had prepared the affidavit. 323 I do not draw any significance from the fact that the same formal template appears to have been used for both affidavits, as this could quite easily have been a matter of clerical convenience. 324 However, it seems to me that there is a difficulty insofar as the two witnesses to the meeting of 11 June 2003 on the part of the Lyons entities clearly conferred in relation to the preparation at least of Mr Lyons' affidavit. 325 At the time at which these affidavits were sworn the pleadings had been amended to include an allegation of misleading and deceptive conduct and there had been a dispute as to whether "without prejudice" communications could be relied upon in that regard. It should have been obvious to Mr Wawn that what was said at the meeting on 11 June 2003 would be a significant matter in dispute. Yet he proceeded to take instructions and draft affidavits for Mr Lyons covering almost precisely the same material as his own affidavits. On its face Mr Wawn's affidavit was sworn first, although presumably Mr Wawn had conferred to some extent with Mr Lyons by then. It might be that Mr Lyons when giving instructions for and swearing his affidavit five days later, independently recalled this conversation in almost exactly the same words but the similarity of the wording in the two affidavits (prepared over two years from the date of the meeting and in circumstances where neither of those deponents had detailed notes of the meeting) suggests that I should treat what is said in those affidavits with some degree of caution, given the unfortunate circumstances that Mr Lyons' affidavit was prepared (or at least dictated) by Mr Wawn. 326 I am mindful that where there are in evidence substantially identical affidavits this may give rise to an inference of collusion between witnesses, which inference in turn may diminish the weight or credit accorded to the evidence of those witnesses. 327 In Macquarie Developments Pty Limited and Anor v Forrester and Anor [2005] NSWSC 674 Palmer J considered the weight to be attributed to two affidavits dealing with critical discussions in virtually identical terms, in circumstances where the evidence was that the solicitor who prepared the affidavits had "copied and pasted" portions from each. His Honour noted that: [I]t is totally destructive of the utility of evidence by affidavit if a solicitor or anyone else attempts to express a witness' evidence in words that are not truly and literally his or her own. Save in the case of proving formal or non-contentious matters, affidavit evidence of a witness which is in the same words as affidavit evidence of another witness is highly suggestive either of collusion between the witnesses or that the person drafting the affidavit has not used the actual words of one or both of the deponents. Both possibilities seriously prejudice the value of the evidence and Counsel usually attacks the credit of such witnesses, with good reason. Where the identity of evidence is due to collusion, the devaluation of the evidence is justified but where, as in the present case, the identity of evidence is due entirely to a mistake on the part of a legal adviser, a witness' credit and a party's case may be unjustly damaged. 328 There, his Honour noted that the solicitor in question was young and relatively inexperienced and accepted the evidence of the solicitor as to how the identity of the affidavit evidence occurred, and that the mistake was an honest one on his part. The explanation, in his Honour's view, entirely removed any suspicion that there had been collusion on the part of the witnesses in the preparation of their affidavit evidence. 329 Here, the solicitor who prepared the almost identical affidavit was not only a more senior practitioner but himself a witness to the very events the subject of the conversation to which his client was deposing. Moreover, at least insofar as the sworn affidavit evidence in relation to what was said about forbearance is concerned, Mr Lyons' oral testimony did not support the version attributed to him in the affidavit prepared by Mr Wawn. 330 Caution in such circumstances was shown by Sperling J in Seamez v Mclaughlin [1999] NSWSC 9 when he said that: Having regard to a high degree of similarity in content, detail, terminology and sequence (particularly in relation to conversations) between the affidavits of the three witnesses, I am satisfied that the affidavits cannot have come into existence without direct or indirect collaboration. 331 His Honour noted that: [a]cceptance of one of the three accounts of the events … means not only that the other two are not genuinely recollected, independent accounts. It also means that the authors of those other accounts have misstated the way in which their respective accounts came into existence, and seriously so. The credit of the others would then be worthless. 332 In Dialog Pty Limited v Addease Pty Limited [2003] FCA 1359 Cooper J did not accept as the witness' independent recollection evidence produced by way of a "cut and paste" exercise. 333 Lindgren J in Lucent Technologies Inc v Krone Aktiengesellschaft (No 3) [2000] FCA 100 considered it doubtful where a witness had read a draft of another affidavit (there another expert) that the views expressed by that witness in his affidavit testimony represented his independent views uninfluenced by the views of others. 334 At the very least, the way in which Mr Lyons' affidavit evidence was prepared must give rise to doubts as to whether that evidence represented his own views uninfluenced by Mr Wawn. While I accept it likely that Mr Lyons expressed to Mr Wawn in no uncertain terms what he recalled of the meeting, the fact that Mr Wawn cast (or perhaps recast) it in such substantially similar terms can be consistent only with the pair having near perfect and identical recall of a particular conversation, some two years later, (which seems unlikely, particularly as the way in which Mr Lyons gave evidence was not in such formal language) or did so in collaboration with each other to an extent which must devalue the weight of their evidence. 335 Relevantly, what Mr Lyons did not recall, in cross-examination, was any discussion in language corresponding to that set out in his August affidavit. Rather, he said: They indicated that it would take some, you know, some couple of months and that they could proceed with manner and it would take – I think they said it was – that it would take about three months or so to – to remove the infrastructure". 336 In Mr Lyons' affidavit of 4 July 2007, he again said: At the conclusion of the meeting, Penny Campion said words to the effect: EnergyAustralia will remove the electrical apparatus from your land within about 4 months. I will need to get instructions in relation to whether my client is prepared to pay any money in the form of rent for my client's occupation of the land since you have owned it. 337 Ms Campion adamantly denies saying the words attributed to her by Mr Lyons and Mr Wawn and says that the minutes prepared by Mr Newland are an accurate account of what was said. Mr Newland says that what he said was: At this stage, EnergyAustralia is considering the least cost option available to it. We would consider relocation, however, this would all be subject to proper planning and environmental assessment given the sensitive foreshore nature of the land and surrounds. 338 Mr Newland denies any statement having been made by him or Ms Campion as to what EnergyAustralia was going to do about the electricity infrastructure if anything. 339 As to the evidence from EnergyAustralia, Ms Campion denied that any agreement was reached at the 11 June 2003 meeting in relation to the relocation of the infrastructure. She maintained (transcript 14/11/08 T 68.49 – T69.5) that "there was a decision that EnergyAustralia had to make" and that "that decision involved a number of considerations". Yet Ms Campion was unable to shed light on who made that decision or how it was made by EnergyAustralia. 340 While Ms Campion gave evidence that the purpose of EnergyAustralia at the meeting was to try to see if development was feasible with the lines remaining on the land, I think by the end of the meeting it must have been very clear to EnergyAustralia that Mr Lyons did not think that development would be feasible with the lines remaining on the land or was not prepared to accept that as a resolution of the dispute. 341 Mr Lyons' recollection accorded with that of Mr Newland insofar as Mr Lyons confirmed that Mr Newland had said EnergyAustralia's "preferred course is to remove the infrastructure and move it to another location close by, all right?" (10/11/08 T 56-6.14) 342 There was no suggestion in Mr Newland's minutes of there being any reference in the meeting to financial difficulties or, as Mr Wawn said in evidence, that the mortgagee was "baying for blood". Mr Wawn, in his oral evidence, said he raised this at the meeting. However, the language of his letter dated 16 September 2003 strongly suggests that this was the first intimation to EnergyAustralia of Mr Lyons' financial difficulties: Our clients have now been informed by their mortgagee that the mortgage secured on the subject property is to be repaid within three months. (my emphasis) · Intention 343 In relation to whether, as a matter of fact, consensus reached on all the terms necessary for the parties to resolve their dispute, it is accepted by both parties that at least one aspect of the discussions at that meeting was not resolved at the conclusion of the meeting. That was Mr Lyons' claim, or request, for compensation (variously described as "rent" or "damages") for the fact that the electricity infrastructure had been on the subject land. There is no dispute that Ms Campion at the meeting indicated that she would need to seek instructions on that issue. 344 There would be a question, therefore, whether (even if I accepted the version put forward by the Lyons entities of what was said in relation to removal of the electricity infrastructure), I could have reached the view that the parties intended there to be a binding agreement before all matters (including the rent claim) had been resolved. 345 From a practical point of view, the parties may well have been prepared to reach an immediately binding agreement on the (more pressing, as it later turned out) aspect of the removal of the electricity infrastructure and to defer any claim for damages or rent to be dealt with at a later stage. While that would be inconsistent with the parties seeking at this meeting to resolve all the matters in dispute between them, it would have been consistent with Mr Lyons' primary concern being as to the removal of the electricity infrastructure. However, there is no evidence that there was any consideration given at the meeting to this aspect of the matter. 346 Ultimately, it seems to me that it is not necessary to determine whether any agreement reached at the meeting was sufficiently complete to represent a binding agreement, because I am not satisfied that there was an agreement reached on 11 June 2003 as to the removal of the infrastructure or that the common intention of the parties, objectively ascertained, was for EnergyAustralia to be immediately bound to remove the infrastructure within about a three to four month period. 347 The evidence seems to me to support no more than a finding that EnergyAustralia's representatives stated that it was looking for the least costly means of resolving the dispute; that its preferred option would be the removal of the electricity infrastructure (and, perhaps, that this is what it would be likely to do), and that if it did so the relocation or removal could be effected within approximately three to four months. 348 Absent words of agreement at the 11 June 2003 meeting, it is difficult to see a basis on which I could form the view that there had been an objective manifestation at that meeting of an intention on the part of EnergyAustralia to be bound to remove the electricity infrastructure within any particular time. · Subsequent communications 349 Subsequent communications may also be considered when considering whether a binding agreement has been reached. In Film Bars Pty Limited v Pacific Film Laboratories Pty Limited (1979) 1 BPR 9251, McLelland J noted that in determining whether the communications between the parties constituted a contract, the court was not confined to a consideration of the terms or manner in which the communications were made, but could interpret them by reference to the subject matter and surrounding circumstances, (including the nature of and relationship between the parties; previous communications between the parties; and standards of reasonable conduct in the known circumstances); and that it was legitimate to refer to and take into account subsequent communications between the parties. 350 The probative value of subsequent communications lies in the light they throw on the proper interpretation of the earlier communications alleged to constitute the contract. McLelland J said that, perhaps more commonly, subsequent communications might be legitimately used against a party as an admission by conduct of the existence or non-existence as the case may be of a subsisting contract, referring to Barrier Wharfs Limited v W Scott Fell & Co Limited (1908) 5 CLR 647. 351 In this case, the evidence shows that, prior to the 11 June meeting, Mr Newland had discussed with Mr Chin the time frame for relocation; options for relocation (ie where and how the relocation would be effected) and the likely costs of the relocation. Mr Newland knew that, in the absence of an agreement on the part of Mr Lyons to grant EnergyAustralia an easement, the least costly option for EnergyAustralia was likely to be the relocation of the electricity infrastructure and he must have had that in mind when he attended the meeting with Mr Lyons. 352 I think the suggestion, proffered by Mr Newland in cross-examination, that at the conclusion of the meeting EnergyAustralia had any reason to expect Mr Lyons to come back with a further offer in relation to the grant of an easement is not consistent with the file note Mr Newland prepared and would have been optimistic in the extreme. It is also not consistent with the conduct of EnergyAustralia. After the meeting EnergyAustralia took no steps, for example, to ascertain whether Mr Lyons was prepared to change his position in relation to the easement or the amount of money he wished to receive if an easement were to be granted. 353 The minutes of meeting which Mr Newland prepared included, at their conclusion, a table setting out certain action items and identifying the person(s) responsible therefor: Action items No. Action Person Responsible 1 EnergyAustralia to prepare minutes of the meeting Keith Newland 2 EnergyAustralia to consider Mr Lyons request for a rental payment for its occupation of the land since he bought it Keith Newland and Penny Campion 354 The action items in the minutes prepared by Mr Newland do not refer to Mr Lyons responding with any further offer as to an easement. For that matter nor do they refer to any action to be taken on EnergyAustralia's part (whether to remove the infrastructure or to make a decision about that) although the preceding part of the minutes notes that EnergyAustralia was to consider "our position and Mr Lyons request for consideration of some form of compensation" (my emphasis, ie I read this as referring to two separate matters). 355 Almost immediately after the meeting Mr Newland contacted Mr Chin by email and said, "It appears we will be proceeding with the preferred option". As noted, in the context of the discussion with Mr Lyons, the "preferred option" seems to have referred to the option of relocating the electricity infrastructure as opposed (for example) to acquiring an easement (the relocation option having been identified as the least costly option for EnergyAustralia). However, Mr Newland in his evidence seems to have accepted that the preferred option to which he was referring in the email to Mr Chin related back to his earlier discussions with Mr Chin as to how and where the poles were to be removed. 356 I read Mr Newland's email, in light of his evidence as to earlier conversation with Mr Chin, as an indication from Mr Newland to Mr Chin that it appeared likely EnergyAustralia would be proceeding to relocate the poles and to do so in the manner in which he and Mr Chin had previously agreed was the preferred manner. 357 Either way, this language is not consistent with Mr Newland understanding that there had been a binding commitment reached at the meeting for EnergyAustralia to do so (nor is the note in the minutes to the effect that EnergyAustralia was to consider its position consistent with such an understanding). It seems more likely that this was he giving Mr Chin an indication that he thought this was the way in which EnergyAustralia would be electing to proceeding, ie a "heads up" as to the fact that Mr Chin was likely to have to arrange for the relocation. 358 A troubling aspect in this regard is that it is not clear to me when any decision was actually made by EnergyAustralia to proceed with the relocation of the electricity infrastructure (or that any formal decision to do so was ever made). 359 There seems to be no clear evidence as to when that decision was made. Mr Newland was asked who made the decision. He did not seem to know. He considered that a decision had been made some time between 11 June and 11 July. He approached Mr Amir Hanna for authorisation in respect of the funding of the works. 360 So far as the evidence goes, Mr Hanna's indication that he would "handle the authorisation" and the issue of the IPO seems to be the only manifestation of any relevant decision as such. 361 In answer to a question by me as to whether he had made the relevant decision, (T/S 17/11/08 T 439.22) Mr Newland said: What I done [sic] is spoke to [Amir Hanna] who was the manager compliance because he would have had the funding to do this work and just going back again and look at the context of the minutes of the meeting and the email to Peter chin and so on, what I was trying to indicate was that it looked like this was what was the most likely outcome in the future, that we'd have to go ahead and relocate. Therefore I'd spoken to [Amir] to see that he was happy to authorise funding to do that sort of work and he'd agreed …" 362 An IPO was issued on 19 June 2003, which ordinarily one would have thought would evidence a decision on EnergyAustralia's part to proceed with the works. Mr Newland seemed to think that the IPO was a provisional IPO (though not described as such) and could have been countermanded at any particular time. He said it was easier to stop work than to start it at a later date. Mr Newland was concerned to put steps in motion in order not to be accused of any delay in implementation of the works. 363 However, the problem with the suggestion that this was a provisional decision is that no one appears later to have turned his or her mind to whether or not then to proceed. It simply seems to have been assumed that there was a decision to do the works. 364 EnergyAustralia appears to have proceeded as if it was a matter for EnergyAustralia unilaterally to elect whether or not to remove the electricity infrastructure. There was very little communication with Mr Lyons or Mr Wawn as to what it proposed to do. 365 Mr Newland's minutes do not suggest that as part of the action items EnergyAustralia had to communicate any decision or make any decision as to whether to remove the poles. That seems to me to be consistent with the attitude EnergyAustralia appears to have adopted that it was within its right to do what it wished to do in relation to the electricity infrastructure. 366 Ms Campion seems to have played no part in the making of any decision. That seems to have been left to the business side of the organisation. Ms Campion's evidence was that Mr Newland told her on or about 9 to 10 July 2003 a decision had been made and asked her to communicate that decision to Mr Wawn. 367 Ms Campion's "without prejudice" letter of 11 July 2003 to Mr Wawn refers to an "intention" to remove the works. Ms Campion suggests that this was the relevant communication to Mr Lyons of EnergyAustralia's decision. If so, it was rather infelicitously worded. However, nothing in the letter is consistent with Ms Campion (and, through her, EnergyAustralia) understanding or admitting that there was any binding agreement at that stage for EnergyAustralia to do so. 368 There was no response by Mr Wawn to that letter to the effect that EnergyAustralia had a commitment to do so. Mr Wawn says that he read this letter as confirmation of what had been agreed. It might perhaps be said that if a binding agreement had been reached at the meeting for the infrastructure to be removed within three to four months, and if it had been left for EnergyAustralia simply to nominate the time for removal then this could have been notification of the actual time frame within which EnergyAustralia proposed to perform an obligation which it already had and no response would be needed. However, that seems to me to be an unlikely construction to put on the 11 July 2008 letter absent a clear commitment at the meeting that the infrastructure would be removed. The uncertainty of the time frame within which the infrastructure was to be removed also counts in my view against there being any binding contractual commitment. 369 The conduct by Mr Wawn following the meeting is not consistent with there being an understanding on his part that there was a binding agreement. The correspondence between Mr Lyons and Herron Todd White (Ex AB p19) refers only to an indication of removal of the poles, not to any agreement to do so (as does the correspondence from Mr Wawn to the mortgagee's solicitors). 370 Mr Wawn did not raise any issue with EnergyAustralia in September 2003 as to a failure by it to honour any earlier agreement. What Mr Wawn said, in his letter of 16 September 2003 to Ms Campion was: It appears that the electricity infrastructure erected on the subject premises has still not been removed at this stage, notwithstanding your advice that the electricity infrastructure would be removed by early September 2003. 371 I think it is very significant that, in his communications with the mortgagee's solicitors in September 2003 (commented upon by Mr Lyons before its despatch) at a time when there was considerable financial pressure on his client, Mr Wawn put the position as no higher than that EnergyAustralia had given a "definite indication" that the line would be removed. 372 I think it is also not insignificant that the claim as originally framed was one strictly for damages for trespass and not for breach of contract (though I note there was, in the initial pleading, a reference to a request for removal of the poles and a reference to an "undertaking" by EnergyAustralia to remove them). 373 Mr Wawn's evidence was that he regarded EnergyAustralia as having given an "undertaking" to remove the poles. He seems to have likened that to a solicitor's undertaking. His evidence was that it was not until he received advice from counsel later down the track that the undertaking "crystallised" in his mind as having contractual force. 374 It is clear that an undertaking may in appropriate circumstances be binding and enforceable. However, the manner in which Mr Wawn refers to an undertaking (consistent with the communications he had with third parties and with EnergyAustralia at the time) suggests to me that what he understood to have received at the meeting on 11 June 2003 was not a contractual or enforceable promise to remove the electricity infrastructure but an indication (or representation) on the part of EnergyAustralia that, subject to whatever internal procedures it might have needed to take, it would be prepared to remove the infrastructure and that to do so would be likely to take about three to four months; and that Mr Wawn gained sufficient comfort from that indication not to press for a further commitment. · Conclusion 375 For the reasons set out above, I do not find a binding agreement to have been concluded at the 11 June 2003 meeting. 376 As to whether the 11 July 2003 letter might, coupled with the discussion on 11 June 2003, be taken as a binding agreement to remove the electricity infrastructure, the difficulty I have is that (even reading Ms Campion's statement as to EnergyAustralia's "intention" to remove the infrastructure as a communication of a decision on EnergyAustralia's part to do so), there is very little from which to draw the conclusion that on or by that July communication alone the parties' common (objectively ascertained) intention was for EnergyAustralia immediately to be bound contractually to remove the infrastructure within that particular timeframe. 377 The vagueness of the language used by Ms Campion (and the use of the "without prejudice" header to the 11 July 2003 letter) suggests that EnergyAustralia did not consider itself at that point bound to do so, but was simply stating that it had (now) formed the intention to remove the infrastructure. 378 Therefore, I have concluded that there was no binding contract constituted in relation to the removal of the electricity infrastructure, whether at the meeting on 11 June 2003 or by reason of a combination of events on 11 June 2003 and 11 July 2003. Representation claim 379 This brings me to the representation (misleading and deceptive conduct) claim. 380 The representations pleaded are along very similar lines: first that EnergyAustralia would remove the infrastructure within four months or otherwise in a reasonable time, and, secondly, that it would do so confirmed as being rescheduled to 15/18 December. 381 The Lyons entities say that in reliance on the representations they did not commence legal proceedings until 2004 to remove the electricity infrastructure (ie these proceedings for trespass) and lost the opportunity to earn ground rent as well as the opportunity to refinance the Stamatakis loan, which led to a mortgagee sale. 382 EnergyAustralia did not initially plead a positive case in relation to the making of the alleged representations (ie a case to the effect that if, which was denied, any of the representations were made there were nevertheless reasonable grounds for so making it or them) but simply denied the allegation that the representations were made and denied any liability. EnergyAustralia sought leave at the hearing to amend its defence to the second further amended statement of claim in order to plead that if any representations were made there were reasonable grounds for so making them. 383 As the particulars to that amended pleading were to be confined to matters of which the Lyons entities had been on notice for over a year (being the matters the subject of an affidavit affirmed 13 December 2007 by Mr Chin), I allowed the amendment to the pleading (over the objection of the Lyons entities) but indicated that I would allow further evidence to be adduced by the Lyons entities if necessary to meet any prejudice occasioned by the late amendment to the pleading. A notice to produce was served during the course of the hearing on behalf of the Lyons entities (and answered in tranches by EnergyAustralia) seeking documents in relation to the existence or non-existence of the alleged reasonable grounds. 384 The reasonable grounds are particularised in the amended defence to the second further amended statement of claim as being, in essence, the fact that in the ordinary course relocation work of this nature would take in the order of nine weeks and that each of a number of particularised events (the cumulative effect of which had delayed the relocation work) was not reasonably foreseeable in June or July 2003. 385 For completeness, I should note that it appears that the Lyons entities did not pursue their claim under s 53A, having provided no evidence or submissions in relation to that claim, nor having dissented from the proposition by EnergyAustralia in its closing submissions that it should be treated as abandoned. · Was there a representation? 386 I do not accept that what was said in the 11 June meeting constituted a representation that EnergyAustralia would remove the power lines within about three or four months or by September 2003. As noted, I regard Mr Newland's minutes as being the most reliable source of evidence as to what happened at that meeting in that regard. 387 While the making of some kind of representation to that effect on 11 June could explain both Mr Wawn's acceptance of the outcome of the 11 June meeting as not requiring any immediate court action to remove the electricity infrastructure and his seeming disinterest in obtaining any minutes of the meeting (as well as Mr Newland's concern to get things moving in relation to the relocation), it is also consistent with Mr Wawn simply allowing some time for EnergyAustralia to consider its position and revert to him. 388 I think that the highest it could be put for the Lyons entities is that there was a representation at the June meeting that, subject to satisfying itself as to various internal matters, EnergyAustralia would be prepared to remove the infrastructure and that if it did so the process would take about three to four months. I do not see the discussion as consistent with a representation or undertaking in June 2003 that the electricity infrastructure would be removed in or by early September 2003 and that it was EnergyAustralia's then intention to do so. 389 However, I am satisfied that by the letter of 11 July 2003 (either itself or combined with discussions at the meeting in June 2003) EnergyAustralia represented to the Lyons entities that it intended to relocate the power lines in early September and, by inference, that the lines would be relocated in early September. While Ms Campion's letter said that this intention was subject to satisfactory environmental assessment, that was clearly obtained and is not in issue. 390 The fact that the 11 July 2003 letter is headed "without prejudice" does not deprive that statement as having the force of an actionable representation. The common law privilege applies only to communications relied upon as an admission (Airtourer Co-operative Limited v Millicer Aircraft Industries Pty Limited [2004] FCA 948 per Beaumont J; Quad Consulting Pty Limited v Bleakley; Rush v Tompkins). What the "without prejudice" header does is no more than to make clear that EnergyAustralia's representation as to removal of the power lines (or its later removal of those lines) is to be without prejudice to its contention that it was not obliged to do so and therefore should not be taken as an admission. That is understandable in circumstances that there was still outstanding at that time a foreshadowed damages (or rent/compensation) claim by the Lyons entities. 391 The substance of the representation must be seen in the context of the discussion which had taken place a month earlier at the 11 June 2003 meeting. On EnergyAustralia's own evidence, its representatives left that meeting on the basis that EnergyAustralia would consider its position. 392 Ms Campion's evidence was that she was informed by Mr Newland on about 9 or 10 July 2003 that a decision had been made to relocate the electricity infrastructure. On her own evidence she intended by her letter of 11 July 2003 to convey that decision to Mr Wawn. 393 While Ms Campion's subjective intention is not determinative of the issue, it seems to me that the letter of 11 July 2003 must have been intended to convey (as EnergyAustralia's closing submissions concede it does) to the Lyons entities that EnergyAustralia had decided to remove the electricity infrastructure. Implicit in that communication must have been the message that it would not be necessary for the Lyons entities to proceed as threatened with litigation to force the removal of the poles. Read in that context it seems to me to be a clear representation that the electricity infrastructure would (subject only to any adverse environmental assessment) be removed or relocated in early September. Similarly, the letter of 1 December 2003 must be read not simply as a statement of fact as to the re-scheduling of the works but that the infrastructure would be removed or relocated within that time period and, to that extent was a further representation by EnergyAustralia. 394 That such a representation of intention may be promissory in nature is illustrated by the discussion in W J Green & Co (1984) Pty Limited as Trustee for the W J Green Family Trust v Wilden Pty Limited as Trustee for the Baga Bazaar (1985) Unit Trust (Parker J, WASC, 24/4/1997, unreported), as to the converse, ie that promissory statements may carry a representation of intention as to the future. His Honour said: Not only can the statement in this case [that an offer of settlement would be left open for a few days] be categorised as one about the future it can also be seen as promissory in the sense of those cases in which it has been held that the promise may carry a representation that the promiser intended to perform the promise or that there is a reasonable basis for making the promise … citing McPhillips v Ampol Petroleum (Vic) Pty Limited (1990) ATPR 41-014 and Wheeler Grace & Pierucci Pty Limited v Wright (1989) ATPR 90-940. 395 The relevant questions therefore, are whether or not either of these representations was made in trade or commerce and, if so, whether or not either was misleading or deceptive or likely to mislead or deceive. Trade or commerce 396 EnergyAustralia in its amended defence did not admit that it carried on business for reward in trade and commerce, inter alia, as the operator of a high voltage electricity transmission network. It is unclear why EnergyAustralia felt the need to put the Lyons entities to proof of something which EnergyAustralia's own annual reports seem to disclose. For example, its year ended 30 June 2003 (Ex AB, Tab 6) refers to EnergyAustralia's "network business" and operations in the energy segment involving the distribution and retailing of electricity. It is said that no evidence was adduced by the Lyons entities to support that allegation. To the contrary, documents were tendered (Ex AB, Tabs 5 and 6) which show that EnergyAustralia regards itself as operating the largest electricity network in Australia, which it refers to as its energy services business. 397 EnergyAustralia's 2001-2002 Annual Report (Ex AB Tab 5) discloses that EnergyAustralia operates as a holding company with four subsidiary businesses. It describes itself as a leading provider of broad-based energy solutions servicing more than 1.4 million customers and providing and managing the electricity infrastructure for, inter alia, the Sydney region. Similar statements are made in the 2002/2003 Annual Report. 398 I am satisfied that EnergyAustralia was, at the relevant times, carrying on business in trade or commerce. 399 What it is necessary for the Lyons entities to show is that the representations were made in trade or commerce. EnergyAustralia submits they were not; that if they were made they were made in an attempt to resolve a potentially litigious dispute and they had nothing to do with the sale or supply of electricity to the subject land. 400 Mr Webster submits, first, that the manner in which EnergyAustralia conducted its case does not permit it to raise such an allegation. In particular it is said that, not having raised this issue in opening submissions or suggested that the issue was seriously in dispute, EnergyAustralia should not be permitted to rely upon the matters set out in paragraphs 142 to 153 of its closing written submissions in reply. 401 It is submitted for the Lyons entities, in effect, that had it been alerted that this issue was seriously in dispute it would have sought to adduce additional evidence further establishing the relevant factors or the context in which the conduct is said to have been in trade and commerce (including addressing in more detail with Mr Newland and Mr Chin the manner in which EnergyAustralia had organised its trading and commercial activities and the nature of its business). Criticism was made of the fact that there was no witness brought forward by EnergyAustralia within its senior executive team. 402 Given the view I have formed (and which I set out below) on this aspect of the submissions made by EnergyAustralia, it seems to me that no real prejudice has been occasioned to the Lyons entities by reason of the fact that they were not earlier alerted to the submissions made by Mr Leeming in closing his client's case. That said, the pleading makes it clear that EnergyAustralia denied that the alleged representations were made in trade and commerce. It was a matter for submission whether, on the evidence, the allegation that the representations were made in trade or commerce was established. Forensic decisions as to the cross-examination of witnesses during the course of the trial do not change that position. Accordingly, I would not have been prepared simply to disregard the submissions made by EnergyAustralia on this issue. 403 The Lyons entities submit that the maintenance of the EnergyAustralia network is a central aspect of its commercial operations and that the commercial meeting in which the representations were made was one in which EnergyAustralia was attempting to protect its network and was engaging in conduct of a commercial character. 404 The test is that set out in Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594 at 602-604 by Mason CJ, Deane, Dawson and Gaudron JJ: ... As a matter of language, a prohibition against engaging in conduct "in trade or commerce" can be construed as encompassing conduct in the course of the myriad of activities which are not, of their nature, of a trading or commercial character but which are undertaken in the course of, or as incidental to, the carrying on of an overall trading or commercial business. … As a matter of mere language, the arguments favouring and militating against … alternative constructions of s 52 are fairly evenly balanced. … What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character. Such conduct includes, of course, promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, be they identified persons or merely an unidentifiable section of the public. In some areas, the dividing line between what is and what is not conduct "in trade or commerce" may be less clear and may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character. 405 Insofar as EnergyAustralia contends that any representations found to have been made were not made in trade or commerce, (as they were made in the context of without prejudice settlement negotiations) it relies upon Pertzel v QLD Pawlownia Forests Limited & Anor [2008] QCA 287, where the Queensland Court of Appeal held that a representation made prior to the commencement of proceedings but while engaged in a compulsory dispute resolution procedure required under the applicable legislation was not made in trade or commerce: One would not recognise these dispute resolution processes as part of trade or commerce for the same reason that one would recoil from the suggestion the courts are engaged in trade or commerce. There the character of the relevant activity was "the conduct of litigation". 406 In my view that situation is not comparable to the present case. Here the representations in question were not made in the context of a court-ordered mediation process. They were made in the context of discussion relevant to the issue whether, and on which terms, EnergyAustralia could leave its network transmission lines (which, even if not supplying electricity to the subject land, must be said to be for the purpose of the business of provision of electricity in which EnergyAustralia is engaged) on the subject land. 407 The business context of those discussions becomes evident when one has regard to the fact (as became apparent in December) that in attempting to reach agreement as to what was to be done with the electricity infrastructure EnergyAustralia must have had in mind the ramifications of any such decision for other current or potential electricity users, such as Caltex. 408 I am not aware of any more general authorities to the effect that settlement negotiations must be treated as falling outside trade or commerce. In Quad Consulting (1990) 27 FCR 86, the relevant statement said to be misleading or deceptive was made in the course of settlement negotiations. However, a "trade or commerce" point does not appear to have been raised and the judgment considered, rather, the scope of the without prejudice privilege. 409 The key factor in the cases where this has been considered in the context of a court-ordered or statutory mediation processes seems to be an aversion to finding that use of court processes could be of a trading or commercial character. In WJ Green, Parker J held that a promissory statement made in the course of a court ordered mediation was not in trade or commerce. His reasoning on this point was a follows: It is necessary that the conduct alleged occurred "in trade or commerce". It is clear that the words "trade or commerce" are to be given a wide meaning: Re Ku-ring-gai Co-operative Building Society (No 12) Limited (1978) 22 ALR 621 at 648-649 per Deane J; Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594. It is the case, however, that the conduct complained of must occur in trade or commerce. It has been decided that the phrase "in trade or commerce" means the conduct itself must be trading or commercial in character; Concrete Constructions (NSW) Pty Limited v Nelson . Conduct that is merely incidental to trade or commerce is not in trade or commerce. Here the evidence suggests that the defendant companies as well as the plaintiff companies, normally engage in trade or commerce in one form or another, however, I am unable to conclude that conduct which occurred in the course of this mediation conference is conduct in trade or commerce. This mediation was conducted pursuant to an Order and was part of the court process. The mediation was a step taken under the auspices of the Court in the resolution of the legal dispute between parties. In those circumstances the parties to the litigation should not properly be seen to be acting in trade or commerce in the course of the mediation for the purposes of the TPA . 410 The Lyons entities refer in contrast to the refusal of Hodgson JA (with whom Sheller JA and Davies AJA concurred) to strike out the pleading in Stockland (Constructors) Pty Limited v Retail Design Group (International Pty Limited [2003] NSWCA 84 which alleged a breach of the Trade Practices Act by reason of matters in connection with but not in the course of bringing proceedings; and to the Court of Appeal of the Supreme Court of Western Australia in Middleton v AON Risk Services Australia Limited [2008] WASCA 239. 411 I do not consider that statements made in a without prejudice meeting (or without prejudice correspondence) entered into between the parties (not as part of any compulsory or court-ordered mediation process) for the purposes of trying to resolve a dispute arising out of or of critical relevance to the business functions of a corporation, are not made in the course of trade of commerce for the purposes of the Trade Practices/Fair Trading legislation. 412 It surely cannot be the case that in discussion with a view to resolving a dispute at the least possible cost to a corporation and with what must have been a view to the continued and efficient conduct of its business, a corporation would be free to engage in misleading and deceptive conduct without recourse by a party suffering loss in reliance thereon. 413 In Quad Consulting, albeit in the context of considering whether evidence of statements in the course of without prejudice negotiations were admissible, Hill J noted that without prejudice privilege is directed against the use of without prejudice communications as evidence of implied or express admission. His Honour referred to the expression of the rule by Oliver LJ in Cutts v Head [1894] Ch 290 at 305 (as cited by Lord Griffith in Rush v Tompkins as making it clear that the rule applies to the use of statements or offers by way of admission and not by way of assertion. 414 Hill J said: It seems to me that if, in the course of "without prejudice" negotiations, a party to those negotiations engages in conduct which is misleading or deceptive or likely to mislead or deceive contrary to s.52 of the Trade Practices Act and as a result the other party to the negotiations relying, for example, upon the misleading or deceptive conduct suffers loss, proof of the negotiations should not be rendered impossible by the "without prejudice" rule. There is, in such a case, no longer the same subject matter in dispute between the parties as was in dispute at the time of the negotiations. A fortiori where the party suffering damage was not at all a party to the negotiation. The public policy to be found in Part V of the Trade Practices Act is not to be rendered nugatory by permitting a party to hide behind the fact that his or her conduct, which is misleading or deceptive conduct, occurred during the course of "without prejudice" negotiations. A party cannot, with impunity, engage in misleading or deceptive conduct resulting in loss to another under the cover of "without prejudice" negotiations. 415 Although the question whether the fact that the negotiations were held on a without prejudice basis may have meant they were not in trade or commerce does not appear to have been argued before his Honour, I think it is relevant to note his Honour's concern that the without prejudice nature of communications should not be relied upon in such a way as to permit breaches of the Trade Practices Act – thereby impliedly accepting that at least some without prejudice negotiations could fall within conduct to which the Trade Practices Act applies. 416 Accordingly, I find that the relevant representations were made by EnergyAustralia in trade or commerce. Misleading and deceptive conduct 417 In Wright v TNT Management Pty Limited (1989) 15 NSWLR 679, McHugh JA said (at 690): At common law a representation outside a contract would only give rise to legal consequences if it was in respect of an existing or past fact; a contractual promise as to the future did not have legal consequences. But for the purposes of Pt V, s 51A must be taken to have abolished the distinction between a promise and a representation with respect to a future event. A promise to do something in the future is to be regarded as a representation that it will be performed. It will be deemed misleading therefore, unless the corporation proves that it had reasonable grounds for making the promise. 418 A representation as to EnergyAustralia's intention to remove the electricity infrastructure might perhaps be said to be no more than a representation of present intention or belief. However, insofar as it is a statement or representation of a present intention to do something in the future made in circumstances intended or designed to convey that such action would be taken, then I consider, by analogy with the reasoning in Wright, that it can be characterised as a representation as to a future matter for the purposes of s 51A of the Trade Practices Act and the corresponding s 41A in the Fair Trading Act. 419 Here, I do not understand there to be any real dispute by EnergyAustralia that any representations of intention which are found to have been made were referable to future matters. 420 In W G Green, his Honour went on to note that the making of a promissory representation will be misleading or deceptive if the promisor has no intention of performing the promise or if there was not a reasonable basis for the making of it. 421 Relevantly, a statement as to the future does not amount to misleading or deceptive conduct simply because the future event does not transpire (Global Sportsman Pty Limited v Mirror Newspapers Pty Limited (1984) 2 FCR 82 at 88; Elders Trustee and Executors Company Limited v E G Reeves Pty Limited (1987) 78 ALR 193 at 242; Bill Acceptance Corporation Limited v GWA Limited (1987) 50 ALR 242 at 250, as cited in W G Green.) 422 The disagreement as to effect of s 51A(2), or its equivalent in the Fair Trading Act, namely whether it throws a persuasive or merely evidentiary onus upon the representor was considered by Allsop J, as his Honour then was, in Pan Pharmaceuticals v Australian Naturalcare (2008) 165 FCR 230 at 274: Does it [s 51A(2)] place the burden of proof upon the representor to prove, on the balance of probabilities, that there were reasonable grounds for making the representation? Does it merely require that the representor adduce some evidence "to the contrary" as a means of nullifying the statutory deeming provision? 423 His Honour, having explored the history of the drafting of the section and the various cases dealing with its operation, concluded that: If evidence is adduced by the representor that is said to be evidence to the contrary, it will be for the Court to determine whether it is to the contrary in the sense just discussed. If it is, the deeming provision will cease to operate. 424 His Honour emphasised that this did not mean that s 51A(2) had changed the legal or persuasive onus: For instance, if evidence "to the contrary" is adduced by the representor, and if the representee itself adduces evidence tending to the lack of reasonable grounds, the matter might be equally poised. In such a case, there has been evidence "to the contrary" adduced by the representee, thereby eliminating the operation of the deeming provision, and, on the totality of the evidence, the proof of the reasonableness (or lack thereof) of the grounds is evenly balanced. Section 51A(2) does not, in my view, mean that in those circumstances the representor has not met an onus. The section does not cast the legal or persuasive onus, in such a case, on the representor. 425 Here, evidence was adduced by EnergyAustralia, to the effect that the timeframe was estimated by Mr Chin, (the engineer responsible for relocation of transmission lines) and that in his experience this was a reasonable timeframe. Mr Chin gave evidence that ordinarily he would expect it to take nine weeks for that infrastructure to be removed. 426 Similarly, Mr Newland, who has been employed in an engineering capacity by EnergyAustralia (and its predecessors) since 1972, considered that (subject to the work comprising a simple relocation) based on his experience the work would take approximately nine weeks. 427 At this point it becomes relevant to focus on the substance of the representations that were made – first that it was EnergyAustralia's intention to (and, impliedly, that it would) remove the infrastructure "in early September 2003" and, later, that the infrastructure would be removed between 15-18 December 2003. The IPO issued prior to the making of that representation specified a delivery or completion date of 30 September 2003. The internal scheduling of the work at that stage was for it to commence on 7 September 2003. 428 Whether the representation(s) was (or were) misleading or deceptive is to be determined at the time of the making of the representation(s) (Bill Acceptance Corporation). In Sykes v Reserve Bank of Australia (1998) 88 FCR 511 Heerey J noted that there is no necessary connection between the reasonable grounds and the subsequent circumstances which resulted in the predicted state of affairs not occurring. His Honour said (at 513) that the particulars of lack of reasonable grounds there relied upon (in the context of a representation as to the issue of polymer bank notes): [o]n their face conspicuously fail to allege matters which would constitute reasonable grounds within the meaning of s 51A. For this purpose it is not to the point what the Bank's intentions were, or what it decided, or what announcements it made. If there was a representation as to a future matter, s 51A requires the representor to show: · some facts or circumstances · existing at the time of the representation · on which the representor in fact relied · which are objectively reasonable and · which support the representation made. 429 Nevertheless, while reasonable grounds are to be determined as at the time of the making of the representation, subsequent events may be taken into account insofar as they reflect upon the reasonableness of the grounds as at the earlier time. 430 The statement by Heerey J that it was not to the point what the representor's intentions were perhaps needs to be qualified. If the representor in fact did not intend to carry the representation into effect, then a statement that that was its intention would surely be misleading as a statement of intention (Dinyarrak Investments Pty Limited v Amoco Australia Limited (1982) 45 ALR 214 at 220). 431 In Lyndel Nominees Pty Limited v Mobil Oil Australia Limited (1997) 37 IPR 599, Wilcox J placed significant weight on the genuine intention of the general manager to implement the policy in question, coupled with the fact that there were reasonable grounds to believe that the policy could in fact be implemented. 432 Heerey J's discussion in Sykes suggests that it is not sufficient that reasonable grounds exist out in the "ether" or even that the representor has those grounds within its knowledge if the representor has not turned its mind to them in making the representation. 433 Other cases, however, suggest that matters not known to the representor, or on which the representor did not specifically rely, might nevertheless form reasonable grounds for the making of the representation. In Cummings v Lewis (1993) 41 FCR 559, Sheppard and Neaves JJ stated (at 565-566): Evidence of reasonable grounds may be established by evidence other than that of the persons who are alleged to have made particular representations as to a future matter. Indeed, as in so many other areas, a court may find the overall probabilities to which the circumstances of a given case give rise, the background to it and the conduct of parties prior to conversations taking place as providing better guides to whether or not they had particular states of mind or whether particular factors existed which would establish evidence of something such as reasonable grounds. It was the overall circumstances of the case which enabled his Honour to say, in relation to both Mr Leckie and Mr Lewis, that each genuinely believed the encouraging assertions which his Honour found them to have made. If one changes the exercise to an inquiry, not into genuine or honest belief, but into whether there were reasonable grounds, it is again the overall circumstances of the case which will provide more reliable guidance than would oral evidence on the part of interested parties. 434 Reliance upon information provided by a trusted source may be reasonable grounds for the making of a representation. In Australian Competition & Consumer Commission v Danoz Direct Pty Limited (ACN 003 546 709) [2003] FCA 881 concerned the marketing of the "Abtronic". Danoz, the Australian distributor of the product, sought to rely upon information provided by its supplier as reasonable grounds for the making of the representation. Dowsett J said: The applicant submits that the first respondent cannot demonstrate reasonable grounds merely by showing that it relied upon information provided by a supplier such as Thane. I do not accept that assertion as necessarily correct. In many cases a retailer will rely upon representations made by a manufacturer or wholesaler as to the quality and capacity of a particular product and will make representations based upon them. It cannot be seriously suggested that a pharmacist who recommends a product to a customer, acting upon information provided by a reputable manufacturer, lacks reasonable grounds. Similarly, it cannot be asserted that s 51A requires a retailer of electrical goods to carry out testing on a television set supplied by a reputable manufacturer in order to ensure that it has the qualities asserted in relevant promotional material, before he or she represents that it has such qualities. In my view, such representations may well be made on reasonable grounds if they are based upon information provided by a supplier. In each case, the question will depend upon the reputation of the supplier and past dealings between it and the retailer. If goods of a particular kind have been consistently provided over a lengthy period of time, have always been of good quality and lived up to representations made by the supplier, then it may well be reasonable for the retailer to act upon representations concerning a new product. Each case will depend upon its own facts. 435 The representor here is EnergyAustralia. On the reasoning in Cummings and Danoz, it is not necessary to show that either Mr Newland or Ms Campion knew of, or placed reliance upon, the exact matters on which Mr Chin based his estimate as to the time by which the relocation would be completed. Those matters were within the knowledge of Mr Chin. It does not seem necessary that the individual through whom the corporation made the representations in question should personally have knowledge of the reasonable grounds. Rather, the authorities seem to require that those grounds be within the knowledge of the corporation and be the cause of the representation being made. In Moorna Constructions (NSW) Pty Limited v Denmatu Pty Limited (1998) ATPR 41-616, Beazley JA, with whom Mason P and Powell JA agreed, endorsed the statement in Cummings v Lewis: The appellants submitted, however, that there were in fact reasonable grounds for the representation, based on the takings of the previous lessee, whose records Pyers had made available to the respondents during the negotiations for the sale of the lease. … Such evidence may of course be relevant to establishing reasonable grounds. In Cummings v Lewis (1993) 113 ALR 285, at 292, Sheppard and Neaves JJ observed... though Beazley JA did not seem to consider that s 51A would be satisfied by evidence of reasonable grounds on which the representor did not rely. 436 Despite the evidence from Mr Newland, reliance for the existence of reasonable grounds, as I understand it, was placed solely on the evidence of Mr Chin, an engineer employed by EnergyAustralia since 1985, who joined the transmission section in 1993. Mr Chin's evidence, which I have no reason to doubt, was that he was the only engineer within EnergyAustralia with responsibility for removal of transmission lines of this kind at this time. His evidence was that over a period of eight years up to 2001 he had been responsible for the relocation of three or four transmission poles a year and over that period (out of the three to four relocations a year) he had relocated about ten high voltage lines such as the one the subject of this relocation. 437 Mr Chin gave evidence as to the estimated the time for relocation. It would seem this was solely based on his experience over the previous years, although it is to be noted that he had previously (in 2001) prepared a project plan in relation to relocation of these lines and presumably had that in his mind to some extent. Mr Chin said the 2001 consultation was by way of a preliminary estimate only. It was pointed out to him, and accepted by Mr Chin in cross-examination, that Mr Chin did not make inquiries as to the existence of sufficient stocks of insulators (one of the subsequent causes of delay); and did not make reference to the condition of the land (although he had previously made visual inspection of the lines and said he thought that the area looked normal and had no reason to believe that there would be any difficulty). It was submitted that the delays were caused by "poor planning". Mr Chin said he did build in the standard contingency factor in relation to the works and that in his experience his estimates were "fairly accurate" usually within 10% plus or minus. 438 There was in evidence a copy of a rough sketch plan dated 28 August 2001 prepared by Mr Chin at the time he was consulted in 2001 in relation to the relocation of the lines (Exhibit Z) as well as a draft costing for the works also prepared at that time. There was no similar document produced in relation to the estimates given by Mr Chin in June 2003. It may be that he based his 2003 estimates initially on the preliminary views he had formed in 2001. Certainly the costing was remarkably similar. 439 In 2001 Mr Chin estimated that the work to relocate the line was roughly about seven to ten days, though this would not necessarily be continuous. His draft plan appears to have contemplated 17 person days, but some of the work was overlapping. Exhibit U was part of a project plan prepared around January 2004. 440 Mr Chin agreed that an essential component of investigations into the relocation of poles, including stay poles, was the subsurface conditions into which those pole would be placed but said he did no geotechnical survey. He thought it unnecessary to seek any information as to the subsurface conditions because, prior to this relocation, he had never encountered any such problem. His evidence was that where the ground conditions looked abnormal such an investigation would be carried out but in this case the ground conditions did not look abnormal. 441 Whether or not, Mr Chin might be criticised for not having carried out geotechnical surveys in relation to the subject land (or should have had the foresight to anticipate a problem here of a kind he had not previously encountered) this seems to me to place too high a test on what would be "reasonable grounds". 442 In determining whether EnergyAustralia had reasonable grounds to make the representations it made in this case, the question seems to me to be whether EnergyAustralia could reasonably rely on an estimate provided by an internal engineer who, over the past ten years, had been the only engineer responsible for relocation of transmission lines of this kind and who, on his own evidence had provided fairly accurate (plus or minus 10%) in the past in making such estimates. I think, applying the test in Danoz, it could not be said that EnergyAustralia would have been acting unreasonably in relying on such an estimate. 443 There might be an issue if Mr Chin had simply plucked a figure out of the air. However, here, Mr Chin appears to have based his estimate on a number of years' prior experience and with the benefit of having carried out preliminary planning work in 2001. I am satisfied that this would have provided reasonable grounds for a representation by EnergyAustralia that the works would be carried out within about four months. Insofar as Mr Newland obtained the estimate from Mr Chin, had preliminary knowledge of the site, and relied upon Mr Chin's estimate when discussing the matter with Mr Lyons and Mr Wawn; and Ms Campion then relied on what Mr Chin told her and/or Mr Newland as to the scheduling of the works, I consider this would meet any need for reliance by the representor on those reasonable grounds. 444 However, Mr Chin's estimate of seven to ten days for completion of the works must be put in the context of when the works had been scheduled to commence and the timeframe which EnergyAustralia had internally set for completion of the works. 445 As at 7 July 2003, Mr Chin had notified that the works were scheduled to commence in early September. A seven to ten day completion period comes very close to a completion date towards the middle of September (unless works started on 1 September and were complete within the first week or so of September. 446 Tellingly, however, EnergyAustralia's IPO as issued specified 30 September 2003 as the delivery or completion date. I can only assume, by reference to the IPO, that as an internal matter EnergyAustralia would have regarded the project as being completed on time if it had been completed on 30 September 2003. On any view of things this is not "early September". Mr Newland, at least was aware of the IPO completion date. 447 While I think it would have been reasonable for EnergyAustralia to accept and rely upon Mr Chin's estimate for time for completion of the works, the documentation authorising the works in fact showed that EnergyAustralia was allowing until 30 September for the works to be completed. Therefore, I do not think it can be said that there in fact were reasonable grounds for EnergyAustralia to represent to the Lyons entities that the relocation would be completed in early September nor do I think this evidence supports a finding that it was EnergyAustralia's then intention that the works be completed by early September. 448 The subsequent representation (that the works had been rescheduled for 15-18 December 2003) seems to me to be different. There is nothing to suggest that when that representation was made (on 1 December) there were not reasonable grounds for it to be made (EnergyAustralia again relying on Mr Chin's estimate of the time for completion and by then very clearly pressing to have the works completed as quickly as possible in circumstances where it anticipated claims being made by Mr Lyons in relation to delay). 449 What seems to have happened, apart from the initial difficulties in relation to the stock of insulators, was that EnergyAustralia gave priority to the needs of another customer (Caltex) but for which the works would have been commenced in November. Of course, whether the works had started then or as rescheduled in December, there would have been further delay caused by the need for geotechnical reports due to the status of the ground fill. 450 Therefore, any initial representation made in the 11 June meeting, and the later representation as to the 15 to 18 December rescheduling seem to me to have been based on reasonable grounds and so did not amount to misleading or deceptive conduct. 451 Where I am not satisfied is as to the existence of reasonable grounds or (notwithstanding the fact that it would otherwise have been reasonable for such an estimate to be given) that EnergyAustralia had the intention to complete the works by early September 2003), in order to warrant the representation made by letter dated 11 July 2003. 452 I therefore find that there was misleading and deceptive conduct in breach of s 52 of the Trade Practices Act (and its counterpart under the Fair Trading Act) in relation to the representation by Ms Campion made by letter of 11 July 2003 as to the relocation of the electricity infrastructure in early September 2003. General 453 Before proceeding to the issue of damages I should make some comment on an issue which arose during the hearing as to the (in)adequacy of discovery by the Lyons entities and the making of claims for privilege (said to have been on Counsel's advice) which were subsequently abandoned in circumstances where they appeared likely to be unable to have been substantiated. 454 Where particular evidence (or types of evidence) can be identified as having been deliberately or recklessly lost, or destroyed, or not disclosed, this gives rise to a presumption at least that the contents of that evidence would have been entirely against the defaulting party in accordance with the maxim omnia praesumuntur contra spoliatorem (which has been translated as "all things are presumed against the wrongdoer" per Mozley and Whitley's Law Dictionary as cited in NWR FM t/a North West Radio v. Broadcasting Commission of Ireland & Anor [2004] IEHC 109). (It is difficult to find a use of spoliator as "wrongdoer" in any except the most recent authorities, many of which cite Mozley. A more precise translation of the Latin word might be "robber, pillager, plunderer or spoiler" which accords with the maxim's usage in the older authorities.) 455 The High Court in Allen v Tobias (1958) 98 CLR 367 at 375, adopted the statement of this maxim given in The Ophelia [1916] 2 AC 206: If any one by a deliberate act destroys a document which, according to what its contents may have been, would have told strongly either for him or against him, the strongest possible presumption arises that if it had been produced it would have told against him; and even if the document is destroyed by his own act, but under circumstances in which the intention to destroy evidence may fairly be considered rebutted, still he has to suffer. He is in the position that he is without the corroboration which might have been expected in his case. 456 There is some divergent judicial opinion on the nature of the inference to be drawn, whether it is limited to matters which could likely have been established by the evidence which has been destroyed or withheld or whether presumptions will be raised against the spoliator on all issues which are not otherwise positively proved. Of course, even if the more limited application of the maxim is accepted, adverse inferences as to credit may be drawn from deliberate spoliation of evidence. 457 There is also some historic divergence as to the amount (if any) of "wrongdoing" or fault required to enliven the maxim; ie whether the blameworthiness requires malus animus or mala fides, (Delany v Tenison (1758) 3 Bro PC 659; 1 ER 1559) or whether it is sufficient for the presumption to be available that it cannot be shown that the destruction of evidence was proper or justifiable (Gray v Haig (1854-1855) 20 Beav 219; 52 ER 587). 458 The passage of The Ophelia approved by the High Court would seem to suggest that even bona fide destruction can nevertheless have negative consequences, by stating that even where "the intention to destroy evidence may fairly be considered rebutted, still [the destroyer of evidence] has to suffer. He is in the position that he is without the corroboration which might have been expected in his case." 459 Here, the fact that Mr Lyons was apparently readily able, when he put his mind to the task, (and, it would seem, in anticipation of questions he might be asked of him in the witness box) to locate a number of documents which should have been discovered, strongly supports the view that there was not proper compliance with their discovery obligations by the Lyons entities. However, I am not satisfied that there was intentional non-disclosure by Mr Lyons or the Lyons entities. 460 I have no reason to doubt Mr Lyons' explanation (given loquaciously as seems to be his usual style) for the late discovery of those documents. In the circumstances I do not consider any adverse inference to his credit is warranted by the unfortunate non-compliance with the discovery obligations on the part of the Lyons entities. Nor do I consider that any adverse inference should be drawn from the perhaps overly enthusiastic claims for privilege in relation to the production of documents (particularly where it was suggested by counsel that there was an issue as to whether certain of the documents produced fell properly within the subpoena at all). Damages General comments 461 It follows from the findings above that the only claim which the Lyons entities have succeeded in establishing is the misleading and deceptive conduct claim in relation to the representation I have found to have been made by the letter of 11 July 2003. 462 The accounting experts (Dr Ferrier, for EnergyAustralia, who was not required for cross-examination, and Mr Calleia for the Lyons entities) agreed that the economic loss calculation of $1,193,640 depended on two assumptions. First, that EnergyAustralia had an obligation (which I have found it did not) to remove the electricity infrastructure in September 2003 and, secondly, that Mr Edmonds' evidence as to fair market value is accepted. 463 What was not agreed by them was the position if the evidence of Mr Lunney (an expert real estate valuer) was accepted as to the sequence of property development events which would have occurred had the infrastructure been removed from the property. Dr Ferrier says the Lyons entities in that event have suffered no loss because the financial consequences of the likely chronology of events had the infrastructure been removed are not materially different from those which have occurred. Mr Calleia (who is not a property expert and who initially disclaimed expertise in the preparation of damages claims but apparently changed his mind after a discussion with the plaintiffs' legal representatives) nevertheless opined that the value attributed to the property had been significantly affected by the alleged trespass and failure of EnergyAustralia to remove it in a timely manner. 464 Mr Calleia stated that he was of the opinion that if EnergyAustralia had an obligation to remove this infrastructure at any time after April 1998 to 24 May 2004, "due consideration must be given by the court to the significant reduction to the plaintiffs in the realisation of sale proceeds of the property" (Ex R para 3.2). 465 I am not satisfied that Mr Calleia has the expertise to comment as to the likely sequence of events in relation to any development application (whether that put forward by Mr Edmonds or otherwise) and I have disregarded those comments. 466 The Lyons entities concede that the claim for loss of ground rent fails if the trespass claim is not made out. The respective accounting experts are agreed that if Energy Australia was not obliged to remove the infrastructure until September 2003 there was no loss in rental income. 467 Similarly, any claim for damages for trespass or breach of contract by reference to any difference between the price of the land obtained at auction in April 2004 and its market value at the time of sale would also fail. 468 That said, I note that paragraph 19(f) of the second further amended statement of claim pleads that, but for the alleged representations and after various other steps (including obtaining a development consent), the Lyons entities would have proceeded to sell the land for market value. There was considerable debate during the hearing as to the market value of the subject land as at April/May 2004. 469 Accordingly, I set out below my view as to the evidence as to the market value of the subject land as at April 2004 before turning to the actual damages, if any, recoverable for misleading and deceptive conduct in this case. 470 The parties' respective experts were agreed that the site had the most value to the owner of Lot 1. The owner of Lot 1 ultimately bought it at a price roughly equivalent to that which it had been prepared to pay for Lot 1 (and at a price which Mr Lyons conceded gave him a substantial capital profit, though less than he thought the land was worth). 471 Ironically, the Lyons entities (who secured what Mr Lyons readily concedes was a very "cheap price" from the Department for the land by emphasising its lack of development potential or worth to anyone other than the owner of Lot 1) now contend that the sale price actually paid by the owner of Lot 1 ($600,000) did not reflect the true value of the subject land (that owner having previously rejected the offer by Mr Lyons to sell it to them at $800,000). 472 I was referred to the Court of Appeal decision in Port Stephens Shire Council v Tellamist Pty Limited (2004) NSWCA 353, where the correct method of assessing damages for the trespass, in a case where the land was not developed to its highest and best use, was considered and the diminution of value was assessed using an "hypothetical development model". In that case, all members of the Court of Appeal considered that Spencer v The Commonwealth (1907) 5 CLR 418 as to the valuation of the land remained authoritative - namely that the question was the point at which a desirous purchaser and a not unwilling vendor would come together. Where the members of the Court of Appeal differed was as to whether, in assuming the hypothetical parties to be aware of all relevant information about which a prudent purchaser would inquire, it was to be assumed (as the majority did) that a true answer would have been given to any inquiry. The point at which this was to be assessed was the time of the trespass. "The market for the property is assumed to be an efficient market in which buyers and sellers have access to all currently available information that affects this property" (McHugh J in Kenny & Good Pty Limited v MGICA (1992) Limited (1999) 199 CLR 413 at 436). 473 Each side called expert valuation evidence. Mr Lunney (for EnergyAustralia) and Mr Edmonds (for the Lyons entities) valued the property as at April 2004, assuming no DA approval, at $540,000 and $1,5701,000 respectively (and with a DA approval at $540,000 and $1,900,000). 474 Mr Rennie, also for the Lyons entities, valued the property at $1.35 million without a development consent (and at $1.6 million with a development consent) but Mr Rennie agreed that if EnergyAustralia's town planning reports (from Mr Nash) were accepted then Mr Lunney's valuation should be accepted. 475 It was accepted by Mr Edmonds and Mr Lunney that there was no directly comparable sale. Mr Edmonds' report referred to a sale at 39 Mangrove Lane, Taren Point at $265 per square metre, yet he reached a value of $540 per square metre for the subject land ($1,578 million). 476 For the reasons put forward by Mr Lunney, I consider that the sales relied upon by Mr Edmonds and Mr Rennie in their respective valuations (and, in the case of Mr Edmonds, the additional sales he referred to in the witness box) are not appropriate comparables. They include industrial property free from the various development constraints identified over the subject land and also, in the case of the additional sales identified by Mr Edmonds in his oral evidence, sales either not at arms' length or including a GST component. 477 Of the valuation witnesses, I found Mr Rennie the least impressive. Inconsistencies in his valuation methodology between 1998 and 2007 suggest that, at the very least, the 1998 valuation was a relatively superficial exercise (without mention of any of the significant development constraints affecting the property and without reference to the $150,000 sale two months earlier). There was also, significantly, no mention of electricity infrastructure as an impediment. 478 I note that the Department had proceeded with the 1998 sale on the basis of its own valuation in a range not exceeding $95,000 for Lots 1234/5; based on the assumption that the land was in effect unusable and of value only to the adjoining owner. At that time the Department had apparently also taken into account the potential for a rezoning to allow commercial use of the land, when recommending that negotiation commence for a sale price of $180,000. If the subject land was in fact worth around $500,000 at the time of its sales in 1998, then the Department sold it at a considerable undervalue, something I would infer it cannot have intended to do. 479 Mr Rennie's indicative range per square metre based on his analysis of the comparables was $306 to $450. He considered the mid to higher range applicable due to the unique nature of the land, the considerable range of consent uses, and more particularly if a DA was in place and the electrical easement not there. Mr Rennie's valuation in 1998 also justified a higher rate by reference to the special value of the property to the adjoining owner. 480 I do not accept Mr Rennie's treatment of the potentially comparable sales as being a useful indication of the market value of the subject land in April 2004. I also note that the 1994 valuation by Mr Rennie of Lot 1 (which seems on any view to have had less developmental constraints than the subject land) had produced a square metre value at $250-275. 481 I found Mr Edmonds' evidence to be of more assistance than that of Mr Rennie. However, I am not satisfied that he gave sufficient consideration to the weight to be attached to the acknowledged development constraints affecting the property. 482 Therefore had it been necessary to determine the market value of the subject land without a development approval I would have rejected the conclusions reached by Mr Edmonds and Mr Rennie (as not being based on direct comparables and not giving adequate weight to the identification of the land as having potential development constraints). 483 But for the fact that it was a mortgagee sale, I would have considered it likely that the sale of Lot 1, (as Mr Lunney contends), was the best evidence of market value as at April 2004. However, the fact that it was a mortgagee sale leads me to treat Mr Lunney's valuation with some caution. 484 A mortgagee sale, almost by definition, is not that of a willing but not anxious seller and purchaser. Ordinarily it is a sale forced upon an unwilling seller by its mortgagee. It is said by Mr Lunney that Mr Galanos was an anxious purchaser because the property was worth much more to him (and that this justified acceptance of a value based on that sale without adjustment for it being a mortgagee sale). However, it seems to me that Mr Galanos could only reasonably have been described as an "anxious purchaser" if there were other willing but not anxious purchasers against whom he was competing. That might have been the case if Mr Galanos had perceived that Mr Lyons (notwithstanding that the sale process had commenced or been forced upon him as a mortgagee sale) was in a position to compete for the acquisition of the property. However, there was little evidence as to the actual process of the sale. In Mr Edmonds' report of 7 April 2008 (para 26) he reported that Mr Lyons had made a bid at public auction at a price sufficient to discharge his debt on the property and the selling costs. Mr Galanos presumably subsequently acquired the property with a higher bid but there is nothing to suggest he did so in circumstances where there was a truly competitive bidder for the subject land. 485 Mr Webster also criticised Mr Lunney's valuation and feasibility analysis (insofar as it was on a hypothetical development basis) as having taken into account (contrary to Tellamist) matters of which a purchaser in 2004 would not have been aware (such as the subsequent gymnasium/fitness centre development) and on the basis of the imponderables involved in such an exercise (as indicated in The Law Affecting Valuation of Land – Hyam – 3rd Ed page 135). 486 I should note that the Lyons entities (though criticising Mr Lunney's report for having regard to matters not known at the time at which his valuation was to speak) themselves point to the development actually carried out on the subject land after its sale to Galanos with a foreshore building line (FBL) of 7.5 metres and access to Captain Cook Drive as belying the assessment put by Mr Nash of the development constraints affect the land. Hence it seems to me there is a bit of "pot calling the kettle black" in this submission. 487 In any event, a review of Mr Lunney's valuation report discloses, in my view, that where reference is made to information which was available only after the relevant date (such as Mr Lyons' correspondence in 2005 in relation to traffic and volume or the draft consent to the gymnasium development in 2006), this was by way of a confirmatory check of his earlier observations or conclusions (much as Mr Lyons had referred, throughout the hearing to the gymnasium development vindication of his earlier held views as to the subject land) and therefore does not vitiate his analysis. 488 That said I do not regard the feasibility analysis as particularly useful and I do not rely on it. In part, this is because both valuers agree that the site (even at 2004) would have had only limited appeal and that such appeal would be to a more risk averse speculator or developer – one who would, presumably, not only take a risk on what kind of development might be able to be carried out but presumably also would approach a viability or feasibility analysis in a similar way. 489 How then to value the subject land? Both Mr Edmonds and Mr Lunney accepted that the subject land (whether or not the infrastructure was there) was subject to various development constraints. Mr Nash, the town planning expert called by EnergyAustralia, identified a number of those, the most significant of which appear to have been: (i) the effect of any FBL restriction; (ii) the relevant zoning restrictions on use of the land; and (iii) other constraints such as access, possible contamination, and environmental matters. 490 Mr Lunney and Mr Edmonds were agreed (Ex C) that the extent of the development constraints applicable to the property as at both April 1988 and April 2004 were such that the property would appeal only to a narrow market of developers or speculators prepared to take on the significant risk of overcoming the numerous development constraints of this property, and then only if the property could be acquired at a sufficiently discounted price to offset the risks and constraints of the site. As at 2004 the only change to those constraints would seem to be as to the effect of the FBL restriction and the likelihood of imminent removal of the EnergyAustralia infrastructure. They differed as to the appropriate discount and how it should be assessed. 491 Insofar as the market value of the land in 2004 was concerned it was clearly not a site for risk averse purchasers. 492 I consider the most significant of the identified development constraints in turn. FBL 493 There was much debate as to the applicability or not at the relevant time of a 30 metre FBL. EnergyAustralia points to the fact that, by the time of the Galanos development the applicable FBL had changed to 7.5 metres, so that the Galanos development itself says nothing as to the applicable FBL at an earlier time. 494 For the reasons I set out later I do not think the existence and extent of the various constraints on development (or the economic viability of any proposed development) is determinative of the damages claim consequent upon the misrepresentation I have found. 495 However, as the FBL was a live issue between the parties I feel I should say that had the matter called for such a determination I would have found on balance that as at 1998 there was a 30 metre FBL restriction which most likely would have been calculated from the mean high water mark as disclosed in DP 109853 and that that 30 metre FBL in all probability continued to apply in 2003 and up until 20 January 2004. 496 In this regard, while I found both of the town planning experts of great assistance, ultimately I accept Mr Nash's explanation of the import of the various planning controls as the most likely to be correct. 497 The impact of any FBL restriction needs to be considered at particular times – first in 1998, when the subject land was acquired, any restriction was to found by reference to the 1993 LEP and later in July/September 2003, the relevant restriction was to be found in the 2000 LEP. After 20 January 2004 (subject to any potential qualification emerging from evidence during the course of Mr Nash's cross-examination, as to which I comment below) the town planning experts were agreed that the FBL was 7.5 metres from the landward western boundary of the subject land. · 1993 498 The town planning experts (Mr Nash for EnergyAustralia and Mr Brindle for the Lyons entities) agreed (see Ex H) that Lot 1234 was subject to certain zoning and other constraints: as at 1993 – Sutherland Shire Council Environmental Plan 1992, gazetted 12 March 1993 (1993 LEP). 499 Relevantly, it was subject to clause 14A relating to foreshore building lines. Clause 14A(2) defined "foreshore building lines" as: The line shown on the maps by a broken black line on an allotment of land, which is parallel to (and at the distance specified on the maps from) the mean high water mark of tidal water as shown on the Deposited Plan for the allotments at 24 April 1980 ... If that definition results in a [FBL] which is at a distance of less than 7.5 metres from the landward boundary of a waterfront reserve or the present mean high water mark of tidal water or no such line is shown on the maps, the [FBL] is taken to be a line parallel to and 7.5 metres from the landward boundary of the reserve or (if there is no such reserve) the present mean high water mark. 500 The focus of the dispute on this issue was whether, for the purposes of the then LEP definition as at 1993 any "mean high water mark as shown on the Deposited Plan for the allotment at 24 April 1980" could be found. If there was no such plan, or it could not be found, then Mr Brindle says no 30 metre FBL applied. Although the deposited plan creating the subject land referred to a 30 metre FBL it could not be measured because the starting point was unknown. Mr Nash, on the other hand, who gave evidence in a careful and considered manner made enquiries of council officers and researched various titles/plans, before coming to the conclusion that although he was not aware of a 24 April 1980 plan, logically there must have been such a mean high water mark for it to be identified on various plans as the "former mean high water mark" and therefore the setback was 30 metres from the line shown in the s 149 certificate for the subject land. 501 During the course of the hearing, further research by EnergyAustralia's lawyers uncovered the deposited plan in 1954, the effect of which, according to Mr Nash, was to amend the boundaries of the area of land encompassing the subject land (in the context of the creation of part of the Bate Bay Road). This plan (DP 109853) disclosed a mean high water mark and was capable of satisfying the definition in the 1993 LEP (subject only to whether it related to the "allotments" for the purpose of the definition). Mr Nash was satisfied that this plan confirmed what he had deduced from his earlier research. 502 It seems to me that this evidence (Ex 22 Tab 8) determines the issue of the FBL as at 1993. In saying this, I have had regard to the specificity of the definition in the 1993 LEP which defined the FBL by reference to a plan as at a particular date. I think the court should strive to find a meaningful operation for such a definition rather, in effect, saying that there is no FBL because it is impossible to find the line from which it was clearly meant to be calculated. 503 The 1954 plan, encompassing as it did the area subsequently forming part of the subject allotments (Lots 1234/5), is consistent with the basis on which it appears the plans for the land have been prepared and registered over the years. Therefore, if it were to be of relevance to the facts in issue I would find that there was a 30 metre FBL affecting the subject land in 1993, calculated from the mean high water mark line shown on the plan which is Ex 22 Tab 8. · 2003 504 By 2003, however, a new LEP was in force – LEP 2000. LEP 2000 came into effect on 13 December 2000. The definition of the FBL in clause 20 was somewhat different. It was expressed in the alternative. 20. Foreshore building lines and waterfront development. (2) … [FBL] for an allotment means: (a) if the maps indicated by a black line that a [FBL] applies to the allotment – the line across the allotment parallel to, and at the grater of the following distances from, the mean high water mark at 24 April 1980, (i) the distance specified on the maps, or (ii) 7.5 metres from the mean high water mark for the time being, or (b) if the maps do not indicate by a black line that a [FBL] applies to the allotment, and the allotment adjoins or is adjacent to the mean high water marked for the time being – the line across the allotment parallel to, and 7.5 metres from, the mean high water mark for the time being, or (c) regardless of paragraphs (a) and (b), if the allotment adjoins a waterfront reserve – the line across the allotment parallel to, and 7.5 metres from, the landward boundary of the waterfront reserve. For the purpose of this definition, the mean high water mark at 24 April 1980 on any land is taken to be as shown on the last Deposited Plan or other plan which defined the mean high water mark and was registered by the Registrar General on or before 24 April 1980 … Establishing the [FBL] for an allotment to which paragraphs (a) and (b) applies will require reference to the mean high water mark at 24 April 1980 on adjoining or adjacent land in some cases. 505 This definition does not carry with it the requirement that the plan as at 1980 be a plan "for the allotments", removing that potential difficulty from the 1993 plan. 506 Mr Brindle contends that as at 2003 clause 20(2)(c) applies on the basis that Lot 1234 adjoins a waterfront reserve. Mr Nash contends that the adjoining land is not a waterfront reserve as that expression should be understood. 507 There is no definition of "waterfront reserve" in the LEP 2000. Nor, I am told by Mr Nash, is there any common usage by town planning experts as to that term. I was taken to no case (nor have I been able to find one) which considers and applies that term. Mr Nash says that a waterfront reserve must be one which is owned by the Council or is under the care control or management of the Council pursuant to some dedication. I was taken to the zoning definitions at the relevant times: Zoning 6(a) Public Recreation (which applied to a small portion of the subject land) applies to open space used for both active and passive recreation. Land in this zone is either owned by council, or under the care, control and management of council but is yet to be acquired by council or dedicated to council for open space. Zone 6(b) Private Recreation (which applied to the bulk of the subject land) and permitted (only with development consent) restaurants. 508 Under clause 49 of the 1993 LEP a foreshore scenic protection area applied to "open space zones" next to, inter alia, Bate Bay – but this did not refer to a waterfront reserve. 509 Mr Nash says the 1993 LEP zoning map (figure 3.1 to his original report) demonstrated the alignment of the foreshore of Woolooware Bay adjacent to the subject site and that corresponds with the former mean high water mark on the "Plan and Site Details" of 14 July 2004 redefining the position of that mean high water mark in 1980. 510 As to the 2000 FBL, while I am inclined to defer to Mr Nash's obvious expertise and knowledge in the area, I was troubled by the fact that there is no clear definition of waterfront reserve. If this adjoining area were to be a waterfront reserve, then at least as from 2000 the 30 metre FBL would clearly not apply. Certainly the land is "waterfront". I was taken on a view of the subject land during the course of the hearing, from which it appears that the area said to be the waterfront reserve was the area largely, if not wholly, occupied by mangroves on the edge of the water. Was it a reserve? 511 In Carson v Department of Environment and Planning (1985) 3 NSWLR 99 Samuels JA said: In my opinion, the proper meaning of the word "reserve" in s 27(1) is the third offered in the Oxford English Dictionary, that is, "to set apart". In other words, s 27(1) is speaking of land which is set apart for exclusive or sole use for a particular purpose, that is to say, land which, by a relevant planning instrument, has been imprinted with a particular purpose and, more than that, the purpose must be an exclusive one, allowing of no other. 512 The term public reserve is, consistent with this, defined in the Encyclopaedic Australian Legal Dictionary as: Land set aside by the Crown or a municipality for community use, ordinarily for recreational purposes or for common enjoyment. The character of a public reserve may be such as to justify restricting rights of access and use, or charging a fee for entry: Randwick Municipal Council v Rutledge (1959) 102 CLR 54; 5 LGRA 127. A public reserve includes land set aside for use by the public, generally by notation on the plan of subdivision of which the reserve forms part, a public park, land dedicated privately or by the Crown as a public reserve, and land under the control of a local council as a public reserve: for example (NSW) Local Government Act 1993s 3, Dictionary. 513 I note that a definition of waterfront reserve was introduced in the 2006 Sutherland Shire Council LEP as being: " waterfront reserve " means an area of land that adjoins a waterway and is in Zone 13-Public Open Space or Zone 14-Public Open Space (Bushland). 514 What inclines me to accept Mr Nash's reasoning is that on 20 January 2004 a deposited plan or plan or identification was registered [DP 1063961] with the Land Titles Office for portion of land, identified as Zone 6(a) Public Recreation under LEP 2000. Both town planners accept that as at this date a waterfront reserve had been created. 515 Mr Nash says that registration of DP 1063961 (creating Lot 7074) on 20 January 2004 created a waterfront reserve which was dedicated to the Council as a public reserve. Mr Brindle's report 3.2.2 also refers to the creation of a waterfront reserve. It seems reasonable to assume that some form of dedication would be required to set aside the land for specific use or to create a "reserve" as such. If so, then registration of DP 1063961 (which both experts accept meant that the FBL was 7.5 metres in accordance with clause 20(2)(c) 2000 LEP) goes further than the position up to 2004 where there was no such dedication. 516 The qualification to which I referred earlier was that in cross-examination Mr Nash appeared to suggest that if registration of the deposited plan did not amount to a dedication then there would have been no change in 2004. However, as both parties seem to have accepted that by 20 January 2004 at the latest there was a change to the FBL restriction, I do not consider I should proceed on the basis other than that the position as at 20 January 2004 (if not before) had changed to a 7.5 metre FBL. 517 The time at which the market value of the subject land falls to be assessed is therefore critical when considering the impact on the value of the land of any FBL restriction. 518 As at 20 January 2004 the town planning experts seem to be agreed that this constraint was much less restrictive (7.5 metres) than it had, or may have, been as between July 2003 and January 2004 (30 metres). 519 Of course, at either time, it would have been possible that a variation under the Environmental Planning and Assessment Act could have been sought (a SEPP 1 variation). Mr Lyons was confident of his ability, if necessary, to obtain a SEPP 1 variation. EnergyAustralia's submissions, by contrast, point to the difficulty inherent in such an application (referring to Cripps J in Hooker Corp Pty Limited v Hornsby Shire Council (NSWLEC 2 June 1986); and the matters required to be established for such a valuation (Winter Property Group v North Sydney Council [2001] NSWLEC 46; Kenstrom Design Pty Limited v Mosman Council [2008] NSWLEC 1428). Insofar as Mr Brindle's opinion (that the Council would be likely to support a SEPP 1 variation) does not address these matters, I would regard his opinion as speculative. 520 Moreover, I note from Mr Nash's evidence that, following exhibit of the draft LEP 2000 on 7 June 1999, by November 2000 the Council had resolved to undertake preparation of a new local environment study and plan for the Shire and had deferred all rezoning applications received at that time. 521 The evidence therefore suggests that the prospect of success of such a variation at least for the period from 2000 to 2004 could not be assumed. 522 As at 2004, I consider that a prudent purchaser's enquiries would be likely to have indicated that the previous 30 metre FBL did not or was unlikely to apply to Lot 1234 and hence 80% of the subject land would be able to be developed. 523 Had it been necessary to determine what a willing but not anxious purchaser would have paid for the subject land earlier than that, say in 1998 or 2003 (as opposed to January 2004 when it appears most likely that a more favourable 7.5 metre FBL was applicable), having regard to the potential FBL constraint, the best indication seems to me to be to ask what response would have been given to queries as to the FBL at that time. 524 In 1997/1998 Mr Lyons himself sought legal advice on the developmental constraints affecting the subject land. He was advised by Freehills on 7 August 1997 [Ex 3] that there was an applicable FBL of 30 metres from the mean high water mark line shown on the April 1980 plan but that it was not clear where that was. However, Freehills did say that it appeared most of the land was between the FBL and the foreshore (indicating a serious constraint on development though noting the possibility of a SEPP 1 variation). 525 Other advice obtained by Mr Lyons (or his property consultant Mr Binney) was that there was a 30 metre building setback and that six months was an optimistic estimate for an integrated development application (9-12 months being more likely) (letter dated 11 March 1997 from Gerry Shiels & Associates) and in September 1998 that the most significant constraint was the 30 metre setback (letter dated 11 September 1998 from W M Cortes & Associates) (Ex 3). 526 Whether or not the Lyons entities are correct in their assertion that at all relevant times (or, failing that, from 2000) there was a 7.5 metre FBL, that is not the advice they received from Freehills in 1998, or from Gary Shiels & Co in 1997, nor is it what a purchaser could reasonably have assumed from review of the DP for the land which appeared on its face to disclose a 30 metre FBL or would be likely to have been told by Council. 527 Reference was made by Mr Nash in evidence to a Council checklist in 2005 which indicated that even at that stage Council officers considered a 30 metre FBL still applied. Annexed as Appendix 2 to his second report is a copy of an initial meeting check list dated 28 May 2005 in relation to a DA application which noted "Adjoining land – 7(a) Waterways" and against item 11 that a 30 metre FBL was applicable. 528 Mr Webster says that a prudent purchaser would have obtained advice from an expert like Mr Brindle (or presumably also like Mr Nash) and approached the Council for advice as to the applicable FBL. Of course, if that purchaser had approached the Council it seems likely the Council would have said a 30 metre FBL applied (as per the 2005 checklist). 529 It seems to me that any purchaser enquiring as to the use to which the land could have been put in 1998 (or, for that matter, in the period from June or July 2003 through to at least December 2003, when the Lyons entities say they forewent the opportunity to obtain a valuation in order to refinance their loan or to obtain a development consent), would have been made aware, at the very least, that there was considerable doubt as to the development potential of the land arising out of the potential applicability of a 30 metre FBL. · Zoning restrictions 530 Restaurant was defined under clause 6 of the 1993 LEP to mean "a building or place, the principal purpose of which is the provision of food to people for consumption on the premises and includes a take-away food shop". 531 This definition was amended in the 2000 LEP. Restaurants were still permissible with consent in the 6(b) zone (which was the zoning for Lot 1234 under that LEP) but under the definition in clause 5 restaurant (does not include a food shop or a nightclub"; food shop being defined as a building or place, the principal purpose of which is the preparation and selling of food and refreshments to people for consumption off the premises, whether or not the selling involves a drive-through service. The explanatory note thereto makes it clear that it is the primary use or principal purpose which is relevant. 532 Mr Nash says, and it seems hard to dispute (though Mr Brindle, the town planning expert for the Lyons entities did) that take away food premises were not permissible under a 6(b) zoning from 13 December 2000. 533 Mr Nash noted that clause 6 provided a savings provision for development applications submitted but not finally determined by 13 December 2000. Those were to be assessed under the provisions of the 1993 LEP. The controls and provision of LEP 2000 were to be given weight in the assessment of any development application as a plan that had been exhibited but had not been made. 534 According to Mr Nash, a draft LEP 2003 was exhibited in February 2003 and re-exhibited from December 2003 to January 2004 as draft LEP 2004. LEP 2004 was adopted in March 2004. 535 The subject land was zoned private recreation under both draft planning instruments. The definition of "food shop" was revised not to include a drive-through service. 536 Mr Brindle, as I understand it, contends that provided the primary or principal purpose of the premises was for a sit-down restaurant, some take away use was permissible. That seems to me to follow from the definition. 537 However, insofar as Mr Lyons appears to have envisaged the use of two "fast food" outlets or restaurants, and had previously contacted a number of fast food operators such as Hungry Jacks to see if there were interest in the land, there might well be room for considerable debate in the context of any development application as to whether the primary purpose of preparation of food on such premises was for consumption on the premises or for take-away (or drive through) service. Hence, I think there is force to Mr Nash's conclusion that usage of the kind foreshadowed by Mr Lyons would not (or is unlikely to) have been a permissible use under the 2000 zoning. 538 Mr Lyons' view that a restaurant or fast food outlet would permit the most value to be extracted from the subject land did not appear to be shared by the expert real estate and valuation witnesses. Mr Edmonds and Mr Lunney both appeared to consider that an industrial usage would have been the more likely way of realising development potential for the land and that an industrial rezoning would have been easier to achieve and more suitable for the area. 539 Therefore, the constraints on zoning for restaurant use of themselves would not have precluded value being attributed to the land for development purposes. However, there is a real possibility that they would have precluded the use for which Mr Lyons so strongly contended. · Other constraints 540 There was a dispute as to the extent of any constraint posed by restrictions on access to the subject land. This related, broadly, to the question whether Lot 1234/5 could feasibly be developed (by an owner other than that of Lot 1) in circumstances where there was no direct access to Captain Cook Drive. Access was postulated (by Mr Pinder called by the Lyons entities) for the purposes of an hypothetical development application. I consider that his conclusion that such an application for access would have been likely to succeed was somewhat superficial. It certainly does not accord with Council's ultimate determination in relation to access through Lot 1 for Mr Galanos' development. 541 Mr Pinder's report, as a general observation, was not particularly impressive. Mr Pinder had been retained indirectly in what would seem to have been an informal manner by Mr Brindle (himself directly retained as an expert witness) to express an opinion. Mr Pinder's report appeared to be structured as a submission as to why a development consent could succeed despite any access constraints. Mr Pinder did not appear to refer to material (the IHAP report) which was contrary to his thesis and appeared to be arguing for a conclusion rather than objectively assessing the likely position. 542 Perhaps for this reason Mr Pinder's report does not appear to describe all of the material on which he relied. The means of access he proposed were those which were criticised by an Independent Hearing and Assessment Panel (IHAP) assessing DA 05/0293. The fact that the Roads and Traffic Authority took a different view from IHAP simply indicates room for difference of opinion. Mr Pinder was not prepared to accept that his view would not have been accepted, yet he conceded that he would not have put forward a development application based on that matter alone. I place no reliance on the Pinder report. 543 It seems to me that for any potential owner of Lots 1234/5 other than the owner of Lot 1, access would clearly have been an issue. 544 I think little weight can be placed on the other potential constraints identified (location of the land, its prior use as a tip, and potential environment), notwithstanding that matters of this kind feature in Mr Lyons' (and Mr Binney's) own correspondence as features negatively impacting the value of the land. This is because I am of the view that had a reasonable purchaser made enquiries at the relevant time (between 1998 to 2004) it is unlikely that the responses would have suggested that these posed substantial development constraints (as vague and uncertain as a number of them – such as the potential for there to have been hazardous or contaminated land fill – seem to have been). Conclusion as to market value in 2004 545 For the purposes of assessing any damages for trespass or for breach of contract by reference to the diminution in value of the property it is necessary to assume the infrastructure had been moved. 546 I do not accept that what was, to all intents and purposes, a mortgagee sale in April 2004 is the best indication in this case of the value of the property. 547 However, I also do not consider that the comparables used by Mr Edmonds and Mr Rennie were satisfactory. Mr Rennie's valuation appears to have been broad brush and is inconsistent with his earlier valuation. Mr Edmonds did not satisfactorily explain how he attributed a much increased square metre rate for property over and above that derived from the comparables which he did use. 548 In assessing the market value at April 2004 (without the infrastructure), what would an intending purchaser have taken into account as far as the development potential of the land was concerned? In terms of development constraints, the potential application of a 30 metre FBL would no longer have posed a problem; there must have been a risk that a DA for two fast food restaurants would not be approved; industrial use would probably have been seen as the best use but this would have required rezoning; and there were clearly access issues although these might have been able to be overcome. While the opening submissions of the Lyons entities seek to dismiss these as major concerns by reference to the fact that the owners of Lot 1 (Galanos) ultimately obtained a DA, I cannot assume that would have been case for a (non-anxious) non-Lot 1 purchaser. 549 As to the use of the smaller Lot 1235, it seems conceded that this was more restrictive. There was a dispute between Mr Lunney and Mr Edmonds as to what if any additional value it would have. I consider it unlikely to have had much value since the basis on which Mr Edmonds has ascribed value to it (ie preserving visibility of Lot 1234) would apply whether or not it was held together with Lot 1234. 550 Having considered the reports of the various expert witnesses (and noting Mr Webster's submission that valuation is an inexact science and involves a measure of guesswork), I am satisfied that the "unique" nature of the subject land was such as to warrant a significant discount (not a premium) and that the range of potential consent uses was problematic (whether the highest and best use was considered to be either for fast food restaurants (as Mr Lyons contends) since that gave rise to doubts as to what is meant by a prohibited "food shop", or industrial use (which required rezoning). 551 There was a disagreement between the valuers (who are much better placed than me to opine on this) as to what that discount should be. Given the conceded lack of direct comparables, I would tend to favour Mr Lunney's conclusion, but would allow an additional 10-20% to reflect the possibility that the Galanos sale was at an artificially depressed price having been achieved at a mortgagee sale. 552 I am not satisfied the presence of the infrastructure actually depressed the sale price in April 2004, since the sale was conditional on its removal, and since any prospective purchaser who asked about the electricity infrastructure would have been told of its imminent removal. The opinion was advanced by Mr Edmonds, for the Lyons entities, that potential purchasers would not have proceeded to make any such enquiries once they saw the electricity infrastructure on the land; he says they would have said it was all too hard and purchased elsewhere. However, the experts appear to accept that range of prospective purchasers would have been small in any event. Mr Edmonds appeared to concede that any prospective purchaser who was prepared to make enquiries as to the subject land would have been told that the infrastructure was going to be removed. 553 Accordingly, had it been necessary to determine this issue, I would have found the market value as at April 2004 (without the infrastructure) to have been in the order of say $660,000 - $720,000. 554 Ironically, perhaps, the mortgage valuation by Mr Rennie in July 1998 (for $750,000), given at a time when he was aware of the existence of the poles and based as it was on the value of the subject land being as part of a development together with Lot 1, is closer to the price achieved at the sale in May 2004 (and in my view more reflective of the market value in 2004) than the price ascribed by Mr Rennie in his more recent valuation. Damages for misleading/deceptive conduct 555 Turning then to the damages, if any, recoverable as a consequence of the misleading or deceptive conduct, which I have found to have occurred, the Lyons entities claim, broadly speaking, that in reliance upon the representation that the electricity infrastructure would be removed within the various suggested timeframes, they did not commence legal proceedings until 2004 to remove the electricity infrastructure and lost the opportunity to refinance the mortgage on the subject land or to obtain development consent and sell for a higher value. 556 The mortgagee took possession for sale on 19 February 2004. Although ultimately the conduct of the sale was taken over by the Lyons entities, it is alleged that the sale was at a lower price than the market value of the land. The damages claimed to have been suffered as a result were for that loss of value, calculated at $1,193,640. That figure is one which the accounting witnesses jointly agree represents the loss of value of the land assuming an obligation to remove the electricity infrastructure in September 2003. The problem with that assessment of loss is that I have found that there was no such obligation as a matter of contract. 557 The measure of damages under s 82 of the Trade Practices Act or its equivalent in the Fair Trading Act is that which compensates the plaintiff for the loss suffered by reason of the misleading and deceptive conduct - Grater v City Mutual Life Assurance Society Limited (1986) 160 CLR 1; Murphy v Overton Investments Pty Limited (2004) 204 ALR 26. Ordinarily it is not measured by the position in which the representor would have been had the representation proven to be correct. As the Lyons entities appear to accept, generally what is required is a comparison between the position of the person who has suffered the loss and the position in which that person would have been had there been no contravention. Damages therefore should be calculated not on the basis that the representation would have proven correct, (ie that the works would have been relocated in early September). 558 What must be considered is what would have happened had the representation not been made. So, for example, had EnergyAustralia in the letter of 11 July 2003 made no relevant representation or had it said that the electricity infrastructure would be removed but that it might or would take more than three to four months to do so or (as seems was the case) that it was expected to take three to four months and to be completed by the end of September but that was not certain. 559 Paragraph 19 of the second further amended statement of claim sets out what the Lyons entities allege would have been done but for the alleged representations. It is alleged that they would have: (a) commenced proceedings in the Supreme Court of New South Wales seeking orders that EnergyAustralia remove the electricity infrastructure and the notation on the title to the land, pay compensation, damages for trespass, rent, interest and costs; (b) obtained an order that EnergyAustralia remove the electricity infrastructure and the notation on the title to the land; (c) obtained a valuation of the land without the electricity infrastructure on it and with the notation on the title to the land removed; (d) obtained finance to discharge the mortgage registered on the title to the land; (e) proceeded to obtain development consent from the local council to erect two fast food restaurants on the land the adjacent land; (f) proceeded to sell the land for market value. 560 As I understand the case put by the Lyons entities they would have done all things in (a) to (e) before proceedings to (f). In other words, I do not understand the claim to be that but for the misleading and deceptive conduct, the Lyons entities would have proceeded in July 2003 to sell the subject land with the electricity infrastructure in place but without a development application. In my view this is significant since the evidence shows it is highly unlikely that a development consent would have been obtained in under 12 months and, on the Lyons entities' own evidence, a development consent would not have been able to be obtained while the electricity infrastructure was in place. 561 Moreover, the Lyons entities submitted that (and their expert, Mr Edmonds, was quite adamant that) the mere presence of the electricity infrastructure would have deferred any prospective purchasers. 562 Therefore, even had the case been put simply for loss of opportunity to sell the land as it was in July 2003, there is no evidence to suggest that a higher price would have been obtained at that stage than was later obtained in April 2004, albeit then in the context of a mortgagee sale. 563 The Lyons entities contend that it was reasonable, in reliance on the representations made to them, for them to take no action in the period from July 2003 to September 2003 (paragraph 71 Submissions in Reply) and that the court should accept that no such action was taken. 564 Accepting for present purposes that no action of the kind in (a) to (f) was taken in the period from July 2003 to April 2004 because the Lyons entities were relying upon the representation made in July 2003, it is still necessary in assessing damages for the misrepresentation to ask what position would the Lyons entities have been in had the misrepresentation not been made and would the Lyons entities have taken action earlier. 565 If in that event they would not have taken action of the kind alleged or if the action would not have produced any different or financially different result, then no loss can be shown as a result of reliance on the representation. 566 In that regard, what the Lyons entities would have done but for the misrepresentation in July 2003 might perhaps best be tested by reference to what in fact they did when they became aware (in September 2003) that the infrastructure had not been removed as had been represented to them. 567 First, they attempted to "prod" EnergyAustralia into action. It was not until January 2004, after there was a further failure by EnergyAustralia to adhere to the timetable for removal which had been foreshadowed and after their mortgagee had formally issued a notice of default, that the Lyons entities commenced these court proceedings. 568 Turning to what the Lyons entities say they would have done, the first step in the chain is the assertion (in 19(a) and (b)) that, but for the misrepresentation, the Lyons entities would have commenced proceedings and obtained an order for removal of the infrastructure. 569 I doubt that, had there been no misrepresentation, the Lyons entities would have proceeded immediately in July 2003 to commence proceedings (or to seek to obtain a mortgage valuation based on the development potential for use as two fast food restaurants or otherwise to obtain a refinancing of the loan). 570 This is because their conduct viz a viz the mortgagee shows that the Lyons entities were not uncomfortable issuing threats of litigation on which they did not immediately (or at all) follow through. Only once their financial position became more pressing, were proceedings actually instituted. I think it likely that this would have been the case whatever was said to them by EnergyAustralia in July 2003. 571 However, there remains a possibility that, had the misrepresentation not occurred, proceedings would have been instituted some time between July and December 2003. 572 What loss has been suffered by that delay? Even had the Lyons entities commenced legal proceedings in July 2003 the prospect of them thereby being in a position either to avoid the mortgagee sale which later occurred or to achieve a higher purchase price by reason of the removal of the electricity infrastructure seems to me to be minimal. 573 If, as I have found, there was no trespass, then the fact that legal proceedings might have been commenced at an earlier stage, does not change that result. The position therefore would have remained the same (absent any subsequent agreement or binding undertaking by EnergyAustralia to remove the infrastructure) namely, that the electrical infrastructure would have remained on the land. Accordingly, I do not accept that the Lyons entities have suffered any damages in that regard by reason of the loss of opportunity to commence legal proceedings in July 2003. 574 Commencement of proceedings at an earlier stage might perhaps have prompted EnergyAustralia to give a binding commitment to remove the electricity infrastructure within a set time frame. However, it is speculation as to what that might have been. EnergyAustralia might have been prepared to agree to a timeframe somewhere between the end of September and the end of 2003, (since the end of September 2003 was its then IPO completion date) though even then it might have sought to build in a further time for unforeseen contingencies. In any event, this is not a lost opportunity for which damages have been claimed. 575 The second step in the chain by which loss is said to have been caused (by a combination of 19(c) and (d)) is the loss of an opportunity to obtain a valuation of the property and, following that, finance to discharge the mortgage before April 2004. 576 Paragraph 25 of the second further amended statement of claim pleads that the Lyons entities (because of and in reliance on the representations) believed they would have sufficient time to refinance the mortgage before the mortgagee commenced proceedings for possession and therefore did not commence legal proceedings until January 2004. Deferral by the Lyons entities of attempts to refinance their mortgage and to obtain a valuation for that purpose are thus said to be causative factors in the result which occurred – re-entry by the mortgagee and compulsory sale. 577 It was agreed by Mr Lunney and Mr Edmonds that a valuation for mortgage purposes could have been obtained during the period April 2003 to 2004, notwithstanding the presence of the electricity infrastructure. If so, there is no reason why such a valuation could not have been sought immediately after it became apparent (in September 2003) that the infrastructure had not been removed. 578 I am not satisfied that the presence of the electricity infrastructure (or notation on title) necessarily precluded a mortgage valuation being obtained (whether to support a refinancing of the $500,000 loan or in some other amount). The electricity infrastructure was in place when the initial mortgage was obtained in 1998 and when it was refinanced in 2001. The easement notation was on title in 2001 but in any event it was removed in December 2003. 579 Mr Rennie apparently had no difficulty providing a valuation with the infrastructure place in July 1998. (Ex A1 Tab 1). Mr Galanos obtained a mortgage valuation in 2004 with the infrastructure in place (Ex O). EnergyAustralia contends that reliance on the July representation could only have been until September 2003 and that had proceedings been commenced in September 2003 there would have been sufficient certainty at that stage for the Lyons entities to obtain a mortgage valuation. 580 Whether or not legal proceedings had then been commenced it seems to me that it was open to the Lyons entities to obtain a valuation in September 2003 and, other than for some rather desultory communications with Herron Todd White and Richardson & Wrench, it does not appear that the Lyons entities sought to do so. Accordingly, no loss has been shown to have been caused by what was at best a two month period in which the Lyons entities could be said to have lost the opportunity to move ahead with obtaining a valuation of the subject land. 581 Turning to the alleged loss of an opportunity to refinance, again there was no evidence to suggest that, had the misrepresentation not occurred, the Lyons entities would have moved at an earlier time to seek (or would have been able had they done so to have obtained) mortgage refinancing. Such an application (which hypothetically would be on the basis of the electricity infrastructure remaining in place and with no certainty as to its removal) could have been made at any time before or after September 2003. 582 The real reason for the failure to refinance at that time seems to be that Mr Lyons placed no confidence in refinancing the property while the electricity infrastructure remained in place and, therefore, he did not seriously move to do so. Even when it became apparent that the infrastructure was not going to be removed by the end of September 2003, it does not appear that serious attempts were made to refinance the loan over the subject land. Therefore, even had the July 2003 representation not been made, I am not satisfied that the Lyons entities would have proceeded at that stage to seek or obtain refinancing. 583 On that basis I am not satisfied that any damage has been sustained by the misrepresentation made in July 2003 to the effect that the electricity infrastructure would be removed by early September 2003. 584 The next step in the loss chain (pleaded in 19(e)) is the loss of opportunity to obtain development consent. 585 In its submissions EnergyAustralia places considerable focus on the reliance pleaded in paragraph 19(e) of the second further amended statement of claim, submitting that the Lyons entities never had, and therefore never lost, the opportunity to sell with a development consent in place. 586 EnergyAustralia submits (relying on the evidence of Mr Nash and Mr Lunney) that the subject land could not have been developed into two fast food outlets because of constraints caused by the characteristics of the land and the applicable planning regime, (including the FBL, zoning constraints and difficulties with access). It is therefore submitted that no development application lodged with the Council prior to 12 December 2000 (of the kind Mr Lyons says he intended) would have been successful. 587 I have already considered the issues raised by both parties as to the existence and/or scope of the FBL restrictions at the relevant time(s) and have made reference to the other potential constraints affecting development of the land including the zoning issues. There is in my view a real issue as to whether a development consent would have been obtained for fast food restaurants at the relevant time (whether or not such a development would have been feasible), irrespective of the other development constraints. 588 Energy Australia further contended in relation to the position pertaining after July 2003 that the presence of the electricity infrastructure would not necessarily have prevented a development consent being obtained conditional on removal of the poles and therefore that it was at all times open for Mr Lyons to seek a deferred commencement consent (something which Mr Edmonds conceded could have been granted if an undertaking to remove the infrastructure within a certain time had been given). 589 In the context of a deferred commencement application, Mr Webster submitted that the "finality concept" (Proprietors of SP 13318 and 13555 v Lavender View Regency Pty Limited (1997) 97 LGERA 337) means that the Council would have needed all material before it as would enable it finally and properly to consider the effect of an application and that without information as to how the proposed new installation would affect the subject land and any development of the subject land, the Council would not approve any development of the subject land. It was said that any consent where the condition of consent left open the possibility that compliance might thereafter alter the nature of the development, would be invalid (Levenstrath Community Association Inc v Tomies Timber (2000) 108 LGERA 176). 590 If the submissions made by the Lyons entities in relation to the unavailability of a deferred commencement consent are correct, the presence of the electricity infrastructure as at July 2003-April 2004 would have made the development application even more complicated and less likely to be completed in the time available. 591 In any event, in my view the real difficulty with the Lyons entities' claim in this respect is that the actionable misrepresentation occurred in July 2003. Even if a development application had been lodged in July 2003 (on the assumption that no misrepresentation had been made and that the Lyons entities had therefore proceeded immediately to obtain a development application with a view either to refinancing or sale so as to forestall action by the mortgagee), it is not likely that the development application would have been finalised in under 12 months. 592 Mr Lyons conceded in cross-examination that this would have been a tiresome and costly process, and one which would probably be slow and was likely to involve a trip to the Land and Environment Court. Had such a process been commenced in July 2003, there could be no confidence that it would have been completed successfully before the property was sold in April 2004, and hence in time for a mortgage valuation to be obtained for refinancing the property on the basis that it had the benefit of an approved development application. Mr Nash's evidence was that 12 months was a more reasonable estimate for a development approval (as was Mr Shiels' estimate back in 1998). 593 Mr Nash's first report noted that Sutherland Shire Council had, over recent years, been one of the slowest councils in the benchmarking of assessment time for development applications – an average generally in excess of 100 days. He expressed the opinion that it would not be unusual for the assessment process for any development application under s 90 of the Environmental Protection Agency Act 1979 requiring referral to relevant government agencies to take up to 12 months. 594 Accordingly, I consider that even if there had been no misrepresentation, the prospects of the Lyons entities obtaining a development application in time to refinance or achieve a sale at a higher price (so as to avert the mortgagee sale process), had the process begun in July 2003, to be minimal. 595 Further, had it been necessary to make such a finding, I would have been of the view that the existence of the infrastructure was not the real cause of Mr Lyons' delay in making any development application for the subject land either for the period up to the making of the misrepresentation or afterwards. 596 Rather, it seems to me that the evidence establishes that Mr Lyons never intended that his companies themselves would develop the land and that he was reluctant to incur the costs of what he anticipated would be a lengthy process to seek development approval, so left any development application as a fallback or last resort. 597 The final step in the chain of loss is that pleaded in 19(f). The Lyons entities in effect claim by way of loss of the opportunity to sell the subject land for "market value". 598 However, if the Lyons entities had proceeded to put the land up for sale in July 2003 (or September 2003 or indeed any time from July 2003 to the date of the mortgagee sale in April 2004) while the electricity infrastructure was still in place, there is nothing to suggest that a higher price would have been obtained than that which was ultimately obtained in April 2004. 599 Any prospective purchasers who were reluctant to buy in April 2004 based on the existence of the electricity infrastructure would surely have been in the same position as at July 2003. True, the subject property might have been able to be marketed otherwise than as a mortgagee sale, but there is no evidence that the ultimate purchaser would have paid more had it not been a mortgagee sale. 600 The first time at which both experts agree that the FBL restriction was ameliorated was 20 January 2004. Prior to that, even if (as the Lyons entities contend) the correct construction of the LEP was that a 7.5 metre FBL applied, there would have been sufficient doubt as to this issue to put a prospective purchaser on notice of potential problems for any development of the subject land if that restriction applied. If the 30 metre FBL applied then the part of the subject land able to be developed was considerably reduced. A SEPP variation application could have been made. However, despite Mr Lyons' confidence as to the outcome of such variation I think a prospective purchaser would not assume that such a variation would be granted and would take that into account when determining what price it would pay for the land. Once the January 2004 change to the applicable FBL occurred, the value of the land would not have been subject to the same level of discount. However, there were still development constraints affecting the land. 601 I note the evidence of Mr Edmonds that most potential purchasers, seeing the infrastructure, would not have been interested in the site and would not have progressed to the stage of making enquiries. Mr Edmonds says, that work for the removal of the poles did not commence until 30 April 2004. He was of the opinion that (presumably at all times up until then) prospective purchasers would have been dissuaded by the presence of the poles. If so, it seems unlikely that the property would have been sold in the period from July 2003 for much (if at all) more than the $600,000 in fact realised the following year by way of the mortgagee sale. Conclusion as to damages for misleading and deceptive conduct 602 In the end the extent to which there were development constraints affecting the land is not critical to the question of damages for the misleading and deceptive conduct which occurred because the relevant representation I have found is that which was made in July 2003, (namely that the electricity infrastructure would be relocated in or by early September 2003.) By 16 September 2003 (and certainly by the end of September 2003) the Lyons entities were aware that the infrastructure had not been removed. 603 The Lyons entities did not in reality lose the opportunity to develop the subject land or to obtain a valuation to refinance the land by reason of the misrepresentation. They either had no real opportunity to do so in the time available (in the case of the development consent) or believed that any such steps would be futile (in the case of the refinancing). They chose not to take those steps after September 2003 at a time when they could no longer have place reliance on the July misrepresentation. 604 On the submissions put to me by Mr Webster in relation to the effect of the presence of the infrastructure on the ability to obtain a development consent, the Lyons entities cannot, by relying on the representations and deferring any application for development consent between July 2003 and September 2003 (or for that matter until April 2004), have lost any realistic opportunity to obtain a development consent, even had there been sufficient time for that process to be completed (which seems unlikely) before the mortgagee sale. 605 Of the actions said to have been taken in reliance of the misrepresentation (pleaded in paragraph 19 and the consequence of which is pleaded in paragraph 25), I am of the view that: (a) & (b) no loss has been suffered by reason of the delay in commencement of proceedings for trespass, as there was no trespass and no order would have been obtained; (c) & (d) the presence of the electricity infrastructure did not preclude the Lyons entities from obtaining valuation or raising finance. There was no real attempt to do so. Neither Mr Edmonds nor Mr Lunney considered that the infrastructure precluded raising finance. Mr Calleia asserted that the Lyons entities could have called upon intercompany loans for what he described as operational expenditure. Mr Lyons said his co-director (Mr Muhs) had the capacity to provide funding but he did not wish to ask him to do so. It would appear on that basis that the Lyons entities could have avoided a mortgagee sale in April 2004 had they wish to do so. I am not satisfied that had the misrepresentation not been made steps would have been taken between July and September 2003 to obtain a valuation and raise finance; (e) I am not satisfied that any attempt would have been made in the period from July 2003 to April 2004 (but for the misrepresentation) to obtain development consent. Mr Lyons was reluctant to incur costs in that regard. On his experts' own evidence he would not have been able to obtain consent while the electricity infrastructure was in place. The evidence is that it is highly unlikely that any development consent could have been obtained in under a 12 month period. (f) For the reasons set out above, a sale between July 2003 and April 2004, with the benefit of a development consent and without the electricity infrastructure in place was not feasible. 606 Therefore, I find that the Lyons entities suffered no loss as a result of the misleading and deceptive conduct by EnergyAustralia in July 2003. 607 I dismiss the plaintiffs' claim. ********** 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. 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