Supreme Court New South Wales Medium Neutral Citation: Trackcorp Adrenalin Pty Ltd v Bathurst Regional Council (No.3) [2014] NSWSC 690 Hearing dates: 18-22, 28, 29 November 2013, 26 February 2014 Decision date: 30 May 2014 Jurisdiction: Equity Division Before: Darke J Decision: Further Amended Statement of Claim is dismissed with costs. Catchwords: CONTRACT - breach - contract permitting plaintiff to hold motor sport event - exclusivity provision - whether defendant breached provision by allowing other promoters to conduct events substantially similar to plaintiff's event - no breach established EQUITY - remedies - rectification - alleged common intention not established NEGLIGENCE - existence of duty of care - whether duty owed by one contracting party to another to ensure no breach of exclusivity provision - duty not found to exist TRADE AND COMMMERCE - representations made in contractual negotiations - whether misleading or deceptive - no misleading or deceptive conduct found - Fair Trading Act 1987 (NSW) s 42 CONTRACT - breach - obligation to hold good faith negotiations - content of obligation - no failure to honestly and genuinely participate in negotiations - no breach established REMEDIES - restitution - mistake - fees paid in belief that local council was duly authorised to charge the fees - whether council duly authorised to charge the fees - council had authority to charge the fees - mistake not established LOCAL GOVERNMENT - power of Council to charge fees to hire motor racing circuit - whether only power is given by Part 10 of Chapter 15 of Local Government Act 1993 (NSW) - whether Council had power to charge fees under Chapter 6 of Local Government Act or general power to contract Legislation Cited: Interpretation Act 1987 (NSW) s 50(1)(e) Fair Trading Act 1987 (NSW) s 42 Local Government Act 1993 (NSW) Part 10 of Chapter 15 Mount Panorama Motor Racing Act 1989 (NSW) s 5 Cases Cited: Bush v National Australia Bank Ltd (1992) 35 NSWLR 390 Caltex Refineries (Qld) Pty Ltd v Stavar (2009) 75 NSWLR 649; [2009] NSWCA 258 Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1 Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329 Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 Dowling v Dalgety Australia Ltd (1992) 34 FCR 109 McCrohon v Harith [2010] NSWCA 67 McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2; (2008) 165 FCR 230 Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332 United Group Rail Services Limited v Rail Corporation New South Wales (2009) 74 NSWLR 618; [2009] NSWCA 177 Category: Principal judgment Parties: Trackcorp Adrenalin Pty Ltd (plaintiff) Bathurst Regional Council (defendant) Representation: Counsel: G A Sirtes SC, S A Lawrance (plaintiff) B W Rayment QC, J E Thomson (defendant) Solicitors: Whittens & McKeough (plaintiff) McIntosh McPhillamy & Co (defendant) File Number(s): 2010/76709 Publication restriction: Nil Judgment The nature of the claim 1In November 2007, the plaintiff ("Trackcorp") entered into a Track Hire Agreement with the defendant ("the Council"). The Agreement concerned the hire by Trackcorp of the Mount Panorama racing circuit in Bathurst for the purpose of conducting certain motor sport events on an annual basis over five years. The Council is the owner of the land upon which the circuit and associated facilities lie. 2Trackcorp seeks damages on the basis that the Council breached the exclusivity provision contained in clause 3.4 of the Agreement which provided: "BRC [the Council] agrees that during the term of this Agreement, the Promoter [Trackcorp] shall be the only event organiser/ promoter to be granted the right to conduct an event at the Circuit which is the same or substantially similar to the Event as negotiated by both parties." 3In essence, Trackcorp contends that the Council breached that provision when it permitted an organisation known as Festival of Sporting Cars ("FOSC") to conduct certain events at the circuit each Easter from 2008 to 2010, and when the Council itself conducted, in conjunction with Yeehah Events Pty Ltd ("Yeehah"), certain events at Easter in 2011 and 2012. 4In the alternative, Trackcorp contends that clause 3.4 should be rectified in two respects. First, to reflect an alleged common intention that Trackcorp would be the only promoter who had the right to conduct any timed or untimed non-racing event at the circuit catering to the holders of certain motor sport licences; and secondly, to reflect an alleged common intention that the Council would not charge any other event promoter a lower daily track hire fee than that charged to Trackcorp. It is then said that the Council allowed other non-racing events to take place, and charged FOSC and Yeehah track hire fees which were lower than those charged to Trackcorp. Trackcorp seeks damages for breach of the Agreement as rectified. 5Trackcorp further claims damages on the basis that the Council breached a duty of care said to be owed to Trackcorp to ensure, amongst other things, that no one would pay less than Trackcorp for track hire, and no one else would be permitted to conduct a non-racing event at the circuit which catered to the holders of certain motor sport licences. 6Trackcorp also seeks damages and other relief pursuant to the Fair Trading Act 1987 (NSW) on the basis that the Council, by making various pre-contractual representations (including as to future matters), engaged in conduct which was in contravention of s 42 of that Act. 7Trackcorp also alleges that the Council breached clause 3.2 of the Agreement which stipulated, in effect, that if Trackcorp gave notice that it wished to renew the Agreement for a further five years then, during the balance of the term of the Agreement, the Council was obliged to continue to hold good faith negotiations with Trackcorp regarding the track hire fees to apply for the renewed term. Trackcorp contends that the Council failed to negotiate in good faith, and claims damages for losses said to have been sustained as a result of such breach. 8Finally, Trackcorp alleges that the track hire fees it paid under the Agreement were paid by it under a mistake. It contends that the Council failed to comply with relevant statutory requirements such that it was not lawfully entitled to charge the track hire fees. Trackcorp contends that it paid the fees under the mistaken belief that the Council was entitled to charge the track hire fees. Trackcorp seeks restitution of the amount of the track hire fees it paid on the basis that such fees were moneys had and received by the Council to the use of Trackcorp. Background to the Agreement 9The genesis of the Agreement lies in amendments made in 2006 to the Mount Panorama Motor Racing Act 1989 (NSW), which increased the maximum number of permitted motor racing meetings at the Mount Panorama circuit from two to five. This meant that, in addition to the established Bathurst 1000 and Bathurst 12 hour events, there was the possibility of up to three further motor racing meetings each year. 10The directors of Trackcorp, Mr David Jellins and Ms Amelia Jones, considered that the increase in the permitted number of events at Mount Panorama presented an opportunity for Trackcorp to expand its operations to include an event at that circuit. As at 2006, Trackcorp was already engaged in the business of running and promoting private motor sport events and programmes at various venues throughout Australia, including Eastern Creek and Oran Park in Sydney, and Phillip Island in Victoria. In the latter half of 2006, Mr Jellins and Ms Jones developed a concept for an event to be held at Mount Panorama which would be directed towards car club members and motor sport enthusiasts who held Confederation of Australian Motorsport ("CAMS") Level 2S (L2S) licences, and would have a supersprint theme. An L2S licence issued by CAMS allows the holder to compete in what CAMS describes as non-racing events, but not in what CAMS describes as racing events. 11CAMS is the principal governing body in Australia for motor sport. It has promulgated National Competition Rules ("the Rules") which govern automobile competitions organised under the authority of CAMS. Certain features of the Rules should be noted. 12First, the Rules divide competitions into three kinds, namely, International, National, and Club. Different licence requirements apply to the participants in the different kinds of competitions. 13Second, distinctions are drawn in the Rules between races, speed events (which include supersprints) and regularity trials. A race may be either a circuit race or a drag race. A circuit race is defined as a competition held on a closed circuit between two or more automobiles running at the same time on the same course, in which the result is determined either by the order in which the automobiles cross the finish line after completing a specified number of laps, or by the distance covered in a specified time. 14A speed event is defined as a competition other than a race in which automobiles are timed individually along a defined course greater than 200m in length, and which is determined solely on the basis of the time recorded including any penalties incurred. The term "speed event" specifically includes supersprints. A supersprint is defined in the Rules as a multiple-car speed event, similar to a lap dash, conducted on a permanent sealed circuit in which two vehicles start simultaneously (and may be followed, after a suitable gap, by two other vehicles starting simultaneously). Elapsed times for a lap of the circuit, and not relative positions at the finish line, determine event placings. 15A regularity trial is defined as a competition in which each competitor nominates a target time (for completion of a lap of the circuit) and in which the results are determined on the basis of variation from this time. Greater variations incur penalties. The Rules specifically provide that a regularity trial shall not be, or include, a speed event. 16Thirdly, the Rules provide that for speed events and for regularity trials, the driver competing must at least have a CAMS L2S licence. 17Evidence was given by an expert in the area, Mr Steven Chopping. He was called by the Council. His evidence was not subject to any substantial challenge in cross-examination, and both parties placed some reliance upon his testimony. I accept his evidence. Mr Chopping explained that more onerous licensing requirements exist for race events than for speed events or regularity trials. He further explained that the vehicles which compete in racing events must include safety features which are more comprehensive than those required for vehicles which are allowed to compete in speed events or regularity trials. Negotiations between Trackcorp and the Council 18In July 2006, Trackcorp made contact with the Council to initiate discussions about the holding of an event at the Mount Panorama circuit. Trackcorp's initial point of contact with the Council was Mr Paul Heath, who was employed by the Council as a Director, Business and Economic Development. There was something of a hiatus between July 2006 and February 2007. 19On 21 February 2007, Mr Jellins sent an email to Mr Heath requesting that a meeting be arranged to discuss the idea of the "Jim Richards Bathurst Tour" which was envisaged to run over a two day period twice a year. On 7 March 2007, Mr Jellins sent a further email to Mr Heath which referred to a meeting which Mr Jellins had with a Mr Charles Jardine, and stated that Trackcorp was keen to run a two day "Bathurst Tour" in October, after the Bathurst 1000. 20Mr Jardine, who was involved with FOSC, had informed Mr Jellins that FOSC was thinking of running "an historic car race meeting" at the Mount Panorama circuit in the early part of 2008. 21As it was not possible to stage other events close to the Bathurst 1000, the idea of an October event had to be abandoned. There was then some discussion about an event taking place in December. On 2 April 2007, Mr Heath sent an email to Mr Jellins in the following terms: "As requested I have attached some information on booking Mount Panorama Racing Circuit with detailed fees and charges which should assist your planning. Please be aware that the 2007/2008 Fees and Charges have not been formally approved by Bathurst Regional Council at this stage but should be very close to the final numbers. For the dates requested, 5/12/07 to 9/12/07, to be held for you I would need to receive a non-refundable booking deposit of $7,500 by 30 April 2007. Until then I will pencil you in as an event which should give you sufficient time to make a firm decision. Can you provide your proposed Trackcorp event details as soon as possible so we can review as well." 22The attached information concerning the booking of the circuit contained the following statement: "Note: Full circuit hire fee is noted in Council's Fees and Charges, as a minimum of $6,000 per day. This fee is purely for circuit (road only, but not in race trim) with no inclusions. To hire the full circuit for a motorsport event, involves the full race track set-up, and is subject to a negotiated fee, which is currently $258,000, as resolved by Council in 2005, and subject to CPI adjustment. This has the following inclusions/exclusions: ..." 23Numerous specific items which were either included or excluded from the fee were then set out. One of the inclusions was described as "Spectator Areas, Campgrounds as necessary and available, and Carparking." 24The material attached to the email included a breakdown of the $258,000 fee. The breakdown was apparently undertaken by reference to various categories of costs, one item of which was described as an "Asset Renewal Contribution" of $50,000. The attached material also included an extract from Council's Statement of Revenue Policy which contained the following statement: "Full Circuit Closure - actual fees on negotiation Per day (minimum fee stated) $6,000" 25Trackcorp paid the $7,500 booking deposit on 2 April 2007. Also on that day, Mr Jellins sent an email to Mr Heath which included the following: "As discussed, we are currently looking at a 5 day event along the lines of: Wed: Orientation, training and Hot Lap sessions; Thu: Training Track Day for Car Clubs and Hot Lap sessions; Fri: Training Track Day for Car Clubs and Hot Lap sessions; Sat: Super Sprints for Car Clubs; Sun: Super Sprints for Car Clubs" 26A "Hot Lap" involves a qualified race driver taking a passenger around the circuit at high speed. 27Arrangements were made for a meeting to take place on 3 May 2007 in Bathurst. Trackcorp was represented at the meeting by Mr Jellins, Ms Jones and Ms Katie Iddon who has, since 2006, supplied various services to Trackcorp pursuant to contract. The Council was represented at the meeting by Mr Heath and Mr Simon Rollin, the Major and Special Events Manager. The events of this meeting are of considerable importance to the proceedings. They are dealt with in more detail later in these reasons. It is sufficient to note at this stage that Trackcorp alleges that various statements were made on behalf of the Council at the meeting, and that the statements form part of the basis of Trackcorp's claims for rectification and misleading or deceptive conduct. In particular, it is alleged that Mr Heath gave an assurance that the $258,000 circuit hire fee was "non-negotiable" or "fixed" and further, that no one would pay less than Trackcorp to hire the circuit. It is also alleged that Mr Heath said words to the effect that it was a requirement of the Council that all the events to be held at Mount Panorama were to be unique and not in conflict or competition with each other. Finally, it is alleged that Mr Heath said that the Council was in discussions with Mr Jardine of FOSC who was looking to run "an historic race meeting". 28On 4 May 2007, Mr Jellins sent an email to Mr Heath which included the following: "... We have deferred the idea of running a race meeting in the first year and we will be structuring our programme around corporate hospitality and club level events ranging from orientation and training through to passenger hot laps and full club Super Sprints. It would be great to start knocking the agreement into shape so please send over what you have. We would be looking for a minimum 5 year term contract with an option to renew. Naturally, we would also be looking for some comfort and protection in terms of keeping our event unique in the Bathurst calendar." 29Mr Rollin sent various booking forms to Trackcorp which contained some standard terms and conditions, but it is apparent that the parties intended to have a specific agreement prepared. On 7 May 2007, Mr Jellins sent an email to Mr Rollin which detailed a further refinement of the timetable for the proposed five day event. The first two days were described as a "Drive Event", and the final three days were described as a "Sprint Event". The email also stated that in addition to those events, Trackcorp would be running hot laps and demonstration laps at various times throughout each of the days, except for the final day which was to be devoted to Super Sprint events. 30In June 2007, Trackcorp submitted an application to CAMS for an Event Organising Permit. The event type was described on the application form as "various speed events and Super Sprint". On about 25 June 2007, Trackcorp commenced accepting applications for entry into the event. The standard entry fee for the Drive Bathurst component was $3,400, and $5,600 for the Sprint Bathurst component, although discounts were available for early entry. $950 was payable immediately upon application. 31On 24 August 2007, Mr Jellins sent various documents to Mr Heath, including an Event Business Plan. The business plan, which had been submitted as part of the application to CAMS, contained an overview of the event. The Drive Bathurst 2007 event was described as a "5 day invitation only" event comprising two separate events, namely, Drive Bathurst and Sprint Bathurst. Specifically, the business plan provided: "Drive Bathurst will run over 2 days (12 - 13 December) and offers a unique opportunity for participants to learn to drive this legendary circuit at their own pace (non-competitive format) whilst still enjoying spirited driving. The focus will be on circuit orientation and training, progressing through speed-limited sessions, and culminating in non-speed limited sessions on the final day. ... Sprint Bathurst will run over three days (14 - 16 December) and has been designed with the dedicated club sprinter in mind. The format will include circuit orientation, training sessions and speed-limited practice sessions, before moving to timed practice on the second day. Participants will then be seeded based on recorded practice times and a full Super Sprint will be run on the final day. 32Under the heading "The Event Format", the business plan further provided: "In allowing greater access to the Mount Panorama Circuit, it is the stated aim of the Bathurst Regional Council ("BRC") that each year they must have their own unique selling proposition. Agreements are already in place for two annual race meetings - one with AVESCO for the V8 Supercars, the other for the Bathurst International Motor Festival (a joint venture of the BRC). Each of the existing agreements places limitations on other race formats. Motorsport includes activities other than racing, and the cornerstone of motorsport in Australia is the club level competitor. Each year many of the CAMS permitted events that take place are not race meetings but Super Sprints and the like, supported and attended by club competitors. Most CAMS members do not own race cars or hold racing licences, but they are just as competitive and committed to their sport as their circuit racing counterparts and the paid professionals. In acknowledging all of these factors, the Organisers believe that the most appropriate format for a new event at Mount Panorama is a Super Sprint. ... The financial resources needed to stage an event at this venue are significant. The hire charges levied by BRC include a base charge of approximately $258,000 to close the road and set up the circuit. ... The quantum of the base charge, in conjunction with the projected track density, is such that it is not commercially viable to hire the circuit for short periods of time. The entry fees that would result would in all likelihood be prohibitive." 33Under the heading "Competitor Interest", the business plan included the following: "DRIVE BATHURST 2007 is certainly a commercial venture, but it is one that directly targets the club level competitor. For a new event to gather sufficient support to succeed, it must have a point of difference, should ideally cater to as wide an audience as possible and yet still maintain a certain sense of unattainability or exclusivity. By its very nature, a full circuit event at Mount Panorama that is not a race and is open to L2S licence holders delivers all these factors." 34Under the heading "Local Community", the business plan refers to an agreement reached between Trackcorp and the Council concerning "resident access breaks" during the event. These are periods which allow access to the track to residents who live on properties within the circuit. There were to be three such breaks each day. 35Also on 24 August 2007, Mr Heath sent a draft Heads of Agreement to Mr Jellins for his review. The draft agreement provided for the holding of a motor sport event as more fully described in an attached Schedule of Activities and which was defined as "the Event". The draft Heads of Agreement did not include any provision for exclusivity. The draft included a document headed "Full Track Set-up Costs for Motorsport" which was said to embody the Council's 2007/2008 fees and charges which were not available earlier in the year. The document included a figure of $277,177.63 for the total track hire fee (as compared to the earlier figure of $258,000). 36On 21 September 2007, Mr Jellins sent an email to Mr Rollin announcing that the five day Drive Bathurst 2007 event (to be held 12 - 16 December 2007) had been approved by CAMS. A media release was attached. 37On 10 October 2007, Mr Jellins sent an email to Mr Heath indicating that Trackcorp's lawyer was making some amendments to the draft Heads of Agreement, and that some clarification was sought concerning the "full track set-up costs". On the following day, Mr Heath sent an email to Mr Jellins which included the following: "As per the HOA, the "FULL TRACK SET-UP COSTS" to TRACKCORP are $277,177.63. We also discussed a small reduction in year 1 as this is a 5 year contract. I can confirm for Year 1 only, I will reduce the overall "FULL TRACK SET-UP COSTS" to TRACKCORP by $30,000 making the total amount payable in Year 1 to $247,177.63. Years 2 - 5 will be at the scheduled rate which generally increases by CPI each year." 38Mr Heath's email also referred to the need for Trackcorp to pay the balance of the 50% deposit by early the following week. In an email sent in response, Mr Jellins indicated that Trackcorp's understanding was that the reduction discussed was due to an acknowledgement that Trackcorp would not be utilising all of the facilities, and therefore the reduction "would apply in perpetuity". The email further stated that Trackcorp was looking for a minimum 5 x 5 year contract but would be reluctant to commit to such a term "in the absence of a more compelling deal - i.e. scheduled rate which generally increases by CPI each year". 39Also on 11 October 2007, Mr Jellins sent an email to Mr Heath with an attached marked-up Heads of Agreement from Trackcorp's lawyer, Mr Tony Clarke. Mr Jellins stated that Mr Heath and he should try to discuss the matter on 15 October 2007, in advance of a meeting scheduled to take place in Bathurst on 17 October 2007. 40The draft Heads of Agreement put forward by Trackcorp made no changes to the Schedule of Activities which described the Event. Amongst the numerous amendments which were made was the inclusion of an exclusivity provision in the following terms: "3.5 BRC agrees that during the term of the Agreement, the Promoter shall be the only event organiser/ promoter to be granted the right to conduct an event at the Circuit which is the same or substantially similar to any part or all of the Event. This is an essential term." 41Clause 4.2.1, which referred to a negotiated fee as per an attached schedule, was amended to add an exception so that Trackcorp would not be liable for the fees to the extent that any individual facility or service referred to in the schedule was not reasonably required by Trackcorp for the conduct of the event. The schedule itself was amended so that it was, in effect, left blank. 42On 12 October 2007, Mr Heath sent an email to Mr Jellins in relation to the draft which had been submitted. The email noted a number of points of concern. These included the provisions dealing with exclusivity and the schedule of fees. Relevantly, the email stated: "Clause 3.5 Exclusivity. I understand what you are trying to achieve but this could be difficult as we already have other events committed which have hot laps, driver training and whilst I am keen to have all events fundamentally different, this may become a point of contention which we have resisted with other events wanting something similar. ... Clause 4.2.1 Schedule of Fees. The fees were not designed to be unbundled but provided that way so that an understanding could be gained as to why the fees are of that magnitude as previously discussed. I will provide you with a new schedule format to avoid this potential confusion." 43The email also raised the issue of payment of a 50% deposit, which was stated to be now due. It was further stated that if the parties were unable to complete the transaction by the end of 17 October 2007 (the day of the proposed meeting between the parties), then the event would be cancelled. 44It appears that there were telephone discussions between Mr Heath and Mr Jellins on either 15 or 16 October 2007. An email from Mr Heath to Mr Jellins on 16 October 2007 refers to a telephone hook up in which the Council agreed to track hire fees of $247,178 for year 1, with the fees for years 2 to 5 to be subject to increases in accordance with the CPI. Later on that day, Mr Jellins sought confirmation that the figures for track hire were GST inclusive. Later still on 16 October 2007, Mr Jellins sent Mr Heath a further draft Heads of Agreement which was apparently Mr Jellins' attempt to address Mr Heath's concerns about the earlier draft. This draft contained an exclusivity clause in the following terms: "3.5 BRC agrees that during the term of the Agreement, the Promoter shall be the only event organiser/ promoter to be granted the right to conduct an event at the Circuit which is the same or substantially similar to the Event." 45Clause 4.2.1 was amended in this latest draft to remove the exception which Trackcorp had earlier suggested. 46Mr Jellins, Ms Jones and Ms Iddon travelled to Bathurst on 17 October 2007 to meet with Mr Heath. As is the case with the meeting of 3 May 2007, the events of this meeting and a later meeting held on the same day with the General Manager of the Council, Mr David Sherley, are of considerable significance to the proceedings. Trackcorp alleges that in the earlier meeting, Mr Heath gave assurances to the effect that no one else would be permitted to conduct an event such as Trackcorp's event (which was stated to be an event catering to L2S licence holders), and that no other promoter would pay less than Trackcorp for the hire of the track. As for the later meeting, Trackcorp alleges that it received similar assurances from Mr Sherley. It is also alleged that Mr Sherley stated, in effect, that the resident access requirements for Trackcorp's event would be the same as the requirements applicable to the Bathurst 1000 and the Bathurst 12 hour events. Again, these meetings will be dealt with in further detail later in these reasons. 47Following the meetings on 17 October 2007, Trackcorp paid the balance of 50% deposit (being the sum of $119,839). It did so upon the basis that the Council agreed that such sum was fully refundable in the event that the Heads of Agreement was not executed within 7 days. 48Later on 17 October 2007, Mr Heath sent an email to Mr Jellins which attached what was described as a final draft of the Heads of Agreement for Mr Jellins' review. The email refers to amendments made "as per our discussion this morning". 49This draft made a further change to the exclusivity provision. The provision was now in the following terms: "3.5 BRC agrees that during the term of the Agreement, the Promoter shall be the only event organiser/ promoter to be granted the right to conduct an event at the Circuit which is the same or substantially similar to the Event as negotiated by both parties." 50A new Schedule of Fees was included. Under the heading "Schedule of Negotiated Fees (including GST)", the fee for each of the five years of the agreement was set out, commencing with $247,178 for the first year. It was also noted in the schedule that whilst CPI increases of 3.5% per annum had been assumed, the fees for the following years would be based on the actual movement of the CPI. 51On the following day, Mr Jellins sent an email to Mr Heath in which he stated that the agreement "now looks fine to me", and that he had sent it to Mr Clarke for a final look. It is not clear whether any further changes were suggested by Trackcorp at that stage. However, on 22 October 2007, Mr Heath sent an email to Mr Jellins which attached what was described as a "final version" for Mr Jellins' review. This version was now in the form of an Agreement rather than a Heads of Agreement and a number of consequential changes were made. Otherwise, the final version was substantially in the form of the draft which had been sent to Mr Jellins on 17 October 2007. 52Some further amendments were made to the draft on 24 October 2007. Some of those were suggested by Mr Clarke including changes to the option contained in clause 3.2. The option was now expressed as an option to renew the Agreement for a further five annual Events. A provision was added requiring the Council to hold good faith negotiations with Trackcorp regarding the track hire fees to apply in respect of any renewed term. No amendments were suggested in relation to the exclusivity provision or the provision dealing with the circuit hire fees. 53On 25 October 2007, Mr Heath sent an email to Mr Jellins which attached an electronic copy of the Agreement as signed by the Council. Hard copies of the Agreement were to be posted to Trackcorp, who were requested to sign the copies and return one to the Council. In fact, the Agreement as signed by Trackcorp was not sent to the Council until 7 November 2007. It was received by the Council on 9 November 2007. 54In the meantime, there was further communication between Mr Heath and Mr Jellins on various issues including the question of resident access breaks. Mr Jellins, in an email sent on 29 October 2007, stated that he thought there was to be "one resident break over lunch as per other events run over the full Mount Panorama Circuit". In reply to that email, Mr Heath seemed to suggest that he had a different understanding, but in any case, he stated that to remove the morning and afternoon breaks might result in a "strong resident backlash which may also impact on the issuing of your permit". Presumably, that is a reference to the permit which is required under s 5 of the Mount Panorama Motor Racing Act to authorise the Council to hold a meeting for motor racing and associated events. 55Mr Jellins indicated to Mr Heath that he was happy to discuss the issue, but pointed out that officials of the Council (including Mr Sherley) kept telling Trackcorp "not to offer anything different to the other events". Mr Jellins also expressed a concern that additional breaks would impact upon the commercial viability of the event. 56On 1 November 2007, Mr Heath sent Mr Jellins draft documents which dealt with proposed resident access breaks, and information to be provided to the residents. These documents provided for three access breaks per day (totalling 65 minutes) and for the circuit to be otherwise closed from 7:30am (except for the final day when it was to be 8:30am) until 6:45pm (except on the final day when it was to be 7:00pm). Various changes or refinements to these documents appear to have been discussed between the parties in November 2007, but there does not appear to have been any departure from the position that there would be three resident access breaks per day. 57On 4 December 2007, a permit was issued under s 5 of the Mount Panorama Motor Racing Act authorising the Council to conduct motor racing events/practice and associated events on the circuit between 12 and 16 December 2007. 58The inaugural Trackcorp event took place between 12 and 16 December 2007. Subsequent Trackcorp events were held in December 2008, November 2009, November 2010 and November 2011. Negotiations between FOSC and the Council 59During much of 2007, the Council was in negotiations with FOSC as well as Trackcorp in relation to the staging of events at Mount Panorama. In a report by Mr Heath to the Council in June 2007, a proposed FOSC event was described in the following terms: "This event is working with car clubs to promote club level racing together with developing driver skills to ensure safe racing and the opportunity for club members to race under full racing conditions. No other organisation is providing this facility to car clubs and offering the opportunity to race competitively at the world famous Mount Panorama Racing Circuit in Bathurst." 60On 20 June 2007, the Council resolved to authorise Mr Sherley to enter into Heads of Agreement for three new events at the circuit, including the events to be conducted by Trackcorp and FOSC. It appears that a Heads of Agreement was entered into between the Council and FOSC on about 13 September 2007. That document contained a Schedule of Activities which relevantly describe the FOSC event in the same terms as Mr Heath described it in his earlier report to Council. The document also contained a schedule of proposed fees over the five year term of the agreement. As was the case with Trackcorp, the fees proposed to be charged were lower than those which Council stated by reference to "full track set-up costs". The fees escalated throughout the five year term. The total of the fees payable over the five years was similar to the total of the fees payable by Trackcorp throughout the five year term of its agreement. It should be noted, however, that the FOSC event was a seven day event. 61Subsequently, the Council and FOSC entered into a track hire agreement which is structured similarly to the agreement entered into with Trackcorp. This agreement was evidently prepared prior to Easter 2008 when the first FOSC event was held, although it does not appear to have been signed by the Council until July 2008. I nonetheless infer that the 2008 event, and the subsequent FOSC events, were all governed by the terms of the track hire agreement. The agreement contains an exclusivity clause which is in the same terms as that found within the Trackcorp agreement. The Schedule of Activities, which describes the FOSC Event, is in a form somewhat different to that which was attached to the Heads of Agreement. The event was described in the following terms: "The event will comprise of two parts and both are being managed by the Festival of Sporting Cars (FOSC) as the promoter. One event to be known as Celebration of Motor Sport is working with car clubs and their associates to promote club level racing together with developing driver skills to ensure safe racing and the opportunity for club members to race under full racing conditions. No other organisation is providing this facility to car clubs and offering the opportunity to race competitively at the world famous Mount Panorama Racing Circuit in Bathurst. The pitt/paddock area at Mount Panorama will see many car clubs mount a substantial display of their cars. In addition, FOSC have as their major sponsor Mercedes-Benz who will be using four days of the seven day track time for their own activities as follows: Mercedes-Benz will utilise Mt Panorama and nearby facilities for the purpose of launching and introducing the Mercedes-Benz Car Group product range as exclusive drive experiences to our AMG customer base as well as programs for the Mercedes-Benz Young Licence Drivers and Active Safety Experience programs in line with our global brand requirements. Product presentations to motoring media and Mercedes-Benz Dealer network conference requirements will also be accommodated both on track and at the Resort facilities." Further dealings between Trackcorp and the Council concerning resident access and track hire fee 62On 8 February 2008, Mr Heath sent an email to Mr Jellins and Ms Iddon in relation to "Residents Issues". Mr Heath indicated that the Council was in the process of developing a policy as to resident access during motor racing events. The draft policy, as it would have applied to the Trackcorp event, provided for a one hour break at lunch time and a thirty minute break each morning and afternoon. These breaks were longer than those which occurred during the recently conducted event. The draft policy also provided for the circuit to close at 8:30am rather than 7:30am each day, and re-open at the earlier time of 5:30pm each day. Mr Heath appreciated that such a policy might impact upon Trackcorp's event and he sought feedback from Trackcorp about the draft policy. Trackcorp, in its response, stated that the event requires eight hours of track availability in each of its five days. 63At about this time, Trackcorp became aware of information which suggested that the track hire fee payable for the forthcoming FOSC event was in the order of $190,000. Trackcorp also became aware, through a media release issued by FOSC, that FOSC intended to include "regularity events" in its programme. Regularity events, as noted earlier, are not regarded by CAMS as racing events, and are open to the holders of L2S licences. Trackcorp was sufficiently concerned by these developments that it consulted its solicitor, Mr Clarke. A draft email, to be sent to the Council, was prepared by Mr Clarke, but was not in fact sent. However, Trackcorp subsequently made complaints to the Council about the events staged by FOSC. 64The development of the resident access policy continued throughout 2008. On 7 July 2008, Mr Jellins, in response to a further draft of the policy (which also stipulated that the circuit must re-open by 5:30pm for resident access), stated that Trackcorp could work within a 7:30am to 5:30pm timeframe "provided that the fee charged to us is adjusted accordingly". 65The issue was further discussed at a meeting held on 22 July 2008 attended by Mr Jellins and Ms Iddon and representatives of the Council including Mr Robert Roach. Mr Roach was the Director, Corporate Services and Finance. A memorandum prepared by Mr Roach for Mr Sherley suggests that, at the meeting, Trackcorp stated that it required eight hours of clear track time each day, was opposed to any resident access breaks apart from one hour at lunchtime, and wanted the track hire fee to be reduced to $229,200 (the amount which FOSC was to pay for its event in 2009). 66On 21 August 2008, the Council informed Trackcorp that it had resolved to reduce the track hire fee for year 2 of the contract from $255,829 to $223,850 "based on a track availability" time of 35 hours over a 5 day period. That is, the circuit would be available each day between 8:30am and 5:30pm, with three resident access breaks having a total duration of two hours. Trackcorp was requested to advise if the proposed variation was acceptable to it. 67A meeting was held on 9 September 2008 between Ms Iddon and Mr Roach. At that meeting, Ms Iddon expressed Trackcorp's dissatisfaction with the resident access policy and the adequacy of the proposed reduction in the track hire fee. On 11 September 2008, Mr Roach sent a letter (incorrectly dated 11 August 2008) to Ms Iddon in which it was indicated that the circuit would be available each day between 7:30am (rather than the previously advised 8:30am) and 5:30pm, with three resident access breaks having a total duration of two hours. The letter further indicated that the track hire fee for the 2008 event would be $223,850, of which 50% needed to be paid by 19 September 2008, and the balance 30 days prior to the commencement of the event. A track hire fee of $223,850 was subsequently paid by Trackcorp for its 2008 event. Other events held at the Mount Panorama circuit 68The inaugural FOSC event was held over seven days between 17 and 23 March 2008. As noted earlier, Trackcorp complained to the Council about the FOSC event. In particular, Trackcorp claimed that as the event included regularity events (which are open to the holders of L2S licences) it was in conflict with the exclusivity provision in the Agreement. This concern was first raised with the Council during a meeting held in Sydney on 8 May 2008. 69By that time, Ms Iddon had ascertained, from the published results for the "Celebration of Motor Sport" component of the 2008 FOSC event, that of the 44 timed sessions, 7 (approximately 16%) were regularity events open to L2S licence holders, and of the 445 competitors, 128 (approximately 29%) were participants in the regularity events. The "Celebration of Motor Sport" component comprised three out of the seven days for the FOSC event. The other four days were taken up with activities associated with Mercedes-Benz, a sponsor of the event. 70In late 2008, FOSC was experiencing difficulties in obtaining similar sponsorship for its 2009 event. On 18 November 2008, FOSC proposed that their agreement with Council be varied to provide, in respect of 2009 only, for a four day event and a reduced circuit hire fee. The Council did not agree to a reduction of the fee. As far as the evidence reveals, the 2009 FOSC event was in fact conducted over three days at Easter (10, 11 and 12 April 2009). Unlike the inaugural FOSC event, a car manufacturer sponsor was not able to be secured. 71Ms Iddon ascertained from the published results that, on this occasion, of the 35 timed sessions, 11 (approximately 31%) were regularity events open to L2S licence holders, and of the 412 competitors, 170 (approximately 41%) were participants in the regularity events. Trackcorp expressed its concerns to the Council about the "ever-morphing" FOSC event, and its effect upon Trackcorp's own event, at a meeting with Mr Roach on 24 September 2009. 72In late 2009, FOSC made it known that it was intending to include a six hour regularity event as part of its 2010 event. This fact was brought to the attention of Council by Trackcorp. Mr Roach thought that such an event appeared to be outside the scope of the event as described in the FOSC agreement (the stated aim of which was to promote club level racing), and may also be "in conflict" with other endurance events conducted at the circuit, namely, the Bathurst 1000 and the Bathurst 12 hour. There was some discussion between the Council and FOSC on this issue, and legal advice was obtained by both sides. There was no immediate resolution of the issue. It seems that a decision was made within the Council not to support the holding of a six hour regularity event or the obtaining of a permit for such an event. Mr Roach conveyed that information to Trackcorp at a meeting held on 8 December 2009. On that occasion, Ms Iddon again expressed concern at the extent to which the FOSC event involved regularity events. 73At about that time Ms Iddon also expressed concern to Mr Roach about the involvement of Porsche Cars Australia in the proposed six hour event. She stated, in an email to Mr Roach dated 15 December 2009, that this "directly conflicts with our contract with BRC". Mr Roach reviewed the Agreement with the assistance of Council's lawyers and could not discern any such conflict. In a further email sent to Mr Roach on 21 December 2009, Ms Iddon emphasised Trackcorp's concern that no action was being taken to prevent the marketing of the six hour event, including the involvement in such event of Porsche Cars Australia, when "over 35% of all Drive Bathurst competitors are Porsche owners". On 19 January 2010, Ms Iddon sent a further email to Mr Roach. This email contained, amongst other things, a detailed argument as to how the inclusion by FOSC of regularity events undermines Trackcorp's event which is aimed at club level competitors who hold an L2S licence. 74At that stage the issue of the six hour event had still not been resolved as between the Council and FOSC. However, in the latter part of January 2010, after the Council had stated that FOSC had failed to show how it was going to stage an event which was in accordance with its contractual obligations, FOSC informed the Council that it would not be proceeding with the six hour regularity event. 75On 9 March 2010, in the course of discussions which followed between FOSC and the Council, the Council indicated its willingness to vary the agreement "to permit club racing for a period of 5 days" from 2 April 2010 to 6 April 2010 in accordance with a programme which had been attached to an updated business plan which had recently been received. This plan (which was an attachment to an email dated 4 March 2010) does not seem to be in evidence. The Council further stated, at that time, that it did not accept that "V8 Hotlaps" or "V8 Drives" (which were scheduled to take place on 31 March 2010 and 1 April 2010) were within the scope of the contract. 76On 16 March 2010, FOSC sent a letter to the Council which stated that FOSC agreed to the variation which was described in Council's earlier letter. The FOSC letter then went on to state that the V8 Hotlaps and V8 Drives would not be part of the upcoming event and that, instead of those activities, some driver training and instruction activities were proposed for 31 March 2010 and 1 April 2010. 77On 17 March 2010, the solicitors for the Council sent a letter to FOSC in which it was stated that Council rejected the asserted entitlement "to change the character of the event from 3 days of racing with 4 days of promotional activity to 7 days of club racing (or 5 days of club racing and 2 days of V8 Drives and other ill-defined activities)". It was pointed out that barely 2 weeks before the event was due to commence, the parties appeared to be at an impasse. The letter continued: "Rather than allow this difficulty to require the cancellation of the whole event, we are instructed to formally propose an interim compromise resolution applicable to this one occasion only and without affecting in any other way the rights and obligations of the parties under the contract. Our client is prepared for the 2010 Easter event to proceed for Club Racing for a period of 5 days according to the program for Friday 2 April 2010 to Tuesday 6 April 2010 inclusive as attached to the updated Business Plan." 78It appears that the 2010 FOSC event in fact proceeded on that basis. 79On 26 March 2010, one week before the scheduled commencement of the FOSC event, Trackcorp commenced these proceedings by the filing of a Summons. Declarations were sought to the effect that the regularity aspects of the proposed FOSC event were substantially similar to the Event as identified in the Agreement between Trackcorp and the Council. Interlocutory relief was claimed against the Council in relation to those proposed activities. Affidavits sworn by Mr Jellins and Ms Iddon were served in support of the relief claimed. Amongst the affidavits served by the Council in relation to the application for interlocutory relief was an affidavit sworn by Mr Jardine of FOSC. Included in that affidavit was a statement that the FOSC event "does not include any supersprint element". The application for interlocutory relief was ultimately not pursued by Trackcorp. 80The 2010 FOSC event took place over five days from 2 - 6 April 2010. The event comprised two parts, each of two and half days duration. The first, called "Mount Panorama - The Way It Was", was largely aimed at historic cars and mainly consisted of racing events, although some regularity events were also included. The second, "Car Clubs of Australia Regularity Festival', consisted, as its name suggests, of a series of regularity events. 81The evidence is not clear as to how many regularity events took place as part of the "Mount Panorama - The Way It Was" section of the 2010 event. An event programme suggests that out of 38 events, 10 (approximately 26%) were to be regularity events. The published results in evidence show that at least eight regularity events were involved in this part of the 2010 event. Presumably, all of the events in the "Car Clubs of Australia Regularity Festival" were regularity events. 82In addition, the published results suggest that many of the regularity events were not conducted as proper regularity events, but were instead, in substance, supersprints. Many of the events are actually described in the results as supersprints, and do not include nominated lap times. Moreover, some other events, despite being described as regularity events, do not appear to be events where times were nominated. The nomination of lap times by competitors is central to the concept of a regularity event. The aim of participants in such an event is to complete laps in a time as close as possible to the nominated time. Consistency, not speed itself, is rewarded. Finally, some of the results indicate that even in events where times were nominated, many participants either failed to so nominate a time, or nominated an unrealistically high or low time, thus revealing that the participants were not at all concerned about achieving consistency with a nominated time. 83It is the Council's position that it did not approve or otherwise sanction FOSC to conduct supersprint events. Evidence was given by Mr Rayner, a Council employee who was the manager of the circuit. He had a supervisory role in relation to events run at the circuit. Mr Rayner deposed that he thought that the regularity events on the programme for the 2010 FOSC event were all conducted in a manner consistent with being regularity events. Mr Rayner's evidence was not challenged. Neither was there any challenge to Mr Roach's evidence that the Council did not give FOSC any approval to conduct supersprints. Moreover, Mr Chopping gave evidence to the effect that whilst race officials who are responsible to CAMS, such as stewards and time keepers, might be expected to know if a regularity was in fact being conducted as a supersprint, a track owner would not be expected to have any records of nominated lap times. Finally, there was evidence that the Council subsequently relied on the allegedly irregular manner in which the regularity events were conducted in 2010 to justify its termination of the FOSC agreement. In these circumstances I conclude that the Council did not give any approval to FOSC to conduct supersprints at the circuit. 84Following the 2010 FOSC event, discussions resumed between FOSC and the Council concerning their contractual position. In the course of those discussions, Council sought details of what FOSC proposed for its 2011 event. Little or no progress was made in the discussions. At one stage mediation was considered, and some further discussion occurred. However, on 8 July 2010, FOSC stated in a letter that if the issues between the parties were not clarified satisfactorily by 19 July 2010 then "FOSC will be in no position to take up its contractual rights in 2011". 85In September 2010, FOSC indicated that it was "presently programming our Easter 2011 meeting for another venue, and strict deadlines apply", and further "that it would not be taking up its contractual right in relation to Easter 2011". On 7 October 2010, the Council served notices on FOSC calling upon it to remedy various alleged breaches or anticipatory breaches of the agreement. On 16 November 2010, the Council served notices of termination of the agreement. 86On 2 December 2010, it was announced that agreement had been reached for a new event, known as the Bathurst Motor Festival, to be conducted by Yeehah in conjunction with the Council over Easter 2011, in place of the FOSC event. 87The Bathurst Motor Festival Event was conducted over four days between 22 and 25 April 2011. This occurred pursuant to an agreement between the Council and Yeehah dated 20 April 2011. Clause 2.1 of the agreement provided: "2.1.1 The parties agree to conduct the Event under the terms of this Agreement. 2.1.2 The motor sport event shall comprise racing of automobiles identified by CAMS as the following: (a) 1st Category Racing Cars (b) 2nd Category Sports Cars (c) 3rd Category Touring Cars in a program of races which shall be approved by the Management Committee. 2.1.3 The motor sport event shall not include endurance racing. 2.1.4 The motor sport event may include such other activities ancillary to motor sport as approved by the Management Committee including without limitation automobile display, "show and shine", Hot Laps and Modern Regularity." 88The event programme for the festival reveals that numerous races were scheduled to occur over the first 3 days. Some regularity events were also scheduled on those days. The fourth day was to involve "V8 Race Experience Activity". According to Ms Iddon, that meant Hot Lap activities. Ms Iddon ascertained, from the published results, that of the 37 timed sessions over the first three days, 10 (approximately 27%) were regularity events open to L2S licence holders, and of the 247 competitors, 83 (approximately 34%) were participants in the regularity events. 89A further Bathurst Motor Festival was held in 2012. The event programme shows a schedule of events of a similar character to the events conducted over the first three days of the 2011 festival. There were no Hot Lap activities in 2012. Did the Council breach clause 3.4 of the Agreement? 90Clause 3.4 of the Agreement provides: "BRC [the Council] agrees that during the term of this Agreement, the Promoter [Trackcorp] shall be the only event organiser/ promoter to be granted the right to conduct an event at the Circuit which is the same or substantially similar to the Event as negotiated by both parties." 91The promise by the Council is that no other event organiser or promoter will be granted the right to conduct an event which is the same or substantially similar to "the Event as negotiated by both parties". "The Event" is the defined term given in clause 2.1 of the Agreement to the expression "a motor sport event at Mount Panorama to be known as driveBathurst and sprintBathurst events as more fully described in the attached Schedule of Activities (contained in Schedule 2)". However, in clause 3.4, the parties have not employed that defined term on its own, but have added to it the words "as negotiated by both parties". 92Mr Sirtes SC, who appeared with Mr Lawrance for Trackcorp, submitted that those additional words had the consequence that the Event for the purposes of clause 3.4 was not confined to the Event as described in the Schedule of Activities, but extended more broadly to the Event which was actually agreed upon by the parties in their negotiations. 93Mr Rayment QC, who appeared with Mr Thomson for the Council, submitted that the Event "as negotiated by both parties" consisted of the Event as described in the Schedule of Activities with the additional component of Hot Laps sessions which the parties had specifically agreed in their negotiations would be included in the Event. Mr Rayment suggested, by reference to evidence given by Mr Jellins in cross-examination on this topic, that there was common ground on this matter. However, Mr Jellins' understanding is not determinative, and I understood Trackcorp's submission concerning the construction of the expression to have been somewhat broader. 94In any case, it is my view that the expression "the Event as negotiated by both parties" encompasses the motor sport event comprising the combination of activities the parties agreed would form part of the Event which Trackcorp is entitled, by clause 3.1 of the Agreement, to stage each year throughout the term of the Agreement. 95In circumstances where the description of the Event contained in the Schedule of Activities is not expressed in exhaustive terms, "the Event as negotiated by both parties" is broad enough to capture activities, not specifically mentioned in the Schedule, which the parties have nonetheless agreed would form part of the Event. However, "the Event as negotiated by both parties" does not in my view extend to any activities unless the parties have agreed that such would form part of the Event which Trackcorp had the right to stage. The mere fact that the Event or parts of it may have been described or referred to in the course of the parties' negotiations in a particular way does not mean that such descriptors themselves form part of the Event which Trackcorp had the right to stage. If that were the case, a large degree of imprecision would be introduced into the concept of "the Event as negotiated by both parties". It is unlikely that the parties would have intended such an outcome, given that the concept was intended to be the benchmark against which other events would need to be compared for the purposes of clause 3.4. The operation of the clause would be problematic if the nature of "the Event as negotiated by both parties" had to be discerned from the myriad of communications about the proposed event, both written and oral, which passed between the parties in the course of their negotiations for the Agreement. 96In assessing whether any breach of clause 3.4 has occurred, it is necessary to compare the Event as negotiated by both parties with some other event conducted at the circuit by some other organiser or promoter. The critical question is whether that other event is the same as or substantially similar to the Event as negotiated by both parties. The whole of each relevant event must be considered in making the comparison. I reach that conclusion based on the language of the clause, without resort to the circumstance that the parties rejected a clause which was directed to a comparison with "any part or all" of the Event (cf Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 at 352-3 per Mason J). 97The events about which Trackcorp complain are not said to be the same as the Event as negotiated by both parties; they are said to be substantially similar to the Event as negotiated by both parties. Nevertheless, the whole of clause 3.4 must be kept in mind. 98It is necessary to construe the language used by the parties in the context in which it appears. Here, the words "substantially similar to" are used in conjunction with "the same as". In my view, the words "substantially similar to", as used in clause 3.4 of the Agreement, ought be construed as meaning in substance similar to albeit not the same as the Event as negotiated by both parties. I consider that when the words are read in the context of clause 3.4 and the Agreement as a whole, the degree of similarity called for should be regarded as considerable or large (see Dowling v Dalgety Australia Ltd (1992) 34 FCR 109 at 138-139 per Lockhart J). A comparison between two events, each viewed as a whole, is called for. The question then is whether the events, so viewed, are in substance similar to albeit not the same as each other. It is not enough that there are similarities between the events, or even that the similarities themselves might be described as being substantial or of substance. 99Trackcorp's submissions in this context placed some emphasis on the stated aims of Trackcorp in holding the Event. Reference was made to the opening sentence of the Schedule of Activities which is in the following terms: "The aim of the event is to give experienced club competitors and motor sport enthusiasts the opportunity to receive expert instruction from well-known and respected race champions and then drive on the full Mount Panorama Circuit." 100Reference was also made to the business plan which Trackcorp provided to the Council. This plan included references to the event being one which "directly targets the club level competitor", and stated that due to its very nature being "a full circuit event at Mount Panorama that is not a race and is open to L2S licence holders", it had a point of difference, it catered to as wide an audience as possible, and it maintained a certain sense of unattainability or exclusivity. 101Trackcorp's submissions were formulated in various ways, but its essential position was that clause 3.4 prevented the Council from permitting another promoter to hold a non-racing event at the circuit which was open to the holders of L2S licences, yet the Council did just that in permitting FOSC and later Yeehah to conduct regularity events. It was put that the FOSC and Yeehah events were substantially similar to the Event as negotiated by both parties within clause 3.4 because "an essential aspect of each of them was that it provided an opportunity for non-expert drivers in unmodified vehicles to compete on the Mount Panorama track", and that there is an obvious similarity between supersprints and regularity events. 102The Council submitted that there was no breach of clause 3.4 in circumstances where the FOSC and Yeehah events were mainly racing events, and no part of Trackcorp's event involved either racing events or indeed regularity events. Reference was also made to Mr Chopping's evidence to the effect that it was not uncommon for club level race meetings to have regularity events included in the programme. 103Insofar as the material in the business plan is concerned, it was put by the Council that such material (e.g. that Trackcorp's event was open to L2S licence holders) does not so much describe the event itself as indicate why Trackcorp thought the event would attract interest amongst members of car clubs. 104It is clear that FOSC was granted the right by the Council to conduct events at the circuit over Easter in 2008, 2009 and 2010, and Yeehah was granted the right by the Council to conduct events at the circuit over Easter in 2011 and 2012. No point was raised that the grant of the right to conduct the 2008 event may have occurred prior to the making of the Agreement between the Council and Trackcorp. Moreover, it may be accepted (leaving aside the allegedly de facto supersprints conducted by FOSC in 2010) that the events which were in fact conducted by those promoters were permitted by the Council. The Council did not contend to the contrary. The Council may be taken (whether pursuant to the signed agreements with the promoters, or pursuant to variations of such agreements) to have granted those promoters the right to conduct those events. Accordingly, it is necessary to compare those events with "the Event as negotiated by both parties" within the meaning of clause 3.4. 105The Event as negotiated by both parties is primarily described in the Schedule of Activities attached to the Agreement. It describes a five day event broken into two components, driveBathurst (two days) and sprintBathurst (three days). Drivers could participate in either or both components. The first component is an "untimed and non-competitive event" where the focus is upon participants obtaining professional instruction on how to drive the circuit, and the opportunity to do so at speed. The focus of the second component is upon supersprints. It involves circuit orientation, training sessions and speed-limited practice sessions on the first day, timed practice sessions on the second day, then full supersprint events on the final day. Both components of the Event were to be supplemented by Hot Laps sessions. It may be accepted that the Event, so comprised, was, as stated by Trackcorp, aimed at club level competitors including the holders of L2S licences. 106The FOSC event is described in the Schedule of Activities attached to the track hire agreement entered into between the Council and FOSC in 2008. It is a seven day event. It also consists of two components. The first component, which occupies three of the days, is stated to be for car clubs and their associates and is broadly described as an event which promotes club level racing and the development of driver skills, and the opportunity for club members to race on the Mount Panorama circuit under full racing conditions. It was also envisaged that the event would involve car clubs mounting displays of their cars. The second component, which occupies the other four days, involves the major sponsor of the event, Mercedes-Benz, conducting various promotional activities, including driving and safety programmes. This second component was not run in either 2009 or 2010. 107The Yeehah event, as described in the agreement between the Council and Yeehah dated 20 April 2011, was an event comprising various racing events (other than endurance racing) in a programme of races approved by a Management Committee, and "such other activities ancillary to motor sport" as may be approved by the Management Committee. The programmes for the Yeehah events of 2011 and 2012 (which I infer were approved by the Management Committee) provide for a four day event in 2011 and a three day event in 2012. In each year, numerous racing events were to be held over a three day period, and a number of regularity events were scheduled to occur on those days as well. In 2011, the fourth day was devoted to Hot Laps activities. 108Trackcorp's central complaint is that the FOSC and Yeehah events included regularity events, which, like supersprints, are not classified as races, and are open to the holders of L2S licences driving vehicles which do not have to be heavily modified. I have referred earlier in these reasons to the evidence which shows the extent to which regularity events formed part of the FOSC and Yeehah events (see paragraphs 69, 71, 81, 88 and 89 above). 109Between 2008 and 2010, the number of regularity events, and the proportion of the FOSC event which consisted of regularity events, increased. In 2010, approximately one quarter of the events in "The Way It Was" section were regularity events, and all of the "Regularity Festival" section was to consist of regularity events. Viewed broadly, more than half of the 2010 event consisted of regularity events. The earlier FOSC events and the Yeehah events of 2011 and 2012 had a much smaller regularity component. 110The question of breach of clause 3.4 may thus be tested first by reference to the FOSC event of 2010. 111This event (as sanctioned by the Council) involved both racing and non-racing events. Trackcorp's event does not involve any racing events. Its competitive events are all supersprints which are classified, not as races, but as speed events. The non-racing events at the FOSC 2010 event made up about five eighths of the total programme. These were all regularity events which are not classified as speed events. Trackcorp's event does not involve any regularity events. Trackcorp's event includes Hot Lap activities but no Hot Laps activities were included in the FOSC 2010 event. No events or activities on the programme for the FOSC 2010 event appear to be of the kinds which make up Trackcorp's driveBathurst component. 112The similarity between the FOSC event of 2010 and Trackcorp's event lies in the similarities between regularity events and supersprints. Whilst the type of competition is different, with supersprints focusing upon the fastest lap time and regularity focusing upon consistency of lap time, both types of events are open to the holders of L2S licences, and the cars which participate in such events do not need to be modified to the extent that cars participating in race events have to be. There is also some scope for a competitor in a regularity event to nominate a low lap time so that there is little practical difference between attempting to consistently meet that time and driving the car as fast as possible around the circuit. These matters were essentially accepted by Mr Chopping in his evidence, although he maintained that the nomination of such low lap times might not be acceptable to the officials running a properly organised regularity event. 113Both events comprise a number of different motor sport activities which are to take place over a number of days. None of the activities which comprise the Event as negotiated by both parties are found within the FOSC event of 2010. However, each event has, as an important part of its programme, a type of motor sport competition which bears some similarity to a motor sport activity which forms an important part of the other event. 114There is a limited similarity between supersprints and regularity events insofar as competitors in a regularity event might be able to drive much as they might in a supersprint. However, that is not the true aim of a regularity event and, as Mr Chopping stated, such a competitor would run the risk of falling foul of the event officials. 115The main similarity between supersprints and regularity events lies in the fact that they both hold an appeal to holders of L2S licences and provide an opportunity for such holders to participate in non-racing motor sport competition involving driving around the circuit at speed. 116It seems to me that when the two events are each viewed as a whole, and thus compared, the degree of similarity between them is not sufficient for the FOSC event of 2010 to be regarded as substantially similar to "the Event as negotiated by both parties" within the meaning of clause 3.4 of the Agreement. 117The points of difference between the two events, as described above, are significant. Not one type of competitive motor sport is common to both. Only Trackcorp's event contains a component (indeed an important component) devoted to events of an "untimed and non-competitive" nature, and only Trackcorp's event offers Hot Lap activities. An important part of the FOSC event of 2010 concerns racing events which are not featured at all in Trackcorp's event. Each event, viewed as a whole, has a distinctive composition and character. As a matter of substance, they are quite different. It is true that important parts of the programmes of both events appeal to an identifiable segment of consumers, namely, the holders of L2S licences. However, that similarity has to be seen in the context of the events viewed as a whole. I do not accept Trackcorp's submission that clause 3.4 was breached because it was an essential aspect of each event that it provided an opportunity for non-expert drivers in unmodified vehicles to compete on the Mount Panorama circuit. When the events as a whole are compared, the degree of similarity which is called for by clause 3.4 is not demonstrated. 118It follows that I do not think that the Council, by giving FOSC the right to conduct its event in 2010, and a fortiori the right to conduct its events in 2008 and 2009, was in breach of clause 3.4. 119The Yeehah events included a regularity component which was much smaller than that contained in the FOSC event of 2010. The Yeehah event of 2011 did, however, include a day of Hot Laps activities. Such activities also formed part of Trackcorp's event. Trackcorp, in its submissions, did not specifically raise this as a similarity to be considered. The focus of the complaint was upon the regularity aspect of the Yeehah events, and the fact that such regularity events are open to the holders of L2S licences. Of course, the customers of a Hot Laps experience do not require any licence. They are merely passengers. 120In any case, a comparison between the 2011 Yeehah event and "the event as negotiated by both parties" does not lead me to conclude that the two events are substantially similar within the meaning of clause 3.4. The Yeehah event predominantly consisted of racing events, although more than one quarter of the events are regularity events. Again, even allowing for the similarities which exist as a result of the regularity aspect, and the offering of Hot Laps, the events have a quite distinctive composition and character, and I do not think that the degree of similarity called for by clause 3.4 is shown. The position is a fortiori the 2012 Yeehah event which did not include any Hot Laps. 121For these reasons, Trackcorp's case concerning breach of clause 3.4 of the Agreement fails. 122Trackcorp also pleaded the existence of certain implied terms, including terms obliging the Council to monitor events staged at the circuit by other promoters, to ensure that Trackcorp's rights under clause 3.4 were protected, and to ensure that any events were conducted in accordance with relevant requirements such as those imposed by CAMS. The implied terms case was not addressed in Trackcorp's final submissions. It seems to me that the alleged terms, which would require the Council to ensure that certain things occurred or did not occur, would not be implied in the Agreement. Moreover, to the extent that any implied terms may have required the Council to monitor events, there was evidence given by the circuit manager, Mr Rayner, on that topic. This evidence, which was not challenged, included that, as part of his role, he checks that promoters are complying with the permits under which the events are held, and further, that to his observation the 2010 FOSC event was conducted in accordance with the approved programme. Trackcorp has failed in my view to establish that the Council has breached any implied term of the Agreement. 123Before leaving this topic, I should record that even if I am wrong in my conclusion that the Council, by permitting the FOSC and Yeehah events that involved regularity events, did not breach of the Agreement, I do not think that Trackcorp proved that it suffered a loss as a result. 124Trackcorp's case on damages was essentially to the effect that after its 2008 event, it lost revenue due to the FOSC and Yeehah events. There was evidence that Trackcorp had fewer customers in 2009, 2010 and 2011 as compared to 2008, even though it marketed and ran its event in basically the same way, and well, each year. There was also evidence given by Mr Jellins to the effect that the ticket prices for the Trackcorp event were not increased in 2009, and were reduced in 2010 and 2011, because he believed that the Trackcorp event was losing customers to the FOSC and Yeehah events (which charged lower ticket prices). 125Calculations (which were agreed by the two accounting experts called in relation to quantum issues) of foregone net revenue were performed on two bases, both of which assumed that the lower number of customers after 2008 was the result of breach of the Agreement. The first calculation ($803,844) assumed that the prices in 2009-2011 were the 2008 prices adjusted for inflation. (If no inflation adjustment is made, the figure becomes $702,302). The second calculation ($533,056) assumed that the prices in 2009-2011 were the actual prices charged in those years. 126No evidence was adduced from any witness with expertise in relation to the market in which the events compete. There was no analysis of the attributes of the market (including as to prices), or the position of the respective events in the market. There was no analysis of the likely causes of the fall in the number of Trackcorp's customers since 2008, and the extent to which such fall was likely caused by any particular attributes of the FOSC and/or Yeehah events. There was no evidence adduced concerning customer behaviour or attitudes, whether of customers who actually participated in one or more of the Trackcorp, FOSC and/or Yeehah events, or of customers more generally in the market. 127I was invited to find, based on the evidence that Trackcorp's event was conducted in the same way, and well, each year, and the further evidence of Mr Jellins concerning ticket prices, that apart from the FOSC and Yeehah events, there were no other extraneous factors that might explain the lower numbers of customers in 2009-2011. 128The Council submitted that Trackcorp had failed to establish that the FOSC and Yeehah events were the only things that had changed, and that those events caused the drop-off in customer numbers. Reference was made to the evidence of Mr Chopping to the effect that after 2009 there was a reduction (in NSW and most of the other states) in the numbers of people who held L2S licences. It was also said that the Court could take note of the likely effects of what is generally referred to as the Global Financial Crisis, which commenced to have a significant effect on the Australian economy from late 2008. Finally, reference was made to some analysis of data concerning the competitors in the various events in the period 2008-2011 which, it was submitted, did not support Trackcorp's case on causation. 129Had I concluded that Trackcorp had made out its case that the FOSC and Yeehah events were substantially similar to the Trackcorp event because of the inclusion in them of regularity events, I would not have been satisfied on the evidence that the inclusion of those events was a cause of the lower numbers of Trackcorp customers after 2008, whether in whole or in part. In my view, the evidence does not provide a sufficient basis upon which to conclude that any reduction in customer numbers was a result of the regularity events conducted by FOSC and Yeehah. It is far from self evident that the holding of regularity events by FOSC and Yeehah would significantly impact upon ticket sales for Trackcorp's event. There was evidence, for example, that Trackcorp's event, which did not involve any regularity events, was priced at a much higher level than the FOSC event. The absence of any evidence concerning the market and its participants leaves the Court in a position where any conclusions as to the extent to which the regularity events affected the numbers of customers attending Trackcorp's event would have to be based largely on speculation. In those circumstances, I would not have been prepared to conclude that Trackcorp had established that it had suffered any loss as claimed. Negligence 130It is convenient to next deal with Trackcorp's claim that the Council is liable to it in negligence. It is pleaded that the Council was in breach of a duty of care owed to Trackcorp in: (a)permitting FOSC and Yeehah to conduct events which included regularity events (and in 2010 de facto supersprints); (b)allowing those promoters to pay track hire fees lower than Trackcorp had to pay; and (c)in applying different resident access requirements in respect of their events. 131The alleged breaches concerning track hire fees and resident access requirements were not referred to in Trackcorp's closing submissions. In those submissions, Trackcorp acknowledged that, ordinarily, the imposition of a duty of care between two contracting parties "would be unavailable as a matter of legal principle". Reference was made to the observations of Emmett J (as his Honour then was) in McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2; (2008) 165 FCR 230 at [66] where his Honour stated: "There is no reason for the law to impose a duty on one of two contracting parties to act in the interests of the other party in relation to a matter that the parties have not by express conduct or necessary implication included into the terms of their contractual relationship. While vulnerability is an important requirement in cases where a duty of care to avoid economic loss arises, vulnerability in that context is not to be understood as meaning only that the claimant was likely to suffer damage if reasonable care was not taken. Rather, vulnerability is to be understood as a reference to the claimants' inability to protect itself from the consequences of a wrongdoer's want of reasonable care, either entirely or at least in a way that would cast consequences of loss on the wrongdoer (see Woolcock Street Investments Pty Ltd v CDJ Pty Ltd (2004) 216 CLR 515 at [22] and [23])." 132Trackcorp submitted that there were peculiar facts present in this case which mean that the imposition of a duty of care is appropriate. Trackcorp advanced the following matters: (a)the Council is the owner and controller of the circuit; (b)the Council made a promise under clause 3.4 of the Agreement not to grant any other promoter the right to conduct an event which was substantially similar to Trackcorp's event; (c)only the Council had the ability to preserve the exclusivity granted by clause 3.4; (d)care would need to be taken by the Council to ensure that other events did not cause a breach of clause 3.4; (e)Trackcorp had no ability to protect itself from the consequences of other promoters conducting events which were within Trackcorp's area of exclusivity; (f)even though Trackcorp could seek relief against the Council under the Agreement in respect of such events, Trackcorp remained vulnerable in the absence of a duty of care; and (g)if Trackcorp had direct recourse against the promoters of such events, it would likely obtain injunctive relief because it is doubtful whether damages would be an adequate remedy. 133Trackcorp submitted that in these circumstances, it was not enough that the Council made the promise in clause 3.4 to safeguard Trackcorp's exclusivity. It submitted that the Council was under a duty to vigilantly exercise control over the promoters of other events, and the manner in which they conducted their events, so that the exclusivity provision was "meaningful". 134In my view, no such duty should be found to exist. It may be accepted that if the Council grants another promoter the right to conduct an event that is substantially similar to Trackcorp's event ("the Event as negotiated by both parties") then Trackcorp may suffer economic loss. In addition, the Council is in control of what rights it grants to conduct events at the circuit and has at least some ability to monitor events at the circuit to see if they are being conducted in accordance with the permission granted. Further, unlike the Council, Trackcorp is not in a position to take action directly against another promoter conducting an event which is substantially similar to Trackcorp's event. Trackcorp is restricted to action under its contract with the Council. 135Trackcorp is in a sense vulnerable to harm if the Council either grants another promoter the right to conduct an event that is substantially similar to Trackcorp's event, or fails to monitor events and take action if they are being conducted otherwise than in accordance with the permission granted. However, when all relevant circumstances are considered (as to which see Caltex Refineries (Qld) Pty Ltd v Stavar (2009) 75 NSWLR 649; [2009] NSWCA 258 at [102]-[104] per Allsop P (as his Honour then was)), I do not think that the imposition of any duty of care as contended for by Trackcorp is warranted. 136The relationship between Trackcorp and the Council is contractual. The parties freely bargained for the terms contained in the Agreement, including the exclusivity provision found in clause 3.4. The vulnerability which Trackcorp points to has to be considered in this contractual context. Trackcorp is vulnerable to harm if the Council breaches clause 3.4. However, in that circumstance, Trackcorp has a remedy in damages under the contract to compensate it for the suffering of such harm. 137Trackcorp is also vulnerable to harm if Trackcorp fails to take action to ensure that other promoters conduct their events in accordance with the permission granted to them. Questions could conceivably arise as to whether such a failure itself constitutes a breach of clause 3.4 by amounting to the grant of a right to conduct an event which is substantially similar to Trackcorp's event, or possibly constitutes a breach of an implied term. If it was a breach of the Agreement then Trackcorp would have a remedy in damages. If such a failure was not a breach of the Agreement, Trackcorp would have no remedy, but this is the result of the limited scope of the Council's contractual obligations. That scope is the outcome of the negotiations leading up to the making of the Agreement. It is the product of the free pursuit by the parties of their own interests. 138To impose a duty of care as contended for by Trackcorp would effectively introduce a new obligation which could have been, but was not, bargained for by the parties. The duty of care contended for would give rise to uncertainty. That is exemplified by the submission that the duty was required so that the exclusivity provision would be "meaningful". In my view, it would be quite undesirable for such a duty to be imposed. 139Insofar as Trackcorp still presses for a duty of care which would prevent the Council from allowing other promoters a lower track hire fee, or applying different resident access requirements to such promoters, a similar analysis may be applied. The issue of the track hire fee payable by Trackcorp was dealt with in the Agreement. It was open to the parties to supplement that provision by including a stipulation concerning the track hire fees to be paid by Trackcorp's competitors, but that did not occur. 140Similarly, issues concerning the residents who live around the circuit were dealt with in the Agreement (see clauses 4.1.4 and 4.3.2) and it was open to the parties to supplement those provisions had they wished to do so. 141Even if there was a duty of care as contended for by Trackcorp, the Council did not (whether carelessly or otherwise) breach clause 3.4 by permitting the FOSC and Yeehah events, which included regularity events. That is so whether or not the holding of regularity events was in accordance with the permissions granted to those promoters. (I note, in passing, that Mr Chopping gave evidence that it was not uncommon for club level race meetings to have regularity events in the programme. I would not therefore conclude that the inclusion of such events in an event described as a club level racing event would be to go beyond the concept of a club level racing event). Moreover, insofar as the duty would require the Council to monitor events to ensure that they were conducted in accordance with the permission granted, no breach has been established. In this regard, I refer again to the unchallenged evidence of Mr Rayner concerning the Council's monitoring of events at the circuit. The meetings held on 3 May 2007 and 17 October 2007 142It is necessary to consider the meetings of 3 May 2007 and 17 October 2007 before turning to Trackcorp's claims for rectification of the Agreement, and Trackcorp's allegations that the Council engaged in misleading or deceptive conduct. 3 May 2007 meeting 143As noted earlier, this meeting was attended by Mr Jellins, Ms Jones and Ms Iddon from Trackcorp, and Messrs Heath and Rollin from the Council. The meeting was held in Mr Heath's office initially, but was then continued over lunch at a nearby restaurant. The critical conversations occurred over the lunch segment of the meeting. The conversations of most relevance here concern the topics of track hire fees and the extent to which the Trackcop event might be protected from competition from other events. 144Dealing first with the topic of track hire fees, Mr Jellins deposes that he stated that Trackcorp could only justify a track hire fee of over $50,000 per day "if no other party pays less than us for circuit hire", to which Mr Heath responded by saying "I can assure you that the circuit hire fee is non-negotiable and that no one will pay less than you". 145Mr Jellins' account is repeated, in very similar terms, in Ms Iddon's affidavit. She adds that Mr Heath also stated that "the two other events we already have are actually paying a lot more; the V8 Supercars for example is well over a million dollars". Ms Jones also gives a smilar account. She deposes that Mr Heath responded to Mr Jellins with: "The fee for track hire is fixed. No one will pay less than you." 146Mr Heath deposed that, after explaining that the relatively high level of track hire fees was due to various factors (such as the costs of making the circuit ready for a motor sport event and then returning it to its normal use as a road open to the public), he said that the fees were set by resolution of the Council. Mr Heath further deposes that Mr Jellins said something to the effect of not wanting to pay the "rack rate" if he was going to have an event over a number of years, to which he responded by saying that "the rate was set by Council and that is the rate that everybody gets." 147Mr Rollin, who conceded that his recollection of the meeting was "limited in terms of recalling specific particulars", deposes that he did not recall Mr Heath saying that the circuit hire fee was not negotiable and that no one would pay less than Trackcorp. Mr Rollin also said that he did not recall Mr Heath making the further statements, referred to by Ms Iddon, about the fees charged for other events. 148On the topic of competition, Mr Jellins deposes that Mr Heath emphasised the importance to the Council of each event taking place at the circuit being "unique", and that after reference was made to the Bathurst 1000, the Bathurst 12 hour, and the historic race meeting which was then being proposed by Mr Jardine of FOSC, Mr Jellins told Mr Heath that Trackcorp's event would be unique because it would be the only one which is a non-racing event. 149Ms Iddon deposes that Mr Heath's statement about the need for events to be unique was preceded by a statement of Mr Jellins to the effect that Trackcorp wanted to protect its target market and would find it unacceptable if Trackcorp's event was able to be copied or discounted by another event promoter. Moreover, Ms Iddon says that Mr Heath said "no other party will be permitted by us to conduct an event such as yours." 150Ms Jones deposes that Mr Heath said that Council's position was that each event at the circuit must be sufficiently different so that events do not compete with each other, and then gave an assurance that no other event would be allowed to compete with Trackcorp's event or offer any similar experience. 151Mr Heath did not refer to this topic in the account of the meeting given in his affidavit. In cross-examination, he said that he had no recollection of Mr Jellins saying that the Trackcorp event would be unique because it would be the only non-racing event. Mr Heath accepted, however, that it was an objective of the Council to have events that were unique in their style. 152Mr Rollin said that he had no recollection of Mr Heath saying words to the effect that no other event would be allowed to compete with Trackcorp's event or offer any similar experience. 153The meeting took place more than five years before the swearing of the affidavits by Mr Jellins, Ms Jones and Ms Iddon. (Mr Jellins and Ms Iddon swore affidavits in March 2010 in support of the claim for interlocutory relief, but these affidavits were not comprehensive). Even further time elapsed before affidavits were sworn by the Council officers. There are no notes of the meeting in evidence, and the emails which were exchanged on the day after the meeting throw only a little light upon the detail of the discussions. In these circumstances, some caution is called for in assessing the accounts. The risk that such accounts, given many years later by parties to a dispute, may be inaccurate and to some extent the product of a reconstruction of events, is well known. 154In addition to those general observations, I have some particular reservations concerning the evidence given by Trackcorp's witnesses which lead me to conclude that their accounts of the meeting of 3 May 2007 (and the meetings of 17 October 2007) include a significant element of reconstruction. 155The first reservation arises from the close similarity which the accounts given in their affidavits bear to each other, despite the length of time which has elapsed between the meetings and the swearing of the affidavits. I do not think that those similarities are the product of any deliberate tailoring of evidence. However, I think it likely that the similarities are to some extent the product of the fact in the period from 2008, during which the relationship between Trackcorp and the Council became marked by serious and on-going conflict, there would have been numerous occasions when the issues, including the events of the meetings, were discussed amongst Mr Jellins, Ms Iddon and Ms Jones. 156The second reservation arises from the lack of corroboration of their accounts in the written communications which passed between the parties during the course of the negotiations for the Agreement. For example, there is no support in the contemporaneous documents for the suggestion that Council officers gave an assurance that no one would pay less than Trackcorp to hire the circuit. 157The third reservation arises from the evidence given by each of Mr Jellins, Ms Jones and Ms Iddon on the question whether there were in fact negotiations with the Council concerning track hire fees in 2007 and 2008. In both of those years there were discussions between the parties about the level of the fee, and in both of those years, there was a reduction in the fee from the amount the Council was initially pressing for. Despite that, each of the Trackcorp witnesses was emphatic in refusing to concede that any negotiations took place concerning the fee. This stance may have been taken because any such concession was seen to be damaging to Trackcorp's case that it had been told that track hire fees were not negotiable and that no one would pay less than Trackcorp to hire the circuit. Whether that is the reason or not, this aspect of the evidence gave rise to disquiet about the general reliability of the evidence given by the Trackcorp witnesses. 158I am prepared to accept that in the course of a discussion about track hire fees, Mr Heath, as he himself accepts, said something to the effect that the rate of track hire fee was set by the Council and is what everybody gets. However, I am not satisfied that Mr Heath went further and described the fee as fixed or non-negotiable, or gave an assurance that no other promoter would pay less than Trackcorp to hire the circuit. 159The statements made by Mr Heath have to be viewed in the light of the information that he sent to Mr Jellins on 2 April 2007. That information included statements that the fees and charges detailed in the attached documents had not yet been formally approved, but should be close to the final numbers. The attached documents referred to a "negotiated fee" which was currently $258,000 as resolved by the Council in 2005, and subject to CPI adjustment. On another of the attached documents, the words "actual fees on negotiation" appear next to the item "Full Circuit Closure". It is unlikely, given those statements, that Mr Heath would have said that the track hire fees (albeit that they were set or formally approved by the Council), were in fact not negotiable. 160I also consider it unlikely that Mr Heath would have offered an assurance to the effect that no one would pay less than Trackcorp to hire the circuit. Mr Heath, in his affidavit, denied knowingly giving such an assurance, although he appeared to concede at one point in his cross-examination that, in saying "that is what everybody gets", he intended to convey that no one else would pay less than Trackcorp. Despite that answer, I am not satisfied that Mr Heath gave any assurance in terms to the effect that no one would pay less than Trackcorp to hire the circuit. The Council was, at that time, in negotiations with FOSC. Mr Heath was aware of that. An assurance given to Trackcorp as suggested would have the potential to complicate those negotiations, and undercut the ability of the Council to maximise its revenue from events at the circuit. It was Mr Heath's role to attempt to secure two new events for the circuit. It was his understanding that in the negotiations for the two events, the starting point was the schedule of fees as adopted by the Council (which was subject to CPI adjustment), and that any reduction would need Mr Sherley's specific approval. In these circumstances, Mr Heath is likely to have been somewhat circumspect on the question of track hire fees. Finally, as noted above, there is nothing in the subsequent written communications between Trackcorp and the Council in the course of the negotiations, including in relation to the very question of track hire fees, which suggests that any assurance, as alleged, was given by Mr Heath. 161I accept that there was discussion at the meeting about the nature of Trackcorp's event in relation to other events to be held at the circuit. This was a matter of interest to both parties. The topic was likely raised by Mr Jellins who, along with Ms Jones, had come up with a concept of a new event, and had a strong interest in seeking to ensure that the concept remained with Trackcorp alone. There was, in my view, probably some discussion about Trackcorp wanting some protection on that score. 162I regard it as likely that, in that context, Mr Heath said words to the effect that the Council wanted each of the events at the circuit to be unique. That was Mr Heath's understanding of what the Council wanted. I also think it likely that Mr Jellins said that the Trackcorp event was a non-racing event, and was unique in that respect. 163However, I am not satisfied that the discussion on this matter was anything other than very general in its terms. I accept that Mr Heath may have made broad statements to the effect that the Council would be prepared to agree that no other promoter be permitted to conduct an event "such as yours". Nevertheless, I do not accept that Mr Heath made any clear statement concerning the extent to which Trackcorp would be given any exclusive rights in relation to the proposed event. This is borne out by the email Mr Jellins sent to Mr Heath on the following day, which contains the following: "Naturally, we would also be looking for some comfort and protection in terms of keeping our event unique in the Bathurst calendar." 17 October 2007 meetings 164On 17 October 2007, Mr Jellins, Ms Jones and Ms Iddon went to Bathurst for a further meeting with Mr Heath. By that stage, negotiations were reasonably advanced on the terms of an agreement, although a number of issues remained unresolved, including the scope of the exclusivity clause. However, the amount of the track hire fee had seemingly been settled on the day before at $247,178 for Year 1 (to be adjusted in accordance with the CPI for the other four years), subject to confirmation by the Council that the amount was inclusive of GST. 165It was evident that, by this time, the Council was concerned to see the agreement finalised. Mr Heath had stated in his email to Mr Jellins on 12 October 2007 that unless the transaction was completed by 17 October 2007, the event would be cancelled. 166Mr Jellins deposes that in the meeting with Mr Heath on 17 October 2007, he told him that there were two matters of concern. First, it was important to Trackcorp that it be the only motor sport event catering to CAMS L2S licence holders and authorised to conduct non-racing activities. Secondly, it was important that Trackcorp did not pay more for hire of the circuit than anyone else. Mr Jellins says that Mr Heath told him that the Council would ensure that each of the events at the circuit would be unique and that "no other parties would be authorised to conduct an event such as yours, catering to CAMS L2S licence holders", and further gave an assurance that "no one would pay less than what we are asking you to pay." 167Mr Jellins further states that at the conclusion of the meeting, Mr Heath took the Trackcorp representatives to Mr Sherley's office and introduced him to them. Mr Jellins says that he then raised his two concerns with Mr Sherley who said: "Don't worry. We will make sure that your event is unique. You won't pay more for circuit hire than anyone else." 168Ms Iddon deposes that Mr Jellins raised two fundamental issues with Mr Heath in their meeting. The first was that the Trackcorp event be unique and must not be able to be copied by another promoter, and that it was essential that Trackcorp be the only event catering to CAMS L2S licence holders. The second was that the playing field must be level in relation to fees and charges, and no one else can pay less than the track hire fee Trackcorp was being asked to pay. 169Ms Iddon states that Mr Heath said that he had explained that Council's policy was that every event must be unique, that its fees are clearly stated upfront and are not negotiable, and that no one would pay less than Trackcorp. 170In relation to the meeting involving Mr Sherley, Ms Iddon deposes that Mr Jellins raised two concerns with Mr Sherley. These were, in essence, that no other promoter be allowed to conduct an event that copies Trackcorp's event or infringes on its market, and that no other promoter can pay less for track hire than the amount that Council was asking Trackcorp to pay. Ms Iddon says that Mr Sherley then said that Council would ensure that Trackcorp's event is unique, that it required all events to be fundamentally different as "we don't want them competing with each other", and that "we are not asking you to pay any more than anyone else". 171Ms Jones gives evidence to a similar effect. She deposes that in the first meeting, Mr Heath said that because the Council makes sure each event is unique, the Trackcorp event can't be copied, and that no one else will pay less than Trackcorp for track hire. Ms Jones deposes that in the later meeting, Mr Sherley gave an assurance that the Trackcorp event would be unique and that Council would make sure it wasn't copied, and that Trackcorp would not pay any more than anyone else for hire of the track. 172Mr Heath does not deal specifically with the detail of the 17 October 2007 meetings in his affidavit. He does, however, deny that he ever knowingly gave any assurance that no other events catering to the holders of L2S licences would be permitted. He says that to the best of his recollection he was not asked for any such assurance. He further denies that he ever knowingly gave an assurance to the effect that no one would pay less than Trackcorp to hire the circuit. Mr Heath recalls that the amount of the track hire fee had been resolved, and was not the subject of further discussion on 17 October 2007. 173Mr Sherley says that the meeting with him involved some additional negotiations towards finalisation of the agreement. Mr Sherley says that he was led to believe by Messrs Heath and Jellins that the outstanding terms had been resolved subject to certain drafting matters. He says that, in those circumstances, it was agreed that Trackcorp could pay a 50% deposit which would be refundable if the agreement was not executed within seven days. 174Mr Sherley denies saying that the Council would make sure that Trackcorp's event was unique or that Trackcorp would be the only promoter able to conduct an event targeted at L2S licence holders involving non-racing activities. He recalls saying words to the effect that "I accept that you need to have an event that stands in its own right and the agreement to settle that issue needs to occur in negotiations with [Mr Heath]". Mr Sherley further denies saying that Trackcorp would not pay more for circuit hire than anyone else. Mr Heath in effect denied that Mr Sherley made any such statements in his presence. 175Again, considering the length of time from 17 October 2007 until affidavits were sworn, and the fact that no notes of the meetings held on that day are in evidence, some caution is called for in assessing the accounts given of the meetings held on that day. I also have regard to the specific reservations outlined above concerning the evidence of the Trackcorp witnesses. 176I am unable to accept that conversations concerning the two issues of importance occurred in the terms deposed to by the Trackcorp witnesses. 177As to the first issue (that Trackcorp's event be unique and the only one to cater for L2S licence holders), the question of the scope of Trackcorp's exclusivity had been the subject of negotiations between Mr Jellins and Mr Heath. On 12 October 2007, Mr Heath had rejected a formulation of the exclusivity clause which had been proffered by Trackcorp, and on 16 October 2007, Mr Jellins had sent a revised draft agreement to Mr Heath which contained an amended exclusivity clause. This draft agreement was said by Mr Jellins to be his attempt at addressing Mr Heath's concerns with the earlier draft agreement which had included amendments made by Trackcorp's lawyer, Mr Clarke. 178The exclusivity clause in Mr Jellins' draft weakened the clause from Trackcorp's perspective by removing the words "any part or all of", and the words "This is an essential term". The clause was silent as to events which cater to L2S licence holders. I note, in passing, that it is odd that Mr Jellins would suggest a clause in that form if indeed it was a matter of importance that Trackcorp have exclusivity in respect of events which cater to L2S licence holders. 179It may be accepted that the form of the exclusivity clause remained unresolved as at 17 October 2007, and it is likely, in my view, that there was discussion between Mr Jellins and Mr Heath on that day concerning the exclusivity issue. It is likely that in the course of those discussions Mr Heath would have said words to the effect that the Council wanted all the events at the circuit to be unique or "fundamentally different" (the expression he used in his email to Mr Jellins on 12 October 2007). However, if it truly was a matter of importance to Trackcorp that it be the only promoter able to hold an event which catered to the holders of L2S licences, it is likely that Mr Jellins would have raised it specifically in the context of the form of the exclusivity clause. As an experienced businessman, and one who was closely involved in the negotiations with the Council, Mr Jellins must have appreciated that the question of what events other promoters would be permitted to conduct was the very thing with which the exclusivity clause was concerned. Yet, according to Mr Jellins (and also Ms Jones and Ms Iddon), the discussion occurred without specific reference to the clause. It should also be noted that on 17 October 2007, following his discussions with Mr Jellins, Mr Heath amended the then current form of exclusivity clause. The only change so made by Mr Heath was to add the words "as negotiated by both parties" at the end. Those words do not seem to me to be apt to deal with a concern expressed by Trackcorp that its event be the only one which caters to the holders of L2S licences. Yet Mr Jellins expressed no difficulty with it. 180It may well be the case that Mr Jellins mentioned the fact that Trackcorp's event catered to the holders of L2S licences. I am not satisfied, however, that Mr Jellins sought any assurance of exclusivity in those terms, or that any such assurance was given, either by Mr Heath or by Mr Sherley. 181I formed a favourable impression of Mr Heath. He gave his evidence carefully and appeared to be trying to honestly recall the events of 2007. Mr Heath's denials which, I note, leave open the possibility that he inadvertently gave the assurances alleged, were not challenged. He candidly conceded in cross-examination that he did not have much of a recollection of the meeting. Despite his poor recollection, which is quite understandable in the circumstances, I accept his denials. I also do not think that Mr Heath would have inadvertently given any assurance as to exclusivity as alleged. He was the Council officer primarily involved in the negotiations with Mr Jellins, and was aware of the issues involved. He had recently rebuffed a draft exclusivity clause, which had been suggested by Trackcorp, on the basis of its breadth and potential effect upon other events. 182I also formed a favourable impression of Mr Sherley. He was extensively cross-examined over a range of issues. He generally answered the questions directly, and appeared to be trying to do so honestly to the best of his recollection. I accept his denials that he gave any assurances to Trackcorp concerning the extent of exclusivity of its event. I further accept Mr Sherley's evidence that on 17 October 2007, he was led to understand by Messrs Heath and Jellins that, subject to some drafting issues, the outstanding issues had essentially been resolved. In those circumstances, Mr Sherley, who had previously insisted that the agreement be completed by 17 October 2007, failing which the event would be cancelled, agreed that Trackcorp could pay a 50% deposit, refundable in the event that the agreement was not executed within seven days. The issue of exclusivity had been the subject of negotiation between Mr Heath and Mr Jellins. Mr Sherley was aware that an exclusivity clause suggested by Trackcorp had been rejected, and that Trackcorp had recently submitted a revised clause. It is likely that Mr Sherley would, as far as possible, have left that matter, along with any other outstanding matters, to Mr Heath to sort out with Mr Jellins. 183The topic of exclusivity was probably raised in Mr Sherley's presence, but I am not satisfied that he was asked to give any assurance about it, and certainly no assurance to the effect that only Trackcorp would be allowed to conduct an event which catered to the holders of L2S licences. 184As to the second issue (that no one else would pay less than Trackcorp to hire the circuit) it is unlikely that Mr Jellins sought any assurance to that effect. If this matter was indeed a matter of real importance to Trackcorp, it is likely that Mr Jellins would have requested that a provision to that effect be inserted into the draft agreement. There is no evidence that he made any such request. 185Even if Mr Jellins had sought an assurance from Mr Heath and/or Mr Sherley that no one would pay less than Trackcorp to hire the circuit, I have little doubt that neither would have given such an assurance. The Council had recently entered into a Heads of Agreement with FOSC which proposed track hire fees which (for the first three years of a five year term), were less than the fees the Council was then asking Trackcorp to pay (in the first three years of its five year term). Both Mr Sherley and Mr Heath would have been aware of the terms of the FOSC Heads of Agreement. In those circumstances, it would have been quite wrong for either of them to give such an assurance. It would have been at the very least misleading, and probably dishonest, to do so. I do not think that either of them would have done so. I note that a submission was made by Trackcorp that Mr Heath gave such an assurance and was "simply lying" to Trackcorp. This suggestion, which was not put to him in cross-examination, must be rejected. 186In addition, there is no apparent reason why the Council would give such an assurance, which would only hamper it in its efforts to maximise revenue from the operations of the circuit. There was no suggestion that the Council was in any way anxious to secure the Trackcorp contract. In fact, the Council had made it clear that it was prepared to see the event cancelled if a satisfactory agreement could not be reached. 187For the above reasons, I am not persuaded that either Mr Heath or Mr Sherley made any of the assurances as alleged. I accept their denials in that regard. 188I am prepared to accept that there may have been some discussion about track hire fees at the meetings on 17 October 2007. However, I am not satisfied that those fees were described by Mr Heath as "not negotiable". The parties had just concluded a negotiation concerning the track hire fees (subject to confirmation of the GST issue) and, as earlier noted, the fees were described as negotiated fees on documents which had been sent to Trackcorp in April 2007 and in all drafts of the agreement (see clause 4.2.1). Indeed, the revised schedule of fees which Mr Heath attached to the draft agreement later on 17 October 2007 is headed "Schedule of Negotiated Fees". It is most unlikely that Mr Heath would have described the fees earlier that day as "not negotiable". It is likely, in my view, that the most Mr Heath may have said about the nature of track hire fees was that they were based upon fees that were set by the Council and were what "everybody gets". 189The above conclusions are reinforced to some degree by the terms of a draft email, prepared by Trackcorp's solicitor, Mr Clarke, in March 2008, less than five months after the 17 October 2007 meetings. Both Mr Jellins and Ms Iddon agreed that the draft email was prepared on their instructions and was consistent with those instructions. Mr Clarke had been acting for Trackcorp in the negotiations leading up to the agreement in 2007. 190The draft email dealt with two issues, namely, track hire fees and exclusivity. 191As to the former, it noted that the track hire fee for the forthcoming FOSC event was only $190,000. This was stated to be a concern as Trackcorp had entered into the contract with the Council "on an assurance from Council that it was charging Trackcorp standard pricing for track hire as per the schedule of charges submitted". It was further stated that Trackcorp had made it clear in the negotiations that it would only proceed if there was "a level playing field with its competitors as regards pricing". If Mr Heath or Mr Sherley had given an assurance that no one would pay less than Trackcorp to hire the circuit, an assurance in those terms would be expected to be recorded in the draft email. 192As to the latter, the draft email does not suggest that the contract had been entered into by Trackcorp based on any assurances given by the Council. Rather, the draft email refers to Trackcorp being "granted exclusivity" for its type of event. This was apparently a reference to clause 3.4 of the Agreement, the language of which is picked up later in the same paragraph of the draft email. It is clear that Trackcorp had a concern that the FOSC event was open to the holders of L2S licences. Again, if any assurance had been given that only Trackcorp would be allowed to conduct an event which catered to the holders of such licences, an assurance in those terms would be expected to be recorded in the draft email. 193Indeed, Mr Jellins, in the course of cross-examination concerning the draft email, apparently conceded that whilst Trackcorp had explained to the Council that Trackcorp's customers would have L2S licences, he didn't think that the Council "made promises that no one else would have level 2 speed licences". Rectification 194The rectification sought by Trackcorp concerns clause 3.4 of the Agreement. It is contended that the clause should be rectified so that it reads: "3.4 BRC agrees that during the term of this Agreement, the Promoter shall be the only event organiser/promoter to be granted the right to conduct any timed or untimed non-racing event at the Circuit and that BRC will not charge any other event organiser/promoter a lesser daily charge for track hire than that charged to the Promoter." 195Trackcorp claims that the clause so rectified would accord with the common intention of the parties in two respects. In essence, these are, first, that Trackcorp would have the exclusive right to conduct non-racing events at the circuit, and, second, that the Council would not charge any other promoter a daily track hire fee which is less than that which Trackcorp was bound to pay. This second aspect was not referred to in Trackcorp's closing submissions. 196Proof of each alleged common intention relies, inter alia, upon an acceptance that Mr Heath and/ or Mr Sherley gave assurances at the meetings on 3 May 2007 and 17 October 2007 concerning the exclusivity of Trackcorp's event, and the charging of track hire fees, as asserted by Mr Jellins, Ms Iddon and Ms Jones. The findings made above concerning those meetings mean that neither alleged common intention can be established, and the rectification case must fail at the outset. 197I should add that even if Messrs Heath and Sherley gave the assurances as alleged, it would not follow that the requisite common intention had been made out. Trackcorp submitted that this was a case where there was a common intention as to the true legal effect of the Agreement. Reference was made to Bush v National Australia Bank Ltd (1992) 35 NSWLR 390 at 407 and Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329 at 345. However, it was not put to either Mr Heath or Mr Sherley in cross-examination that, when the Agreement was entered into, they intended that clause 3.4 have the effect that no other promoter would be granted the right to conduct any timed or untimed non-racing event at the circuit. Neither was it put to either of them that, when the Agreement was entered into, they intended that the Agreement would provide that the Council would not charge any other promoter a daily track hire fee which was less than that which Trackcorp was bound to pay. Fair Trading Act Claims 198Trackcorp contends that the Council engaged in conduct which was misleading or deceptive or likely to mislead or deceive within the meaning of s 42 of the Fair Trading Act 1987 (NSW). The conduct complained of is said to comprise seven express representations and one implied representation. Some of the express representations are claimed to be representations with respect to future matters. 199The express representations are (with one exception) said to have been made at the meetings of 3 May 2007 and 17 October 2007 which are dealt with above. The findings which I have made about those meetings lead to the conclusion that many of the representations have not been established. I deal with each of the alleged representations in turn below. (a) That the track hire fee the Council proposed to charge was non-negotiable 200It is alleged that Mr Heath made this representation on 3 May 2007 and also on 17 October 2007. I have found that Mr Heath did not so describe the track hire fee on those occasions. It is also alleged that Mr Heath made the representation to Ms Iddon during a telephone conversation on 11 October 2007. I am not satisfied that he made the representation on that occasion either. It is unlikely that he would have used those words to describe the fee which was elsewhere referred to in documents as a negotiated fee. Further, according to Ms Iddon, in the very same conversation Mr Heath asked whether taking $30,000 off the track set-up costs would make Trackcorp happy. Mr Heath clearly understood that the fee was able to be negotiated, and his offer should have made that clear to Trackcorp. The making of this representation has not been established. (b) That no other hirer of the track would pay less than Trackcorp for track hire 201It is alleged that Mr Heath made this representation on 3 May 2007 and also on 17 October 2007. It is alleged that Mr Sherley made the representation on 17 October 2007. I have found that neither made the representation alleged. 202I have found that on 3 May 2007, Mr Heath said that the rate of track hire fees was set by the Council and is "what everybody gets". Mr Heath may have also said something similar on 17 October 2007. However, such statements do not in my view convey that no other hirer would pay less than Trackcorp. 203It is true that at one point in his cross-examination, Mr Heath apparently accepted that he had intended to convey that no one else would pay less than Trackcorp; but his subjective intention is not determinative. The statements must be assessed objectively in the light of the circumstances in which they were made. The statements were made in relation to the fees shown on the documents sent to Trackcorp in April 2007, and the documents which were later attached as schedules to draft agreements. In the information provided to Trackcorp in April 2007, and in clause 4.2.1 of all drafts of the Agreement, the fee is referred to as "a negotiated fee". By 17 October 2007, the parties had (contrary to the denials of the Trackcorp witnesses) in fact engaged in negotiation about the fees. It must have been plain that, even if the fees were set by the Council, there was at least some scope for negotiation about them. At least by that time, any statement that the fees are what "everybody gets" would be understood as conveying no more than that the rate set by the Council was what was offered to someone who wanted to hire the circuit. That would not preclude subsequent negotiations which may result in a lower fee being payable. In other words, the rate set by the Council was a standard fee offered, but not necessarily the fee that was payable. 204The making of this representation has not been established. (c) That the track hire fees charged by the Council could not be unbundled 205It is alleged that this representation was made in the email sent by Mr Heath to Mr Jellins on 12 October 2007. The email was Mr Heath's response to the draft agreement which had been forwarded to him by Mr Jellins on 11 October 2007. The email dealt with a number of points of concern, one of which was in relation to clause 4.2.1 and the attached Schedule of Fees. On that Schedule, all of the details which had appeared on the Schedule attached to the earlier draft had been crossed out. Those details comprised an itemised breakdown of the costs which were included in the total fee of $277,177.63. Mr Heath stated in his email: "Clause 4.2.1 Schedule of Fees. The Fees were not designed to be unbundled but provided that way so an understanding could be gained as to why the fees are of that magnitude as previously discussed. I will provide you with a new schedule format to avoid this potential confusion." 206This statement needs to be considered in the context in which it was made. On 10 October 2007, Mr Jellins sought clarification of the final costs. There followed various communications about the fee which might be payable if an agreement was entered into. In the course of those communications, Mr Heath conveyed an offer to reduce the fee of $277,177.63 by $30,000 in the first year, with years 2 to 5 being "at the scheduled rate which generally increases by CPI each year". Mr Jellins, in response, had said that Trackcorp's understanding was that the reduction discussed was due to an acknowledgement that Trackcorp would not be using all of the facilities at the circuit. Trackcorp's proposed clause 4.2.1 reflected that view. 207Mr Heath's subsequent statement that the fees "were not designed to be unbundled" seems to me to convey that the relevant fee was not intended by the Council to be the sum of a number of smaller items which would be charged only if applicable, but was, rather, the total fee. Mr Heath's email then goes onto explain that the itemised breakdown of the costs had been provided in order to gain an understanding of why the total fee is of the magnitude it is. 208Trackcorp submitted that Mr Heath's statement was misleading for two reasons. The first reason given was that, in accordance with Council's practice, there was in fact nothing to prevent the negotiation concerning track hire fees from extending to unbundling the fees. The second reason given was that the only ability of the Council to charge track hire fees was pursuant to Part 10 of Chapter 15 of the Local Government Act 1993 (NSW), the provisions which would, in effect, require the unbundling of the fees. 209As to the first reason, Mr Heath's statement was directed to whether the fees were "designed" to be unbundled. It was a statement about how the Council intended the fee to be viewed. It was not really a statement about any limit which might apply to the negotiations themselves. Insofar as the statement might be said to concern the negotiations themselves, it was in my view merely an expression of unwillingness on the part of the Council to unbundle the fees and negotiate on that basis. 210As to the second reason, it is not correct that the only ability of the Council to charge track hire fees was pursuant to Part 10 of Chapter 15 of the Local Government Act. My reasons for that conclusion are found later in these reasons at [279]. 211I therefore do not consider that Mr Heath's statement, made in the context of the negotiations about the track hire fee, was misleading or deceptive or likely to mislead or deceive. (d) That each of the possible five events at the circuit would be unique and have its own selling proposition, and, if not, the Council would not allow it to take place 212It is alleged that this representation was made by Mr Heath on 3 May 2007 and 17 October 2007, and also by Mr Sherley on 17 October 2007. I have found that it is likely that on 3 May 2007, Mr Heath said words to the effect that the Council wanted each of the events at the circuit to be unique. Further, Mr Heath's email to Mr Jellins of 12 October 2007 contained the statement that Mr Heath was "keen to have all events fundamentally different", and I think it is likely that he would have said similar words on 17 October 2007 in the course of the discussion concerning the exclusivity issue. As for Mr Sherley, I accept his denial that he said on 17 October 2007 that the Council would make sure that Trackcorp's event was unique. I accept his evidence that he said words to the effect that Trackcorp needed to have an event that stands in its own right. Further, I think it is likely that Mr Sherley also used words such as "quite distinctive" or "different" in the discussion about exclusivity held on 17 October 2007. 213Statements were made to the effect that the Council wanted all of the events at the circuit to be unique or fundamentally different. Those statements were true. Statements were also made, in the course of discussion concerning the exclusivity issue, about Trackcorp's event being fundamentally different or distinctive. Those statements must be understood as being concerned with the scope of the exclusivity clause which was then under discussion. Both parties must be taken to have understood that the extent to which Trackcorp would achieve exclusivity for its event would be determined by the terms of the exclusivity clause as ultimately agreed. 214I do not think that any of the statements made were misleading or deceptive or likely to mislead or deceive. I do not think that by making such statements the Council made any representation with respect to a future matter. The statements do not amount to representations as to what the Council would do in the future. (e) That Mr Jardine of FOSC was in negotiations with the Council concerning the running of an historic car race meeting 215It is alleged that this representation was made by Mr Heath during the 3 May 2007 meeting. I am prepared to accept that Mr Heath said something to that effect on that occasion. He does not dispute the evidence of the Trackcorp witnesses on this point, and Mr Heath was then in negotiations with Mr Jardine about a proposed event. 216Trackcorp, in its closing submissions, suggested by reference to documents (including an undated FOSC Business Plan and the description of the proposed FOSC event contained in the Council report of June 2007) that the statement was misleading because the negotiations with FOSC were about club level racing, not historic car racing. 217Mr Heath was asked, during cross-examination, whether Mr Jardine was proposing to put on some kind of historic car racing event. Mr Heath answered: "It was an event aimed at motor clubs and I guess it depends on your definition of 'historic'". 218It was not put to Mr Heath (by reference to the documents referred to by Trackcorp in its submissions, or otherwise) that the description "historic car race meeting" was in any way inaccurate or misleading. I am not prepared to conclude that any statement made by Mr Heath about FOSC running an historic car race meeting was misleading or deceptive, or likely to mislead or deceive. (f) That no other parties would be authorised to conduct an event such as that proposed by Trackcorp being non-race events for holders of L2S licences 219It is alleged that this representation was made by Mr Heath on 3 May 2007 and 17 October 2007, and by Mr Sherley on 17 October 2007. I have found that on 3 May 2007, Mr Heath may have made broad statements to the effect that the Council would be prepared to agree that no other promoter be permitted to conduct an event "such as yours", but I have not accepted that on 17 October 2007 any statements were made to the effect that Trackcorp would have exclusivity in relation to events which catered to the holders of L2S licences. 220The representation alleged has not been made out. Moreover, there was nothing misleading about a statement to the effect that the Council would be prepared to agree that no other promoter be permitted to hold an event such as Trackcorp's. Such a statement is no more than an expression of the willingness of Council to negotiate about that matter. (g) That resident access requirements for events conducted by Trackcorp would be the same as access requirements applying for other events at the track 221I accept that the topic of resident access breaks was raised by Mr Jellins in the meeting involving Mr Sherley on 17 October 2007. The evidence of Mr Jellins and Ms Iddon suggests that Mr Sherley said that the Council would only offer the residents the same access breaks they had in respect of the Bathurst 1000 and Bathurst 12 hour events. 222Mr Sherley says that he may well have said that, from Council's point of view, a resident access regime that was consistent across the various events was preferable. Mr Sherley also pointed to the fact that the permit for events issued by the Department of Sport and Recreation (under the Mount Panorama Motor Racing Act) was invariably conditioned upon affording reasonable access to residents. 223The accounts of the respective witnesses on this topic were not canvassed in cross-examination. I do not think that Mr Sherley made the representation as alleged. Even the versions given by Mr Jellins and Ms Iddon fall short of Mr Sherley giving an assurance that the access arrangements would be the same. On those accounts, Mr Sherley was talking about what stance should be taken in discussions with the residents on the question. The parties knew that a negotiation with the residents would have to occur. The draft agreements which had been prepared all contained provisions requiring the parties to cooperate to negotiate all relevant issues with the residents. Moreover, given Mr Sherley's knowledge of the requirement for reasonable access, it is unlikely that he would have given any precise assurance about what access requirements would in fact apply to the new event. (h) An implied representation that the Council had the ability and means to ensure that any other events promoted and undertaken at the track would not be the same as or similar to Trackcorp's event 224Trackcorp submitted that this representation is implied by the other representations and the surrounding circumstances. I do not think that any representation was implicitly made in those terms. The Council and Trackcorp were negotiating the terms of an exclusivity provision. At all times, drafts of the exclusivity provision placed a restriction upon Council granting other promoters the right to conduct certain events. No positive obligations to supervise or otherwise control other events, in order to ensure that they were not the same as or similar to Trackcorp's event, were stipulated. In these circumstances, I do not think that the Council can be taken to have implicitly made a representation about its capacity to achieve that outcome. 225For the above reasons, I conclude that Trackcorp's claim that the Council has engaged in conduct in contravention of s 42 of the Fair Trading Act must fail. It is not necessary to deal with the specific defences raised by the Council in paragraph 19 of its Amended Defence. 226If a conclusion had been reached that the Council had contravened s 42 of the Fair Trading Act, Trackcorp would have faced insurmountable difficulties on the issue of causation of damage. Trackcorp ran a case, supported by evidence from Mr Jellins and Ms Jones, that had the assurances said to have been given by Messrs Heath and Sherley not been given, Trackcorp would not have entered into the Agreement. This "no transaction" case was eventually abandoned. This was because the expert accounting evidence did not support the existence of any "no transaction case loss". 227Mr Sirtes therefore fell back upon the alternative case which was to the effect that had the assurances not been made, Trackcorp would have sought to negotiate more favourable terms, and the loss was thus said to be the loss of the opportunity to obtain such terms. No evidence was specifically given by Mr Jellins or Ms Jones as to what terms may have been sought had the assurances not been made. It might have been possible to infer from the evidence that an exclusivity clause which gave Trackcorp exclusivity in respect of non-racing events catering to L2S licence holders may have been sought, as well as a provision to the effect that no other promoter would be charged less than Trackcorp for track hire. However, Mr Sherley deposed that had such provisions been required by Trackcorp he would have cancelled the event and refunded the deposit that had been paid. In the absence of any challenge to Mr Sherley's evidence on this matter, or indeed any cross-examination of either Mr Sherley or Mr Heath on the issue, I would not be prepared to conclude that the opportunity to seek better terms had any real value. Did the Council breach clause 3.2 of the Agreement? 228By clause 3.2 of the Agreement, Trackcorp was granted an option to renew the Agreement for a further five annual Events, such option to be exercisable by Trackcorp giving the Council notice in writing not later than three months after the fourth Event. Trackcorp exercised that option by letter dated 7 February 2011. Clause 3.2 further provides: "Fees will need to be renegotiated in respect of the renewal term. If agreement on fees for the renewal term cannot be successfully negotiated by 31 December 2011, then this Agreement shall expire. Where the Promoter has given such a notice to BRC then BRC must continue to hold good faith negotiations with the Promoter regarding the fees to apply for track hire under this Agreement in respect of the renewal term until expiry of this Agreement or until the Promoter confirms that such negotiations are at an end." 229The obligation upon the Council to hold good faith negotiations in relation to track hire fees continued until 31 December 2011 unless Trackcorp earlier confirmed that the negotiations were at an end. There was no suggestion that the obligation was too vague or uncertain to be enforceable (cf Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1 at 27). 230Some negotiations did take place between 7 February 2011 and late December 2011 concerning track hire fees. The letters which evidence those negotiations are in many cases lengthy and somewhat acrimonious in tone. The correspondence is heavily laden with assertions of bad faith on the part of the opposing side, coupled with protestations of a commitment, on their own part, to the pursuit of negotiations in good faith. The negotiations ultimately failed, with the parties remaining a very considerable distance apart. The salient aspects of the negotiations, as they progressed throughout 2011, are summarised below. 231On 7 February 2011, Trackcorp wrote to the Council stating that it had recently ascertained from recently published information that another promoter was charged $85,000 for hire of the circuit in 2009. It was stated in the letter that Trackcorp considered "that such amount is the appropriate amount for consideration". The Council was asked to nominate a time and place to commence negotiations for the track hire fee "and other matters" to apply for the further five year term. The $85,000 figure contained in the letter is a reference to an amount apparently charged in respect of the Bathurst 12 hour event which was held over three days in 2009. 232On 18 February 2011, the Council's solicitors wrote to the solicitors for Trackcorp, stating that due to the litigation between the parties, the Council requested that all negotiations be conducted through the respective legal representatives. On 23 February 2011, the solicitors for Trackcorp replied, stating that Trackcorp did not share the Council's view that it was inappropriate for the parties to negotiate directly. Accordingly, a date was sought for a meeting of the respective clients. 233On 2 March 2011, the solicitors for the Council confirmed that the Council required all negotiations to be conducted through the respective legal representatives. The letter continued: "Further, our client does not propose to engage in negotiations with your client unless and until such time as your client is prepared to engage in meaningful negotiations consistent with its obligations to do so. In this regard, our client considers the proposal for further track hire fees contained in your client's letter to our client dated 7th February 2011 to be so wholly disingenuous that it does not represent any meaningful offer by your client whatsoever. Accordingly, unless and until such time as your client is willing to engage in meaningful negotiations, our client has no desire to meet with your client to further negotiations." 234The solicitors for Trackcorp responded to that letter on 9 March 2011. They asked for an explanation of the basis upon which Trackcorp's indication of the appropriate starting point for negotiations was stated to be wholly disingenuous. (I note, in passing, that the letter includes the statement that Trackcorp has consistently maintained that it was informed by the Council that no one else would pay less for hire of the circuit, and that this was the basis upon which it entered into the Agreement. As noted earlier, such a statement was absent from the draft email which was prepared in March 2008). 235On 21 March 2011, Mr Jellins wrote directly to Mr Roach seeking a meeting to discuss the track hire fee. On 24 March 2011, the solicitors for the Council wrote to the solicitors for Trackcorp again confirming Council's instructions that all negotiations occur through the legal advisers. Reference was made to the "difficult history" between the parties, as well as to a failure on the part of Trackcorp to respond to the substantive concerns raised by the Council in certain Default Notices which had been issued in December 2010 in relation to the recently conducted Trackcorp event. (Those Default Notices concern an alleged breach of the agreed track access timetable and an alleged contravention of established emergency procedures concerning an ambulance required to attend upon a resident of Mount Panorama. The validity of the Notices of Default had been challenged by Trackcorp's solicitors in letters dated 11 January 2011, and each of those letters contained a statement to the effect that Trackcorp would take all steps necessary to comply with the terms of the Agreement for future events including obligations relating to track access and emergency ambulance access.) The letter from the Council's solicitors of 24 March 2011 further stated that the negotiations with respect to track hire fees "must reflect the existing track hire fees and the services that are to be provided." 236A response to that letter was sent to the solicitors for Trackcorp on 11 April 2011. Amongst the numerous contentions made in the letter, reference was made to the fact that Trackcorp had proceeded to make formal complaints under the Council's Code of Conduct. That was a reference to complaints made in respect of Mr Roach and also Mr Sherley. As for the Notices of Default, it was stated that Trackcorp maintained that the notices had been served for a "collateral and improper purpose". The letter further went on to state that it was relevant that $85,000 had been charged for the Bathurst 12 hour event, and complain that the Council was using the pejorative "wholly disingenuous" as a means for the Council to avoid commencing good faith negotiations. A meeting of the respective clients was again suggested. 237There was then something of a lacuna until 2 August 2011 when the solicitors for the Council replied to the letter of 11 April 2011. It was explained that the reason for the delay was that the only officers reasonably able to instruct the solicitors in respect of the negotiations were Messrs Sherley and Roach, who were the subject of the complaints made under the Code of Conduct. It appears that neither complaint was sustained, and that the reasons for those decisions were communicated to Trackcorp in May 2011 in respect of Mr Sherley, and July 2011 in respect of Mr Roach. 238The Council's solicitors, in their letter of 2 August 2011, stated that the correct figure for the track hire fee paid in respect of the 2009 Bathurst 12 hour event was $127,000 (plus GST), and that the fees for the 2010 and 2011 events were $147,600 (plus GST) and $150,000 (plus GST) respectively. Moreover, it was stated that the 12 hour event was wholly different to Trackcorp's event "in terms of the number of days of track hire and the services provided by our client, and the events are sufficiently dis-similar that no correlation can be drawn between them as is alleged by your client." The letter reiterated that in the Council's opinion, the negotiations with respect to a track hire fee "must reflect the existing track hire fee and the services that are being provided to your client". 239On 9 August 2011, the solicitors for Trackcorp responded to the abovementioned letter. Issue was taken with many of the matters contained in the letter. In particular, it was put that Trackcorp did not think credible the statement that the Bathurst 12 hour event was so different from Trackcorp's event that no correlation can be drawn between them. Further, complaint was made about the lack of progress towards a new agreement. 240The debates continued in the communications which followed. On 9 August 2011, the solicitors for the Council responded. A "substantive response" to the default Notices was sought, and Trackcorp was reminded that 50% of the track hire fee for the 2011 event was due to be paid on 11 August 2011. The Council's position, that the starting point for negotiations must be the current track hire fee, was repeated. Reference was also made to some half page coloured advertisements placed by Trackcorp in the local Bathurst newspaper. The solicitors for Trackcorp, for their part, responded with a further letter on 11 August 2011. This letter contained a lengthy response to the matters raised by the Notices of Default. A further letter was sent by those solicitors on 26 September 2011. This letter contained an offer to pay a track hire fee of $110,000 (plus GST). The offer was made upon the basis that the fee for the Bathurst 12 hour event in 2011 was $150,000 (plus GST), a six day event which, it was asserted, required more services to be provided by the Council. The offer was also expressed to be predicated upon various matters including that there were no events which are charged a lower track hire fee than that which is paid in respect of the Bathurst 12 hour event. Finally, it was stated that the offer made was "commensurate with what appears to be the going market rate". 241It should be noted here that on 9 September 2011, the solicitors for the Council issued a Default Notice under the Agreement in respect of the failure of Trackcorp to pay the first instalment of track hire fee which was due on 11 August 2011. The notice provided that if payment was not made within 21 days of service, then the Council would be entitled to terminate the Agreement pursuant to clause 3.6. The first instalment of the track hire fees was paid by Trackcorp, under protest, on 29 September 2011. 242The solicitors for the Council wrote again on 29 September 2011. It was stated that they were presently finalising their instructions to submit an offer, and expected to be able to do so within two weeks. In fact, no offer was made by the Council until 27 October 2011, when Trackcorp's offer of 26 September 2011 was rejected and a counter-offer of $297,000 (plus GST) was made. That figure (which was to be increased by 3.5% each year, or CPI, whichever is the greater) was justified by reference to the level of track hire fees in the existing Agreement (and changes to the amount of track time made available for the event), as well as capital expenditure in the order of $5 million which the Council had or would soon incur in respect of the circuit. 243By letter dated 9 December 2011 from Trackcorp's solicitors, the Council's offer was rejected. Detailed reasons were provided as to why the rationale for the counter-offer and the counter-offer itself could not be accepted. It was stated, by reference to the Council's own principles of "market pricing" that the counter-offer was not considered to have been made in good faith. 244The solicitors for the Council responded on 15 December 2011. They stated that the letter of 9 December 2011 had been discussed and noted at the meeting of the Council held the previous evening. It was further noted that the letter of 9 December 2011 did not contain any offer on behalf of Trackcorp. The offer made by the Council on 27 October 2011 was expressed to remain open for acceptance until 23 December 2011. 245There followed some discussion between the parties on the question whether the period for negotiations might be extended. No agreement to that effect was made. On 21 December 2011, the solicitors for the Council indicated that the Council's offer would remain open for acceptance until the afternoon of Saturday 31 December 2011. 246By letter dated 22 December 2011, the solicitors for Trackcorp responded, stating that it was Trackcorp's view that the offer made by the Council was not credible and not put forward on a proper basis. It was noted that there had not been any substantive response to the matters they had raised in their earlier letter of 9 December 2011. Finally, it was stated that Trackcorp's offer of $110,000 (plus GST) would remain open for acceptance until the afternoon of 31 December 2011. 247Later on 22 December 2011, the solicitors for the Council rejected that offer, and made a counter-offer of $285,000 (plus GST) (subject to an increase of 3.5% per year, or CPI, whichever is the greater). Again, the offer was expressed to remain open until the afternoon of 31 December 2011. There does not appear to have been any response to that counter-offer, and accordingly, the Agreement expired without any agreement having been reached concerning the track hire fees to apply during a renewed term. 248In support of its claim that the Council breached clause 3.2 of the Agreement, Trackcorp relies, not only upon the course and content of the negotiations which are summarised above, but also upon the terms of a conversation which occurred on 12 October 2011 between Ms Iddon and Mr Roach. 249Ms Iddon deposes that during the conversation, Mr Roach was abusive towards her and employed profane language. Ms Iddon deposes that the conversation commenced with Mr Roach saying words to the following effect: "I don't know what you think you're up to but I've had a gutful of you and that smart mouth Jellins and your stupid games." 250Ms Iddon said that Mr Roach then went on to express frustration about "answering your stupid emails", and state that he would not be answering any more of them. Ms Iddon says that she responded with words to the following effect: "Well I disagree that they're stupid. The way I see it Bob, Trackcorp is a customer of Council's and all we're asking from you is some basic customer service so that we can run our event. We do have some rights you know." 251Ms Iddon says that Mr Roach then used abusive language towards her in denying that Trackcorp had any rights, before going on to say words to the effect that Trackcorp only had an obligation to run an event and that he wanted Trackcorp to make an immediate payment. Ms Iddon further says that after she complained about the way in which Mr Roach was speaking to her, he again used abusive language towards her, said that he would "personally make it my business to see that you and Jellins never set foot on the Mount ever again" and said that if the payment was not made by the following day, another breach notice would be issued. 252Mr Roach deposes that as at 12 October 2011, Trackcorp was overdue in payment of track hire fees. According to Mr Roach, payment (presumably of the second 50% of the fee) was due on 10 October 2011. He deposes that it was his intention on 12 October 2011 to issue a breach notice by reason of the default in payment in the event that payment was not made. He says that he spoke to Ms Iddon on that day and in doing so, made his intentions plain and may have used "plain language". However, Mr Roach denies that he was abusive and offensive in the manner portrayed in Ms Iddon's affidavit. He also denies making any threat of termination of the Agreement other than as a consequence of non-payment of the track hire fees. 253Both Ms Iddon and Mr Roach were cross-examined about the conversation. Ms Iddon maintained that her version was correct, and denied that Mr Roach said anything about the possible termination of the Agreement. She further said that she was shocked by what Mr Roach had said and, further, that he was rude and was shouting at her. 254Mr Roach appeared to accept that he did not have a firm recollection of what was said, but he maintained that he could not accept that the conversation occurred as set out in Ms Iddon's affidavit. Mr Roach specifically denied saying that he would ensure that Mr Jellins and Ms Iddon never set foot on Mount Panorama again. He denied other aspects of the conversation including that he was abusive or had described Mr Jellins as a "smart mouth". 255The conversation took place at a time when there were evident difficulties in the relationship between the Council and Trackcorp. The Council had issued a Default Notice on 9 September 2011 in respect of the track hire fee. Later in September 2011, Trackcorp had asserted that the Council had breached the Agreement. Those assertions were made in an email sent by Ms Iddon to Mr Roach on 15 September 2011, and a letter dated 27 September 2011 from Trackcorp's solicitors to the solicitors for the Council. As at 12 October 2011, the level of tension between the parties was likely quite high, with payment of the balance of the track hire fees now overdue and the event due to commence on 9 November 2011. I think it is likely that, in the conversation held on that day, Mr Roach forcefully demanded payment of the outstanding track hire fees, failing which a further Notice of Default would issue. It is also likely, in my view, that there was discussion about the assertions recently made by Trackcorp, and that Mr Roach expressed frustration about the raising of such matters. I am also prepared to accept that Mr Roach may have used some profane language during the conversation. However, I think it is unlikely that the language employed by Mr Roach was such as to cause any significant offence or shock to Ms Iddon as claimed. I also do not accept that Mr Roach said words to the effect that he would personally make it his business to ensure that Ms Iddon and Mr Jellins never set foot on Mount Panorama again. He is likely, in my view, to have said no more than that if payment of the track hire fees was not made, then steps would be taken to terminate the Agreement. 256Ms Iddon sent an email to Mr Roach in the late afternoon of 12 October 2011. The email includes the following: "Thanks for the phone call this morning. My understanding of our conversation is that you're not prepared to answer further emails from us and that makes it extremely difficult. Realistically, for us to be able to finalise our preparations for 2011, we need answers both to the concerns already raised as well as any other issues that may arise. We have assured you of our co-operation and we ask for yours in return, but as of now we seem to have reached an impasse. As a solution, despite the fact that it will significantly disrupt my preparations for the event, I am prepared to travel to Bathurst to meet with you one-on-one ... I will bring a cheque with me - the default notice you have intimated you intend to issue tomorrow is neither warranted nor necessary and will do nothing to assist the current situation." 257In cross-examination, Ms Iddon said that the words "thanks for the phone call this morning" were said ironically. To my mind, the tone of the email rather suggests an attempt on Ms Iddon's part to have the dialogue henceforth proceed on a more reasonable and constructive basis. There was, after all, an event due to commence within a matter of weeks that needed to be organised. Nevertheless, in the light of the difficult relationship that undoubtedly existed at that time, and Trackcorp's demonstrated willingness to make complaints about the Council and its officers, had the conversation been as threatening and shocking as Ms Iddon claims, there would surely have been some complaint made about it at the time. 258A Default Notice was in fact issued by the Council on 13 October 2011 in relation to the unpaid portion of the track hire fees. Later on that day, Mr Roach responded to Ms Iddon's email of the previous day. Mr Roach's email contained the following: "It is incorrect to say that I will not reply to further emails. What I said was I would not reply to your email of 7 October 2011 as I had given you my reply of 5 October 2011 that covered Council's position. Should you decide to travel to Bathurst you will need to meet with Mark Rayner, Doug Patterson and myself to ensure we are going forward with your November event. Council has today issued a 'breach notice' regarding payment in accordance with the contract conditions." 259The emails referred to by Mr Roach do not appear to be in evidence. Neither is there any reply to Mr Roach's email in the evidence. It does appear, however, that arrangements were subsequently made for meetings to take place (including meetings on 21 and 28 October 2011) to discuss numerous issues concerning the operation of the forthcoming event. On 1 November 2011, Trackcorp paid the balance of the track hire fees, again under protest. 260As noted earlier, it was not suggested that the obligation to hold good faith negotiations was too vague or uncertain to be enforceable. In assessing the content of the obligation it is, of course, necessary to consider it in its particular contractual setting (see United Group Rail Services Ltd v Rail Corporation New South Wales (2009) 74 NSWLR 618; [2009] NSWCA 177 at [70]). Here, the obligation arises in the context of the exercise of an option to renew an existing contract, where the subject matter of the contemplated negotiations concerns an important term which would need to be agreed before the renewed agreement would come into existence. It seems to me that the obligation, so viewed, allows the negotiating parties to pursue their own interests in relation to the subject matter of the term (the track hire fees) so long as they continue to honestly and genuinely participate in the negotiation process (cf United Group Rail Services Ltd v Rail Corporation New South Wales (supra) at [73]-[74]). 261Trackcorp relied upon a number of matters to establish a breach by the Council of the obligation. It was submitted that such breach should be inferred from the following: (a)by not engaging in negotiation between February and late October 2011; (b)by leaving the conduct of the negotiations to Mr Roach, who had an animus against Trackcorp, primarily evidenced by the conversation he had with Ms Iddon on 12 October 2011; (c)by delay in dealing with enquiries and requests for information made by Trackcorp and by being unresponsive to a number of such enquiries; (d)by refusing to engage in negotiations other than through, or in the presence of, lawyers; (e)by failing to address concerns advanced by Trackcorp about the Council's philosophy in relation to the setting of track hire fees; (f)by imposing a fee which was higher than the current fee payable by Trackcorp and higher than that charged to other users of the circuit; (g)failing to appoint a person within the Council who could impartially and properly engage in good faith negotiations; and (h)by adopting, without considering other available approaches, a pricing policy of using the existing track hire fees as the minimum fee from which to add an uplift. 262For the reasons which follow, I do not think that any breach of clause 3.2 has been established. 263I do not think it is correct to characterise the Council's conduct as not engaging in negotiations between February and late October 2011. It is true that the Council did not make any offer to Trackcorp during that period. However, I do not think that the question whether the Council is holding good faith negotiations within the meaning of clause 3.2 is determined by whether or not it is making offers. The concept of holding negotiations seems to me to entail a broader process of engagement in relation to the issue at hand which might, but not necessarily, involve the making of formal offers. 264In February 2011, the Council requested that all negotiations be conducted through the parties' respective legal representatives. That is an indication of a willingness to engage in a process of negotiations. In March 2011, the Council expressed the view that the proposed track hire fee set out in Trackcorp's letter of 7 February 2011 was so disingenuous as not to represent any meaningful offer. The Council accordingly stated that until such time as Trackcorp was willing to engage in meaningful negotiations, it had no desire to meet with Trackcorp. Again, and notwithstanding the reference in the 2 March 2011 letter to not proposing to "engage in negotiations", I do not think that this stance of the Council is tantamount to a failure to hold good faith negotiations within the meaning of clause 3.2. 265It is apparent that the parties were seeking to establish points of reference in relation to which the negotiations may progress. That process continued following the lacuna which occurred whilst the complaints made against Messrs Roach and Sherley were dealt with. The position of the Council was, in essence, that the negotiations must reflect the current track hire fee and the services that are provided. The current fee was $241,758 (inclusive of GST). (That figure was less than the figure for the negotiated fee set forth in the schedule to the Agreement. That was due to the reductions which were agreed upon in 2008.) Against that, Trackcorp maintained that a track hire fee set by reference to the fee payable in respect of the Bathurst 12 hour event was appropriate. Offers were made upon those respective bases in the period from September to December 2011. 266The offer made to Trackcorp in late October 2011 was apparently based upon the then current figure for full track set-up costs for the circuit for a four day event. Mr Roach said that it was the part of the Council's then revenue policy. I accept Mr Roach's evidence in that regard. The figure is the 2011 equivalent of the $258,000 figure which was used as the basis for discussion in 2007. I do not think that the Council, by proposing a track hire fee on that basis, was failing to honestly or genuinely participate in negotiations. Neither do I think that the Council, by maintaining its position that the track hire fee should be in the order of such a figure, was failing to honestly or genuinely participate in negotiations. 267I do not accept Trackcorp's complaint concerning the role played by Mr Roach. It may be accepted that there were tensions and difficulties in the relationships between Mr Roach on the one hand, and Mr Jellins and Ms Iddon on the other. Those tensions and difficulties were but part of a fraught relationship between the parties. Mr Sirtes described the relationship in 2011 as "toxic". However, it was not shown to my satisfaction that Mr Roach was imbued with personal animus against Trackcorp. That suggestion was primarily based upon Ms Iddon's account of the conversation of 12 October 2011. I have not accepted important parts of that account, and I do not think that the conversation demonstrates any significant animus on Mr Roach's part. In any event, it was not established that the stance taken by the Council in the negotiations was dictated by Mr Roach. He was undoubtedly the officer with carriage of the negotiations on the Council side, but he was not operating at large. As earlier mentioned, the offer made in October 2011 was derived from the Council's revenue policy. There was also evidence that the position advanced by Trackcorp in its solicitor's letter of 9 December 2011 had been discussed by the Council itself at its meeting on 14 December 2011. Following that meeting, the Council in effect reaffirmed the offer which had been made in October 2011. 268I also reject the suggestion that Council's insistence that negotiations be conducted through the respective legal advisers was evidence of a failure to hold good faith negotiations. It seems to me that in circumstances where the parties were involved in litigation, such an insistence was not unreasonable, and the actual conduct of negotiations on such a basis ought in no way impede their progress. The continuation of the difficulties between the parties throughout 2011, including the making of complaints against Messrs Roach and Sherley, reinforces the reasonableness of the Council's position in this regard. 269Finally, I do not accept that any delays in dealing with Trackcorp's enquiries or requests for information, or any inadequacies in their responses to such enquiries or requests, establishes any failure on the part of the Council to honestly or genuinely participate in negotiations concerning the track hire fee. Both parties had stated their essential positions on the question. A debate then followed. In the course of that debate, Trackcorp sought to advance its position, or undermine the Council's position, through the seeking of information and calling for explanations. Trackcorp was perfectly entitled to take that course. The Council, in deciding how to respond to such requests, was itself entitled to take into account its own commercial interests. The obligation to engage honestly and genuinely in negotiations provides a qualification to, but does not undermine, the essential nature of the process which was a commercial negotiation. The Council, in responding to Trackcorp's requests, no doubt did so in a manner calculated to best advance its own position. Perceived inadequacies in the Council's response do not, in themselves, indicate that the Council has acted other than honestly and genuinely in the conduct of the negotiations. 270Viewed overall, the conduct of the Council has not been shown to have been in breach of clause 3.2. The Council, as the owner of the circuit, was entitled, in the context of the negotiations, to seek to maximise its revenue. That it chose to seek a track hire fee at a level higher than the current track hire fee does not, in itself, suggest that the Council was not genuine in its approach to the negotiations. In essence, both parties took a position about the level at which the track hire fee should be negotiated, and maintained their respective positions throughout. In circumstances where those positions were so far apart, the maintenance of those positions inevitably led to the failure of the negotiations. Both parties exhibited a somewhat inflexible approach, but in my view neither can be said to have approached or continued the negotiations in a manner which was not honest or genuine. 271Even if I am wrong about that, I do not think that Trackcorp established that it lost a valuable commercial opportunity by reason of any failure on the Council's part to hold good faith negotiations (see Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332 at 349-350). Trackcorp claimed that due to the Council's failure to hold good faith negotiations, Trackcorp lost the opportunity to reach agreement as to the track hire fee which would operate throughout the renewed term. The calculations put forward on this head of claim were based on track hire fees of $165,000 for the five day event. That figure was taken from the amount that was charged in respect of the 2012 Bathurst 12 hour event. 272However, no evidence was given that Trackcorp may have been prepared to accept a track hire fee higher than the amount it offered, namely, $110,000 (plus GST). Moreover, neither Mr Roach nor Mr Sherley was cross-examined (by reference to the 12 hour event or otherwise) to the effect that the Council, negotiating in good faith, may have accepted a track hire fee considerably lower than the amount it offered, namely, $285,000 (plus GST). In those circumstances, I would not be prepared to conclude on the evidence that there was any real (as opposed to speculative) prospect that these parties would have reached an agreement on the track hire fees for a renewed five year term. 273It may be accepted that in cases where loss of an opportunity is involved, there may be greater scope for a court to engage in some "guesswork" in doing the best it can to assess the loss (see the discussion of the principles by McColl JA, with whom Campbell JA and Handley AJA agreed, in McCrohon v Harith [2010] NSWCA 67 at [118]-[126]). Nevertheless, the extent to which it is appropriate for a court to engage in such "guesswork" is related to the ability of the parties to adduce evidence to establish the loss claimed. In this case, evidence could have been adduced which would have provided a basis for a rational assessment of the possibility that agreement on track hire fees would have been reached. In the absence of such evidence, the Court is not in my view required to engage in speculation or guesswork in order to assess the claimed loss. Restitution 274Trackcorp contends that when it paid the track hire fees under the Agreement (which it says totalled about $1.175 million over the five year period) it was acting under a mistake, namely, that the Council was duly authorised to charge such fees. The essence of the argument is that the Council was not so authorised because the fees were not determined in accordance with the provisions of Part 10 of Chapter 15 of the Local Government Act 1993 (NSW) ("the Act"). 275Part 10 of Chapter 15 of the Act regulates the charging by councils of certain fees for services (see s 608(1) of the Act). Procedures are laid down in relation to the determination of such fees. Those procedures include the giving of public notice of the fee, and the consideration of any submissions made in relation to the fee. Trackcorp contends, correctly, that the track hire fees specified in the Agreement were not determined in accordance with the provisions of Part 10 of Chapter 15 of the Act. The Council did not contend to the contrary. 276However, Mr Rayment submitted that Trackcorp's case misconceives the scope of Part 10 of Chapter 15 of the Act. He submitted that those provisions are not the only sources of power available to the Council to charge the track hire fees. Reference was made to Chapter 6 of the Act, which concerns, inter alia, the classification of public land into either "community" land or "operational" land, and imposes some restrictions upon the ability of councils to deal with community land, leaving the use and management of operational land relevantly unrestricted. Mr Rayment informed the court that the Mount Panorama circuit was operational land. The provisions of Chapter 6 of the Act clearly contemplate that a council might enter into licence agreements in respect of public land, including licences of more than five years duration. 277Mr Rayment further referred to the general power of the Council to contract (see ss 8 and 21-23 of the Act and s 50(1)(e) of the Interpretation Act 1987 (NSW)). Mr Rayment also pointed to what he said were absurd consequences inherent in Trackcorp's contentions on this part of the case. It was said that those contentions involve the suggestion that track hire fees (even if otherwise governed by a multi-year licence agreement) need to be advertised and reset each year with the benefit of public participation and submissions. 278I do not think that the track hire fees under the Agreement are governed by the provisions of Part 10 of Chapter 15 of the Act. The Council has not sought to rely upon those provisions as the source of power to charge the fees. It is true that the Council, in its annual statement of revenue policy for the 2007/ 2008 year (which is required pursuant to ss 402 and 404 of the Act) refers to circuit hire in the schedule of fees and charges. However, for "Full Circuit Closure", the amount of the fee is not stated as would be required by s 404(1) of the Act if the fee is a fee to which Division 3 of Part 10 of Chapter 15 of the Act applies. Instead, a per day minimum fee is shown, together with the statement "actual fees on negotiation". 279I further accept Mr Rayment's submission that Part 10 of Chapter 15 of the Act is not the only source of power available to the Council to charge the track hire fees. That is so, in my view, regardless of whether the fees are characterised as a fee for service so as to be capable of being dealt with under Part 10 of Chapter 15 of the Act. As shown by the provisions of Chapter 6 of the Act, a council has the power to deal with its public land, including by way of agreements for licence. There is no suggestion that the Agreement falls foul of any relevant restriction found within Chapter 6 of the Act. Moreover, the Council has the general power to contract in connection of the exercise of its functions. In my opinion, the Council had the power to enter into the Agreement with Trackcorp which included the provision requiring Trackcorp to pay track hire fees each year throughout the term of the Agreement. I do not accept the asserted basis of the claim for restitution, and that claim must therefore fail. Conclusion 280For the above reasons, Trackcorp has failed to establish any of its claims to relief. Accordingly, its Further Amended Statement of Claim should be dismissed with costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 May 2014