Supreme Court New South Wales Medium Neutral Citation: Baycorp Capital Ltd v Dex Consulting Pty Limited [2014] NSWSC 1298 Hearing dates: 24 - 28 June,1 - 5, 22 - 26 July 2013, 18 November 2011 Decision date: 22 September 2014 Jurisdiction: Common Law Before: Adams J Decision: (1) Judgment for the defendants. (2) Costs to be determined following submissions. Catchwords: PLANNING LAW - flood affected land - significance of probable maximum flood - need for flood evacuation - no question of principle Legislation Cited: Trade Practices Act 1974 (Cth) Local Government Act 1993 (NSW) Environmental Planning and Assessment Act 1979 (NSW) Environmental Planning and Assessment Regulation 2000 Rural Fires Act 1997 (NSW) Cases Cited: Shannon Pacific v Minister for Planning [2007] NSWLEC 669 Category: Principal judgment Parties: Baycorp Capital Ltd (ACN 119 396 057) (Plaintiff) Dex Consulting Pty Limited (First defendant) Michael James Dutton (Second defendant) File Number(s): 2009/297619 Judgment Introduction 1Baycorp Capital Limited was registered on 24 April 2006, for the purpose of developing a site near Port Macquarie on which it was intended to erect moveable homes for sale on leased lots to persons over the age of 55 years. Mr Carter (who owned 500,000 shares out of a total issued capital of 10,947,000 shares), who said he was Victoria's largest country home builder at the time, arranged with the company to locate a site and obtain development approval for the project, with the company to finance construction (with him as project manager) and manage the site. It was agreed that Mr Carter would initially pay the cost of making the development application, building up a loan account to be paid when the project was completed and sales permitted. However, it was a crucial part of this arrangement (which was not reduced to writing) that Baycorp would not be liable to repay this money if development approval were not obtained. 2In early 2006 Mr Carter found an apparently suitable block on Maria River Road, Port Macquarie and, in March 2006, Baycorp entered into a contract for its purchase, with completion to follow development approval. In August 2006, Mr Carter approached Mr Dutton (the principal of Dex Consulting Pty Limited) in respect of the development application and, on 7 September, wrote appointing him Baycorp's consultant. The precise nature of the arrangement as to the application is disputed but Mr Dutton agrees that Dex was retained as Baycorp's consultant for the purposes of seeking development approval. For reasons that do not matter, Mr Carter decided some months later to move the proposed development to a neighbouring block of land (on Shoreline Drive) and, on 1 December 2006, entered into an option arrangement for its purchase, again conditional on development approval being obtained. 3The process of putting together documents for submission to the Macquarie-Hastings Council, now in relation to the Shoreline Drive property, continued and, following a number of communications between Dex and Council officers, the development application was lodged on 22 March 2007. Further communications ensued, resulting in approval being refused by the Council's Development Assessment Panel on 11 December 2011. A number of reasons were given by the Panel for refusal but those of present relevance concern the significance of potential flooding on and around the site. 4Baycorp alleges that Dex warranted, in substance, that it was appropriately qualified to undertake the task for which it was retained and use all reasonable care, skill and diligence in doing so and that it "should have known or ascertained at the relevant time" that the problems with flooding, having regard to the proposed use and topography of the site and its surrounds, relevant planning instruments and legislation and the New South Wales Floodplain Management Manual and Policy, meant that the development "could never have been approved". Accordingly, Dex was negligent and in breach of its retainer "in failing to advise the plaintiff at the time of the agreement [on 7 September 2006] or shortly thereafter that the application ... would not ... receive Council approval". 5The crucial question, therefore, concerns the flooding issues. Whether other considerations might have led to refusal is immaterial. It appears to have been accepted on all hands that the other issues with the application identified by the DAP were susceptible of resolution or, at least, were unresolved as at the date of refusal for reasons that it was not sought to argue could be laid at the defendants' door. 6It is also contended by Baycorp that Mr Dutton represented to Mr Carter that Dex, with its employees, was suitably qualified to perform the task of consultant in connexion with the development application and that this representation was misleading and deceptive conduct within the meaning of the Trade Practices Act 1974 (Cth), giving rise to an entitlement to compensation for ensuing loss. Again, this claim (although not limited in this way in the Amended Statement of Claim) is focused on the way in which the defendants dealt with the flooding issues affecting the development. It was not contended by Baycorp that there was any relevant shortcoming as to the other complexities of the proposal. 7So far as damages are concerned, these fall into two categories: the first is the money expended by Mr Carter on making the application, including obtaining reports and assessments from various experts and Dex's fees as well as the fee Mr Carter charged Baycorp for his services; and the second is for loss of the profits that Baycorp would have made by expending that money - or most of it - on developing another site as had been intended for the impugned site. It is probably worth noting, at this stage, that it is difficult to see any basis for the first claim, since the development application did not cost Baycorp anything, having regard to its arrangement with Mr Carter that it would not be liable to reimburse him unless development approval were obtained. I deal briefly with the second claim in due course. 8I should mention that, shortly after the refusal of Baycorp's application, Mr Carter retained another planner (Mr Andrew Scott) and another flooding expert (Murray Dalton and Associates) through another company (Macquarie Gardens Ltd), and made another similar development application in respect of the Shoreline Drive property. So far as flooding was concerned, the flood risk assessment was not markedly dissimilar from that which was prepared by Dex, though it was somewhat more elaborate. That second application was likewise refused, again for a number of reasons including the problem of flooding. Relevant terms and technical documents 9The Flood Plain Development Manual (April 2005) was produced by the then Department of Infrastructure and Natural Resources - "[to guide] Councils in the development and imputation of detailed local flood plain risk management plans to produce robust and effective flood plain risk management outcomes." The forward states the "primary objective" of the Policy - "... Is to reduce the impact of flooding and flood liability on individual owners and occupiers of flood prone property and to reduce private and public losses resulting from floods. At the same time, the policy recognises the benefits flowing from the use, occupation, and development of flood prone land. The Policy promotes the use of a merit approach which balances social, economic, environmental and flood risk parameters to determine whether particular development or use of the flood plain is appropriate and sustainable. In this way the policy avoids the unnecessary sterilisation of flood prone land. Equally it ensures that flood prone land is not the subject of uncontrolled development inconsistent with its exposure to flooding." 10Paragraph 1.1 of the Policy states - "The primary objective of the... Policy... recognises the following two important facts: Flood prone land is a valuable resource that should not be sterilised by unnecessary precluding its developments; and if all development applications and proposals for rezoned land are assessed according to rigid and prescriptive criteria, some appropriate proposals may be unreasonably disallowed or restricted, and equally, quite inappropriate, proposals might be approved." 11Of considerable relevance, having regard to the topography of the site proposed for development is the Policy provision in paragraph 1.1.2 which contains the following - "[The policy] provides for... a merit based approach to selection of appropriate flood planning levels (FPLs). This recognises the need to consider the full range of flood sizes, up to and including the probable maximum flood (PMF) and the corresponding risks associated with each flood, whilst noting that with few exceptions, it is neither feasible nor socially or economically justifiable to adopt the PMF as the basis for FPLs. FPLs for typical residential development would generally be based around the one per cent AEP flood event plus an appropriate freeboard (typically 0.5m) ..." 12AEP stands for Annual Exceedance Probability which specifies the chance of a flood of a given or larger size occurring in any one year, usually expressed as a percentage. For example, if a particular height or greater of flooding has an AEP of one per cent it means that there is a 1-in-100 chance that this event will occur in any one year. In the present case, the term 1:100 year flood has been used to describe this phenomenon. Thus, in respect of the site, flooding to a height of 3.3m AHD is a flood which, in any one year, is assessed as having a one per cent chance of occurring. AHD is the Australian Height Datum, which is a measure approximately corresponding to mean sea level. 13"Flood liable land" is land susceptible to flooding by a PMF event and covers the whole flood plain not just that part below the FPL. The flood planning area is the area of land below the FPL and, as the Manual describes it, "thus subject to flood related development controls". Given the prominence in this case of the PMF relating to the site, it is useful to set out the definition of this term in the Manual - "The PMF [Probable Maximum Flood] is the largest flood that could conceivably occur at a particular location, usually estimated from probable maximum precipitation and, where applicable, snow melt, coupled with the worst flood producing catchment conditions. Generally, it is not physically or economically possible to provide complete protection against this event. The PMF defines the extent of flood prone land, that is the flood plain. The extent, nature and potential consequences of flooding associated with a range of events rarer than the flood used for designing mitigation works and controlling development up to and including the PMF event should be addressed in a flood plain risk management study [prepared by the relevant Council]". 14The Manual describes - "... Certain areas where development would reasonably be excluded... [including] areas where flood hazard is too high and cannot effectively be reduced to acceptable levels by management measures. Emergency management is an important consideration as to whether an area is too hazardous for development due to flooding e.g. islands..." 15The following passage is also of particular importance in this case - "G 9.5 islands The formation of islands in the flood plain during a flood is a potentially dangerous situation. This is especially so when floods larger than the flood used to derive the FPL totally inundate the island ... people trapped on the island and their rescuers will be placed at undue risk. Thus the development that becomes isolated prior to ultimate inundation needs to be considered with great care." 16Section 733 of the Local Government Act 1993 (NSW) protects Councils from liability in relation to (amongst other things) flood damage, subsection (4) providing the Council had acted in good faith if the impugned action or inaction was "substantially in accordance with the principles contained in the relevant Manual", here the Flood Plain Development Manual 2005. Good faith is presumed unless the contrary is proved. 17The Hastings River Flood Study 2006 (HRFS) was undertaken by Pattison Britton & Partners as a preliminary step in the development of a risk management study and a consequent risk management plan by the Council. Amongst other things, the study contains a table of predicted peak design flood levels along the Hastings River. Relevantly, at the confluence of Hastings and Maria Rivers the PMF is shown as 6.8m AHD (and, interestingly, the 200 year recurrence event at only 3.9m AHD) whilst at Hibbard Ferry these measurements are respectively 6.4m AHD and 3.4m AHD. Both these points are close to the proposed development site. 18The Study notes that the peak flood level estimates are based on a peak ocean level of 2.2m AHD whilst the peak 100 year recurrence ocean level is 2.6m AHD. The ocean levels are, as I understand it, relevant, since tidal influence extends for about 32kms upstream from the mouth of the Hastings River, with the Maria River being the major tidal tributary. 19Even a cursory examination of the HRFS (which is all it has been necessary for me to undertake) reveals a high degree of technical complexity involving the development and analysis of hydrologic and hydrodynamic models, detailed historical data with a large number of maps showing flood water depths and velocity vectors for various flood recurrences and geographical areas within the scope of the study. In the following section I describe Mr Dutton's expertise in the technical aspects of flood assessment. This gives his opinions in this respect, particularly so far as interpretation of the HRFS is concerned, particular persuasiveness, since neither of the experts called by the parties has comparable technical qualifications or experience. Of course, it is necessary to bear in mind that he is not an independent witness. Nevertheless, given the character of the plaintiff's case, a finding that Mr Dutton's relevant views about the particular matters in issue so far as the HRFS is concerned appear to be reasonably open must be significant. I should add, in fairness that, although Mr Dutton exhibited (not unreasonably, given that his professional competence was under attack) a degree of defensiveness in his answers, I thought he was an honest witness whose evidence about technical matters reflected what he thought at the time and was a reasonable approach to the particular matter in dispute, the most crucial of which was whether a sufficient area of the subject land could be expected to remain above the PMF level to provide a refuge for the residents in that event. Mr Dutton's qualifications 20Mr Dutton's curriculum vitae was tendered. Although he was cross-examined about his qualifications and experience, it was not suggested to him that this or his claimed experience was not the fact. He holds the following qualifications - · Bachelor of Engineering, Civil, NSW University of Technology, 1985. · Certification (No 2493) as a NSW Municipal Engineer (Ordinance 4) in 1986. · Chartered Member of the Institution of Engineers Australia (No 120061), "CPEng". · NPER Registration in both Civil and Structural Engineering since 1998. · Graduate Certificate in Environmental Engineering, 1998, UTS. · Accredited Certifier under the NSW E P & A Act in all Civil, Structural and Subdivision areas. · RTA accredited Road Safety Auditor since 2002. · Member of the Institute of Public Works Engineers Australia (IPWEA), New South Wales Division. · Member of the Local Government Engineers Association of New South Wales and the Association of Professional Engineers, Scientists and Managers of Australia (APESMA). · Member of the Australian Conservation Foundation. The work which his firm, the first defendant, has undertaken includes the following (within the Kempsey Shire and elsewhere) - · Development assessment, preparation and application for a wide range of projects, such as large commercial and residential buildings, dwellings, quarries, caravan parks, intensive agricultural ventures, environmental projects, etc. · Rezoning application preparation and pursuit for a range of lands for various uses. · Subdivision application preparation and development and construction approval. · Preparation of Flood Studies and other constraint definition. · Preparation of Environmental Reports, Land Assessment and feasibility studies. · Preparation of Bushfire Assessments & Effluent studies. · Design of projects incorporating innovative environmental initiatives for energy reduction, efficiency, and practicality. · Liaison with and supervision of a wide range of other specialist consultants in the fields of surveying, ecology, noise studies, traffic studies, flora & fauna assessment, soil assessment, flood studies, etc. · Liaison with the full range of Government Departments and instrumentalities such as DECC, Planning NSW, RTA, Agriculture, Fisheries, etc. · Liaison with all Councils in the Mid-North Coast Region. 21Mr Dutton worked for 15 years with the Kempsey Shire Council and either personally prepared supervised or contributed to the preparation of a number of Council planning control policies or development control plans, including the Flood Risk Management Policy and many flood studies, plans and programs including Development Control Plans for a large number of locations and other work relating to industrial and residential land development at South Kempsey and South West Rocks. Mr Dutton pointed out in his affidavit, and I accept, that he had extensive experience dealing with flood prone land because much of Kempsey is flood prone. He also had experience preparing flood management plans and emergency management plans which provide for contingencies in the event of flood on various sites. He has, as I understand it, when in private practice, worked on a number of successful projects, which have involved lot design and planning approval applications. In this regard he listed 11 projects, together with other work for which he has prepared structural designs and drawings. 22Mr Dutton left his employment with Kempsey Shire Council in 2001 to establish Dex Consulting Pty Limited which was originally called Dutton Engineering Excellence. He is a member of a number of professional associations, though these are connected with engineering, including environment engineering. Of particular significance for present purposes is his work with Kempsey Shire Council Flood Control Operations, including implementation and enforcement of the Council's policy on Flood Plain Management including preparation of flood maps, interpretations of flood studies and advice to other departments and the public on these matters, the design of flood mitigation structures such as flood gates, culverts, drains, levies and bridges, the supervision of consultants in preparation of Flood Studies and specialists designs, the operation of the Shire Flood Plain Management Committee and, during floods, management of the Macleay Flood Control System and emergency operations. 23When he gave evidence, Mr Dutton described his occupation as a consulting engineer. In cross-examination he expanded his work history to include his employment for the Bellingen and Port Macquarie Councils in the mid North Coast area and as well for the City of Sydney and Marrickville Council for about 13 years, and before that with rural councils. He described himself as having 45 years of experience both working for councils and in private practice. Although he did not have formal qualifications by way of diploma or tertiary degree from a university he thought (and I do not think this can be sensibly disputed) that becoming a planner does not need these formal requirements. He said that as part of his Bachelor of Engineering Degree and his Certificate in Environmental Engineering he also studied development planning and he also had an Ordinance Four Certificate as a Shire engineer which permitted him to be a planner in some rural councils which do not have planners but do have engineers. He agreed that town and regional planning was not his principal line of work, however, this of course is not a concession that he is not qualified to undertake this work. He was cross-examined about his entry in the yellow pages with an entry under town and regional planning because, he said, that is part of what he did. He was asked about his experience with hydraulic engineering and stated - "... Well, as I said, I have had 40 years of relevant experience. For 15 years I was Kempsey Shire's expert in hydraulic flooding and hydraulics, hydrology. I managed and set up several major flood studies and the Macleay River is a much bigger river than the Hastings, three times the size. I also worked with Hastings council, Cliff Toms, who was a Hastings council person, on some of their flood studies, because he's my neighbour. I also worked on the 2001 Floodplain Development Manual with the State Government. I was on a committee for that. So I think I have a lot of experience in flood matters." Mr Dutton later added - "... [As] part of my CPD requirements I have attended many flood conferences. I have presented papers at flood conferences... I have been on the panels for flood modelling and flood studies as a representative of the Local Government Engineers Association, the IPWEA, I've worked with the Public Works department in preparing at least the 2001 [Flood Plain Management Policy] document and some earlier ones..." 24He said that he had experience in flood modelling by the use of computers. He was taken to Dex's webpage in which he described himself as a flood specialist and said that Dex's work involved "flood assessment and reporting, planning and development application preparation". He agreed that he had advertised himself as having the skills and qualifications to be able to handle Baycorp's development application. 25In connection with questions about his familiarity with the HRFS he said that he was aware of the Study but not of its contents although he believed he had read a draft copy. He said that he did work for it. I asked him - "Let us assume that Mr Carter had come to you ... 'this is only a concept plan we might have got this all wrong, it's what we thought was important. Will you please undertake this planning application for us?' Let's assume he said that to you. Would you have felt qualified to take that work? A. I think so, yes your Honour." 26There is some dispute between Mr Carter and Mr Dutton as to what was said, if anything, about Mr Dutton's qualifications to undertake the proposed work. On the view I take, this does not matter. Leaving aside the exact scope of Dex's retainer, I think that Mr Dutton was entitled to hold himself out as qualified to attend to the development application by way of ensuring that it was properly and competently put together with appropriate reports and submissions as to both the planning and the development aspects. The extent to which Mr Carter entrusted these tasks to him is a matter of controversy which I deal with at a later stage. 27I consider that Mr Dutton had ample qualifications to undertake the work he was retained by Baycorp to do, even on Mr Carter's description of it. The evidence does not support the claim that Mr Dutton was guilty of any misrepresentation so far as his qualifications were concerned. There must judgment for the defendants as to the cause of action under the Trade Practices Act. Mr Reinhold's qualifications 28Mr Reinhold obtained a Bachelor of Arts (Geography and History) Degree at the University of New England from which he graduated at the end of 2007. In the geography part of that degree he completed planning subjects. He commenced employment with Dex in mid 2006, leaving in early November 2008 to take up employment with Kempsey Council as an area planner. Of the last four planning subjects one was completed in 2006 and the balance of three in 2007. He was employed as a student in training to assist Mr Dutton with planning work, at all times working under his supervision. 29Mr Reinhold was involved in working on the development application, increasing his direct contact with Mr Carter as time went on. However, all the work that he did was done under Mr Dutton's supervision. Mr Reinhold recalled that there were important letters written from the Council setting objections and problems with the project, perhaps three or four. He said that to his personal knowledge these were discussed with Mr Carter by him. He said that he could not recall whether the discussion proceeded item by item but they were in detail. Mr Carter never said anything to him that suggested he really knew nothing about town planning and was going to leave it to Dex and asked that "you just tell me what to do". Dex is retained 30On 18 August 2006, Mr Carter called Mr Dutton and told him of the proposed development on the Maria River Road site. There is inconsequential disagreement between them as to the detail which was conveyed. Of greater significance is that Mr Dutton said that Mr Carter told him, in effect - "My staff at Baycorp have prepared all the documents and all you have to do is submit it and then liaise with the Port Macquarie Hastings Council". (Mr Carter emphatically denied saying anything of this kind. For reasons which will become clear, I think that Mr Dutton's account is more likely to be accurate. Indeed, generally I regard him as a more reliable witness than Mr Carter.) 31They made an arrangement to meet a few days later. This occurred on 22 August 2006. (Mr Carter's affidavit places the initial conversation with Mr Dutton's office on 7 September 2006 but it is obvious from a follow up letter of 25 August 2006 that this is a mistake, which was later acknowledged by Mr Carter. The Maria River Road site was not mentioned in his first affidavit. He said, surprisingly, that he had forgotten about the site "for a while".) He and Mr Dutton agreed that they met on 22 August 2006 and that at that time Mr Carter gave Mr Dutton volume one of the project documents which Mr Dutton more or less examined. He and Mr Dutton, however, disagree as to what was then said. Mr Dutton maintains that the conversation was to the following effect - "Carter: 'We would like to obtain development approval from the PMHC for a development on Maria River Road. I will be the Project Manager and I will arrange for the engagement of any other consultants required. I would like you to submit the development application to PMHC along with the technical reports and liaise with PMHC.' Dutton: 'We can submit the application as you wish. However, the development is outside the normal range of permissible developments and I cannot give any guarantee of eventual approval by the council. This is a complex proposal and whether it will get approval will depend upon positive interpretations and decisions by the council.' Carter: 'Here are some extracts from technical reports that Baycorp staff have prepared'." He said that Mr Carter then showed him a document entitled 'Macquarie Gardens - SEPP 21 - Development Proposal - Port Macquarie - Volume 1 - Main Report, August 2006', which was discussed at length. (This document comprised two parts, one which may be described as the concept plan and the other, reports - such as environment, fauna and flora and the like - and was tendered and is referred to as "the first proposal". "SEPP" is a reference to State Environmental Planning Policies.) 32Mr Dutton said that, after he looked through the document, the conversation continued - "Dutton: I do not think these documents are adequate to submit to the PMHC in support of the DA. The information is not specific enough and you are required to advise the qualification of the author. Carter: This is a sample of what we have prepared. I will have all the documents delivered to you. Just submit them as they are and I will have my staff make any changes later. Dutton: Who prepared these reports? These are not site specific. Carter: Baycorp staff prepared them. Baycorp has extensive, experienced staff. We are the biggest manufacturer of manufactured homes in Victoria and have undertaken similar projects to this.' He referred to another 'resort' that Baycorp had developed near Ballina, known as Pacific Blue Resort." There was then a discussion of the retainer and Mr Carter ended the meeting saying that he would discuss the matter with the directors of Baycorp and respond in writing, sending him the remaining documents if Mr Dutton were engaged. Mr Carter left a copy of the concept plan with him. 33Mr Carter's first affidavit gave an account of this conference though, as I have mentioned, mistakenly dated it as occurring on 7 September 2006 - "On or about 7 September 2006, I had a conference with [Mr Dutton] in his office. I recall that I said to [him] words to the following effect: 'We have a proposed site on the corner of Maria River Road and Shoreline Drive, North Shore, Port Macquarie, which we are proposing to build a Retirement Resort. The Park will include a community centre, a bowling green, three tennis courts and clubhouse, nine hole golf course and clubhouse, swimming pool, gymnasium, library, general store along with parks and gardens. We want to build and permanently house 882 retired residents on the 441 sites. This is the proposal for the site.'" He handed what he described as "various documents" to Mr Dutton but "could not recall exactly what [the] documents [were]". He recalled Mr Dutton looking at the documents. He said that he could not recall the exact words Mr Dutton said to him but their conversation took some 45 minutes. He said at the end the following exchange occurred - "Mr Dutton: I have one qualified town planner, I am a qualified engineer and we have one architect. Between us we have all the necessary qualifications, expertise and skill to provide what you need. We would be more than happy to do the Development Application.' Carter: What are your payment terms? Mr Dutton: We will send you monthly invoices for the work we do and for any of the consultants that we engage for Baycorp. Carter: Thats fine. I will leave the proposal with you then." 34(Mr Dutton denied discussing his qualifications or those of his staff with Mr Carter at this or, indeed, at any other meeting. I deal with Dex's other planning employee, Mr Reinhold, later, noting for the present that I do not think he could be fairly described as a "qualified town planner". However, I do not accept the reliability of Mr Carter's evidence as to this conversation.) 35Mr Carter denied that Mr Dutton said anything about the complexity of the proposal and approval depending on positive interpretations and decisions by the Council and not being able to guarantee eventual approval. He said that this evidence was a "fabrication". He said, had Mr Dutton said this to him, "I would never have agreed to proceed with the Development Application". 36He also denied saying that he had extracts and technical reports prepared by Baycorp staff. In his third affidavit, replying to Mr Dutton's first affidavit, said he told Mr Dutton - "Here is the documentation you will need for the application. I have put them together for you to help start the development application process and so you can have an idea of what the proposal is about. But if you are the experts at doing these applications and we go ahead and do business together then I will leave it to you to finish off putting together the documentation for the development application." He said that he also told Mr Dutton - "I am not an expert at town planning. You will need to finish what I have done and put it all together properly as you are the experts." 37On 25 August 2006 a few days after his initial introduction and discussion with Mr Dutton, Mr Carter wrote to Mr Dutton enclosing a copy of what was described as the "project development application [namely, the first proposal] for your perusal", referred to discussions between Mr Ray Green (Baycorp's managing director) and Mr Matthew Owens at the Council concerning the planning attributes of the site with a suggested solution to the problem raised by Mr Owens, and concluded - "With the information provided in this letter, you may be able to negotiate the matter through. If you can't, we need to get a written rejection from the Hastings Council as fast as possible so that we can go straight to the Land and Environment Court. Matthew Owens has requested that if we get past this stage, a preliminary meeting should take place with the appropriate people in attendance. He has been advised that our Town Planning Consultant, yourself, would contact him in due course." 38Mr Owens had, it appeared, told Mr Green that the site could not be developed as proposed because it was zoned as rural land (the "zoning issue"). This was a debate that continued for quite some time, eventually resolved in Baycorp's favour. The precise details are immaterial but it will be necessary to make brief reference to it from time to time. Mr Carter expressed "our opinion" that Mr Owens was mistaken by reference to nearby urban land, separated from the site by the Hastings River so that it was still "adjoining" land within the definition of the word in the Local Government Act where separation by a river was said to be immaterial. It is fair to say that this letter showed some acquaintance with the relevant planning instruments and applicable legislation. 39Since the plaintiff's case crucially depended on the extent to which Mr Carter relied on Mr Dutton to undertake the work necessary to obtain development approval, the fact that the conversation about what he wanted Dex to do was not contained in Mr Carter's first account of this meeting gives rise to a significant degree of scepticism about its reliability. Furthermore, in light of the problems which ultimately led to development being refused, which were evident to a greater or lesser degree from the outset, it would not be surprising if Mr Dutton had indeed suggested, in effect, that the application was an optimistic one. Mr Carter also denied saying to Mr Dutton that his staff had prepared the documents and all that was necessary was to submit it and liaise with the Council. The letter of 25 August does not suggest that Mr Dutton needed to do more than peruse the proposal and, using the information in the letter (presumably as to the zoning), "negotiate the matter through". 40The letter does not suggest that the document was not to be taken at face value or ask Mr Dutton for an evaluation or about the chances of obtaining approval, let alone authorise him to make changes. In his evidence, Mr Carter agreed that his letter of the 25 August 2006 suggested "as it were, the deal is done and dusted ... okay, here's the material, go ahead". He agreed that the letter did not suggest that Mr Dutton needed to do more work. Rather all is suggested is that he needed to undertake negotiations. He was asked - "[From the letter] It appears that your state of mind did not involve the necessity for any significant work, at least, to be done in relation to the development application? A. That was my intention at the start then Mr Dutton got the letter and the documents [on 25 August] and rang me up and said, 'I can [the transcript has "can't" but Mr Carter said "can", as is clear from the context] get development approval with this'." 41It is necessary, to appreciate the character of the document that was given to Mr Dutton, to describe its contents in a little detail. It comprised two volumes. The first (of 59 pages) described the proposal as "involving the development of a caravan park and associated facilities on a 68.4 hectare rural property located 6 km north of Port Macquarie ..." It stated - "This application has been compiled by the staff of Baycorp Capital Ltd. The Site description, analysis description and Environmental Assessment of the key environment issues of the development have largely been prepared by Baycorp Capital Ltd with specialist input from the various consultants as relevant to the disciplines identified in this Application. Likewise, the sections on statutory planning controls and consultation have also been provided by Baycorp Capital Ltd with advice from the various representatives." 42The volume goes on to provide further extensive detail of the proposal, including discussion of a number of planning considerations. The second volume, comprising various wide ranging assessments, comprised 276 pages. Taking each of the chapters in sequence, the first was the "Flora and Fauna Impact Report", August 2006, which commences - "The report was prepared in accordance with requirements of the Threatened Species Conservation Act 1995 and Environmental Planning and Assessment Act 1979... Note that assessment of flora and fauna at the site in terms of provisions under State Environmental Policy Nos 44 and 46 are also discussed in Volume 1." 43The report states the percentage of the site which had been cleared and used for grazing (approximately 30 per cent) and that the native and introduced species on the pastures included bitou bush, lantana, whisky grass, kikuyu grass, paspalum and coral trees. The drainage lines did not contain noxious weeds. The areas were inspected during "drier times" and in "wetter times". The report notes that the site included "one evident naturally occurring shallow (generally 350 millimetres in depth and varying from 2 metres to 4 metres wide) watercourse which runs from East to West and drains to the West over one adjoining property...". This watercourse was also stated not to contain noxious weeds of any kind. Under the heading "Threatened species" a list of animals is given derived from NPWS Wildlife Atlas Records but "only species that Baycorp Capital considered suitable to habitat on the site" were listed. There follows a discussion of the factors set out in s 5(a) of the Environmental Planning and Assessment Act 1979 (NSW) in respect of threatened species and, as to each of the other eight relevant factors, comments are made including the following - "Within the study area, a number of threatened fauna species have been predicted to occur. Baycorp Capital has divided the predictive list into four categories, being species known to occur on or in close proximity to the site... [etc]". 44A description of the proposed development is included, with the conclusion, "it is considered that a significant area of known habitat will not be modified or removed". The "impact assessment" evaluates the nature and scope of the proposed development and ways in which the facilities should be located to avoid areas of natural vegetation. Habitat types located on the site are described in detail, with reference to the number of specific native and introduced species. "Compensatory ameliorative measures" are described in detail. It is asserted that a "field survey" was conducted on 11 January 2006 and identifies the fauna survey methods which were implemented for both day and night searches. The vegetation was surveyed by conducting random meanders in areas initially identified by aerial photography and fauna species "recorded during the survey" are listed. A protected species list of fauna and flora was compiled, said to have been obtained from an extensive list of identified publications and it was said that "habitat resources available on the site, local records of threatened species and results of the field survey were used to determine into which category a species was placed", producing lists of more likely occurrences, possible occurrences, less likely occurrences and known occurrences. Further details of the flora and fauna listed follows with "an assessment as to whether, in the consultant's opinion, the life cycle of the species is likely to be disrupted ...". There is an extensive discussion of the protection and management of native vegetation requirements under SEPP46. Any person reading this assessment would have thought that it had been prepared, as it asserted, by consultants retained by Baycorp for the purpose of the proposed development. 45The next chapter is the social impact assessment, also dated August 2006, which stated it had "been prepared in accordance with Hastings' Council Social Impact Assessment Policy." It comprises a detailed discussion of the issues. It contains a list of the proposed employees operating the site. 46A flood risk assessment comes next, said to be based "on plans provided, available data, engineering judgment and approximate techniques to assess the likely hydraulic effects of the proposal". There is no description of any flood levels that might affect the site. A noise impact statement of August 2006 follows, comprising a detailed discussion of this issue with what is described as a "summary or clarification of noise control recommendations". Again this purports to be site specific and reflect Baycorp's approach to this question. The same can be said for the chapter on effluent disposal which, amongst other things, refers to the specifications of two sewerage treatment plants designed for the project, with a detailed description of the specifications and a "preliminary installation and operations Manual". The next chapter is an agricultural assessment, which contained a very detailed table of "soil test results for Baycorp Capital Limited" said to have been provided by the "Sydney Environmental and Soil Laboratory". The report ends with an impact assessment and recommendations. 47A traffic impact report appears next, again specifying the site, describing the existing site condition containing a map, referring to traffic counts on Maria River Road and a report "prepared 7 June 2006" setting out information as to resident vehicle ownership and trips made to and from 94 retirement villages. Predictions of vehicle use are also contained and a number of tables providing detailed information including access roads are photographed and described, together with a detailed account of the availability of two ferry services giving access to Port Macquarie from the project side of the Hastings River. 48A detailed geotechnical assessment, including soil test results for Baycorp provided by "Sydney Environmental and Soil Laboratory" is included (identical results to those already referred to). A detailed analysis of examples of ground water taken from the water table is included. The next chapter deals with drawings of the new home and infrastructure buildings. There is a landscape assessment which involves detailed descriptions of the site. A sewage treatment plan is outlined together with a desalination plant report containing details of the proposed plant and its use, followed by a fire assessment and mitigation report. This report also contains detailed information of the site and the location and character of the buildings to be developed on it. A public safety and construction assessment is next dealing with, amongst other things, the way in which building on the site will be controlled to avoid negative impacts on surrounding property. The next chapter is an ecologically sustainable development report, in substance referring to other relevant assessments to which I have already referred. This assessment concludes as follows - "Cumulative Impacts Under the issue of cumulative impacts, it would appear that the most obvious areas to address are impacts on flood behaviour, water quality, geotechnical, traffic and access, visual impacts and noise. The proposed development has been redesigned a number of times during this EIS process. It is considered that the final layout, in conjunction with the recommended mitigation measures and safeguards outlined in this EIS, will result in no adverse cumulative impacts on the local environment." 49A list of "mitigation measures" is included, relating to water quality, archaeological discovery during earth moving, flooding, flora and fauna, noise, erosion and sediment control, landscaping, traffic and parking, effluent disposal, dust and public safety are summarised. There is also a proposal for developing an environmental management plan. The product demand analysis contained the lists of statistics as to potential occupiers, describing what was said to demonstrate the demand for the housing proposed in the development. 50The proposal concluded with a "Director's Statement" signed by two directors - "The Directors of Baycorp Capital Ltd, whose names appear below and who authorized the lodgement of this Development Application with the Hastings Council, accept responsibility for the information contained herein. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this Development Application is in accordance with the facts and does not omit anything likely to affect the import of such information. This Application has been signed by Directors of Baycorp Capital Ltd." This statement speaks for itself. Mr Carter said it was inserted at the insistence of the directors. He said - "I was going to go to a town planner and the directors of the company said they put that in there so that the town planner or anyone else could see that they stood behind it ... It's taken out of a prospectus for a float, for a public company float of which Mr Ray Green is a chartered accountant ..." 51Astonishingly, not a word of this was said to Mr Dutton. However, although in cross-examination Mr Carter said that the sewerage treatment plan information was provided by a consultant, the report concerning the desalination plant was done by an expert, the soil test results were obtained by Baycorp from Sydney Soil Laboratories, (from samples taken on the site by him), he said the rest of the document was just downloaded from the internet. Although he co-ordinated the preparation of the project document he had not read 90 per cent of it. He said he had co-ordinated the preparation of the report, having written about 20 per cent of it - that part which related to the type of development such as it being a caravan and how many houses and so on were proposed - the rest of it, he said, "was just downloaded off the internet by 'some young bloke working for me at Baycorp Capital and Mr Ken Stevenson who later became Managing Director'". Although it read that Baycorp was going to do this or that, he said, "It is easy to download it all and then make it applicable to us, it's simple". He had said, by preparing the document he thought he would "make myself a hero by saving a lot of money ... in terms of planning". He was asked - "Q. So how was it that you thought you'd make yourself a hero, if you didn't even know what was in the document? A. Well if I've got the Ray Green's word and other people helping me with this, downloading stuff, assembling it into a book and I take it to a town planner and then I've saved a lot of money, because half the work is done, so I thought, and the truth is that this is so vague and just useless." 52In short, Mr Carter is as I understand him suggesting that at the time he thought he had done "half the work" and only later found out that it was worthless. As to later finding out that it was worthless, I believe him. However, when he brought this document to Mr Dutton he believed he had indeed done most of the work, as he certainly gave Mr Dutton to understand. He agreed he never suggested to Mr Dutton that he could or should not rely on the statements in the assessments or that much of the material had simply been collected from other development applications on the web even though the assessments read as genuine and applicable to the site and that any person who read them would think that what they said had been done had in fact been done. He conceded in cross-examination that he told Mr Dutton, "my staff at Baycorp have prepared all the documents" (which is along the lines of the directors' statement, though that also refers to experts). As to telling Mr Dutton that the assessments had not actually been done by relevant experts he said, "I couldn't, I haven't read it. I just handed him the whole thing. I never said 'yes' and I never said 'no'." It was "all given to Mr Dutton as a first draft of which he could take sections out if he wanted to use it towards a development application". However, this account is not in any of his affidavits nor is it hinted at in the letter of 25 August and I think he opportunistically added this detail. 53Mr Carter said that, when he sent the letter of 25 August to Mr Dutton, he "had already asked [Mr Dutton] to carry out an assessment of the 77 Maria Road proposed land before [Baycorp] proceeded any further because I needed to be convinced that a development application would be successful so neither myself or [Baycorp] would waste any money". There had been no reference in his earlier affidavit to any request to Mr Dutton to make an assessment as to the likelihood of success, nor is there any suggestion that he needed to be convinced of success, nor is such a request made in the letter of 25 August, which comprises the first written indication of what Baycorp wanted Dex to do. However, he had stated that about three weeks after their first meeting (mistakenly said to be 7 September) Mr Dutton told him, in effect, "I can get you the development approval for the proposed Retirement Resort on the land you have. Do you want to come in and see me to discuss this further". Mr Dutton denied ever making such a statement. To have given such an assurance would have been very foolish, especially since Mr Carter had not sought it. (Indeed, a striking characteristic of Mr Carter's attitude to the subsequent negative suggestions by Council officers and his own planning solicitor, Mr Donnellan, is Mr Carter's consistent omission to ask Mr Dutton what he thought the chances were of success.) This issue needs to be considered also in the light of the retainer agreement that I am satisfied Mr Dutton forwarded to Mr Carter for execution on a number of occasions (dealt with below) which contains a specific term declining to give any guarantees of success. I am satisfied that Mr Carter never asked Mr Dutton for an assessment of the likelihood of obtaining development approval and that no assurance of success was given by Mr Dutton at any time. 54It is often the case that the surest guide to the truth is the logic of events and contemporaneous material of one kind or another even, accepting of course, that people can act illogically, documents can be written in haste or under a misapprehension or without close attention. As to this initial stage of the process, however, it seems to me that both the logic of events and the contemporaneous documents to which I have referred strongly support Mr Dutton's account and tells against that of Mr Carter. It seems to me that the only reasonable interpretation of the letter of 25 August, taken with the apparently genuine character of the document, as verified by the directors of Baycorp, which Mr Carter expected Mr Dutton to accept, is that the first proposal was to be sent on to the Council in accordance with the instructions that had, on Mr Dutton's account, earlier been conveyed to submit the document as it was, with changes to be made as required by the Council. I accept the evidence of Mr Dutton that his role at this point involved collating and lodging documents for the development application, which had for the most part been prepared by Baycorp. He understood (I think because of the 25 August letter) that Mr Carter wanted to proceed with a proposal to develop a site on the North Shore of the Hastings River, whether or not the Council approved it. The first proposal goes to the Council 55The next significant matter was the delivery by Dex on 11 September (under cover of a letter dated 7 September 2006) to the Council of the first proposal for development of the Maria River Road site as a caravan park. Although the letter refers to Baycorp's instructions to submit a development application (and the Directors' Statement so describe it) Mr Dutton refers to the document as "an extensive environmental review and justification for the project" and undertook to provide further information if it were necessary. The latter also attached a discussion of the relevant planning requirements and legislation, concluding with the suggestion that "the proposal is permissible under the SEPP21, subject to the Council's approval and conditions". 56Mr Carter agreed in cross-examination that he received a copy of this letter at about the time it was sent. I have already pointed out that the letter of 25 August referred to perusal and did not, in my opinion, suggest or authorise any amendment. Mr Carter said, however, that Mr Dutton was supposed to review the report before it was sent to the Council, although he agreed that there was no written communication to the effect it should not have been forwarded without review and amendment. He did not suggest that the letter of 25 August had this implication. Furthermore, Mr Carter said he never asked for a copy of the document which had been sent to the Council on behalf of Baycorp, even though he claimed that he never expected that the document which he provided to Mr Dutton (after some wavering, with the letter of 25 August) would go to the Council without other material being added. Nor did he ask what changes had been made. His explanation was that this was "only a pre-lodgement meeting" (I think he meant "communication", not "meeting"). Mr Carter agreed that, when he read the letter, he understood that the document which had been forwarded to the Council was the same as that he had provided to Mr Dutton, without significant change. Yet he made no inquiry of Mr Dutton for an explanation for this lack of amendment in what he knew was, in large part, a mere dummy. This is because he assumed, as I see the matter, there would be no significant change. 57The only sensible explanation for Mr Carter's conduct, taken as a whole, is that, as Mr Dutton said, he was not asked to make his own assessment of the proposal or of the documentation, but was instructed to forward it to the Council unchanged as the basis for negotiation through to approval. This conclusion follows from my rejection of the reliability of Mr Carter's evidence in favour of Mr Dutton's contradictory account. The nature of the evidence in dispute, and the emphatic way in which Mr Carter expressed his recollection also leads me to doubt his candour, although I do not go so far as to make a positive finding of dishonesty. Nevertheless my doubts about his evidence in respect of the matters so far discussed are relevant to my assessment of the reliability other evidence he has given about other aspects of the case. 58On 14 September 2006 Mr Owens, the Council's planning manager, wrote to Dex with reference to the submission. It is sufficient to observe that Mr Owens pointed out that volume one did not "adequately address the requirements for a development application" and listed a number of matters requiring amendment. Briefly, the amendments required a "rigorous assessment of the proposal in relation to the Environmental Planning and Assessment Act 1979 and the approvals required by this Act", pointing out that the submitted documents simply inserted the provisions of the Act without addressing relevant parts of the Act. It was also necessary to provide a "rigorous assessment of the proposal in respect of Schedule 3 to the Environmental Planning and Assessment Regulation 2000 particularly in relation to the sewer treatment and effluent storage and reuse". It was necessary also to provide a "complete assessment of the provisions of SEPP21 (caravan parks), SEPP36 (manufactured home estates), SEPP44 (koala habitat protection), SEPP55 (contaminated land) and any other relevant SEPP with careful consideration being given to the interrelationship between these SEPPs, other Acts, especially the Rural Fires Act 1997 (NSW) and development control. The documents did not address the Hastings Local Environmental Plan 2001, specific issues such as flora and fauna and bush fire were insufficiently detailed and assessment reports prepared by suitably qualified persons needed to be submitted. Bush fire asset protection zones also needed attention. Mr Owens inferred from the form of the document that it appeared "to have been prepared for a concept plan application under Part 3A of Environmental Planning and Assessment Act" but that part of the Act did not apply; a development application required more than statements of intent. He indicated the list was not complete. It may be worth noting nevertheless that flood issues were not referred to. The letter concluded as follows - "The above matters, plus any other relevant issues, MUST be addressed prior to submission of any development application to the Council. The preliminary review of the submitted documents suggests that, if an application was submitted as proposed it would be rejected by Council as incomplete and returned to the applicant. It should also be noted that, based on the submitted documents, it is still questionable that the proposed development is permitted in the locality ..." 59It appears that, on 15 September 2006, Mr Owens spoke to Mr Dutton by telephone and followed up with an email concerning the delivery to Council of two boxes of the same documents which had been previously provided reiterating that lodgement of any application without addressing the outstanding issues would be rejected and the documents returned. An hour or so after this email was sent, Mr Dutton responded, with a copy to Mr Carter and Mr Green, suggesting some confusion about the relevant LEP and "some typing errors", promising that the points of concern would be addressed and details of the qualifications and methodology of the various environmental specialists whose reports were contained in the forwarded material would be obtained. Mr Owens responded promptly on the same afternoon by email addressed to Mr Dutton, copied to Mr Carter and Mr Green, giving further information about the appropriate LEP and pointing out, as I understand, that it was necessary that the reports in the other volume or volumes should be summarised in the main report and demonstrate how these findings are consistent with the statutory requirements. This email attached his letter of 14 September. Mr Owens also referred to the fact that the "Volume 1 - Main Report" (ie, the first proposal) was "the same document that was submitted to the Department of Planning in relation to the concept plan under Part 3A [of the Environmental Planning and Assessment Act 1979]". So much for the document being a draft for Mr Dutton's examination and amendment. Mr Carter did not tell Mr Dutton about the approach to the Department of Planning. 60In cross-examination Mr Carter denied receiving the letter of 14 September, adding that if he had read it, he had "forgotten about it and ... wouldn't understand it back then anyway". At all events, he was taken to the letter and asked if he would have understood from it that there was a big problem with the application, to which Mr Carter "I would have understood that the application I did up was useless". Since this was indeed its effect, it is difficult to accept that he either forgot the letter or did not understand it. Although Mr Carter and Mr Green were, as I have mentioned, copied into these emails (as appears on their face) he denied receiving Mr Dutton's email even though it was addressed to him. He agreed that he got emails from Mr Dutton all the time and said that he had no idea why he had not received this particular email. Mr Owens' email which was copied, as I have said, to Mr Carter and Mr Green, referred to the "attached letter", namely the letter dated 14 September 2006. There was some argument about this matter which I do not intend to rehearse. It seems to me, given Mr Carter's central role in the entire process, in the ordinary course one would expect very important correspondence of this kind - it was, after all, the first communication by the Council about the proposal - to have come to his attention, one way or another and he would certainly have enquired about it. I do not accept his evidence that he had not received Mr Owen's email forwarding the letter. When asked whether he was "very interested to know what the Council thought" of the proposal he said, "No, not at all" - he was only interested in what Mr Dutton had said to him. This is not credible. Mr Carter's said the issues raised in Mr Owens' latter and the ensuing emails were not "serious problems at all [but] it was a matter of doing up a proper development application, not my silly stuff". 61On 18 September 2006 Mr Carter sent to Mr Dutton a planning certificate under s 149 of the Environmental Planning and Assessment Act dated 2 December 2005, with a note saying that he would give Mr Dutton a call "in due course so that we can work out what is required and what is not". Mr Carter's note stated that the purpose of sending the certificate "is so we can ascertain exactly what reports are required and what are not, as part of the development application, pointing out that the certificate indicates, as he understand it, that a fauna and flora report was not required". As indicated, Mr Owens' letter referred to the need for a flora and fauna report, strongly suggesting that Mr Carter had seen his letter. 62A planning certificate must include "such matters relating to the land to which the certificate relates as may be prescribed" (s 149(2), not presently relevant) and may "include advice on such other relevant matters affecting the land of which it may be aware" (s 149(5)). Sub-section 149(7) provides that, for the "purpose of any proceedings for an offence against this Act or the regulations which may be taken against a person who has obtained a planning certificate or who might reasonably be expected to rely on that certificate, that certificate shall, in favour of that person, be conclusively presumed to be true and correct". However, contrary to the view expressed by Mr Warnes (an expert called by Baycorp, whose evidence I deal with in due course), this is not the only function of a certificate issued under this provision, as sub-secs 149(2) and (5) make clear. Although plainly not in any sense conclusive, advice given by the Council in such a certificate is a representation of the fact asserted. The point of noticing the certificate here is the following information, listed as details required to be given under sub-sec 149(2) - "Part of the land is flood liable land, being land likely to be inundated in the 1 in 100 year flood as identified on mapping held in the office of Council. Council has by resolution adopted a Policy on Flooding and there is likely to be limitations on development as set out in the Policy. Council has set a minimum floor level of 800mm above the estimated 100 year flood level for all habitable rooms. The hundred year flood level in the vicinity is estimated to be RL 3.4m AHD. The likely depth of inundation in a 100 year flood can be ascertained by reference to ground levels which should be obtained from a registered surveyor." 63As to the zoning problem raised by Mr Owens, Mr Carter said that Mr Dutton suggested he should "hire a solicitor experienced in town planning to get permissibility sorted out". This being so, Mr Carter could scarcely have thought that Mr Dutton was assuring him that there was no problem, at least with permissibility. Furthermore, until that matter was, as Mr Carter put it "sorted out" Mr Carter could not be confident that the development application could get approval. 64On 19 September 2006 Mr Dutton wrote to Mr Carter commenting on Mr Owens' letter of 14 September 2006 (mistakenly said to be dated 7 September 2006). Mr Dutton said, in respect of the "rigorous assessments" which were required that he believed this had been done in the assessment document which, however, would be checked and expanded. The notion of "concept plan" was accepted as mistaken and some amendments made to bring it into line with the requirement for a Statement of Environmental Effects (SEE). Concurrence from the Rural Fire Service was required and Mr Dutton said that he had requested a quote for this work. He pointed out that it was necessary to apply to the Minister for Planning to obtain the Director General's requirements for the development which might concentrate on sewerage disposal but other aspects as well including extensive environmental reporting, advertising and public consultation. As to the issue concerning the interrelationship of the various SEPP requirements, Mr Dutton said that SEPP44 (koalas) needed to be addressed by the expert on the site and the SEPP (seniors living) needed to be addressed in respect of safety, bush fire, access etc. which is something Mr Dutton said he could do. He pointed out that the technical reports needed to be supported by the qualifications and certifications of the specialists, specific intentions needed to be specified for all requirements such as those relating to the flood prone areas and effluent disposal areas rather than a promise to assess these matters at a later stage, the effluent disposal section was inadequate in a number of respects specified by Mr Dutton and the Users Manual which had been provided was inadequate as to those matters, volume one (the main report) needed to "be rewritten to be an overview and summary of all the technical aspects" and the satisfactory responses and requirements to satisfy everyone involved, requiring a "lot more examination and detailing" of these matters, and there were several other matters such as signage which could be addressed. Mr Dutton pointed out that the s 149 Certificate raised issues as to the site being flood prone, the acid sulphate soils, "critical habitat", minimum floor levels or habitable rooms, and an assessment made for the presence of any poisons, oil, fuel spills and other contamination made, and issue of bush fires addressed. Mr Dutton raised additionally the need for a detailed site survey to allow plotting of the flood level of 3.4 metres and determination of flood free areas, if any, which might have effects for the appropriate effluent disposal and plotting of required bush fire buffers and other areas. He concluded by pointing out that an EIS was required to the size and nature of the sewerage collection, holding and disposal systems and that "your technical specialists [needed] to review their reports in line with Council requirements for actual proposals to comply with regulations of other bodies, NPWS, RFS, RTA etc. not just vague intentions". Mr Dutton undertook to obtain quotations for a fire assessment and arrange for a site survey. Mr Carter agreed that he received this letter but, although its clear tenor is that Baycorp needed to address most if not all of the identified points and implied that Mr Dutton, at the end, would collate all the material and present the case, Mr Carter said that he understood that Mr Dutton was to make the amendments to the text addressing the other concerns raised by Mr Owens. 65Mr Dutton said that on 19 September 2006 he sent to Mr Carter by mail to his post office address an engagement agreement in respect of the development proposal, a copy of which was exhibited to his affidavit. This agreement is in conventional terms, providing for such matters as payment of fees and disbursements, termination, billing arrangements and lien pending payment. It also (significantly) provided - "Outcomes We have experienced great success in obtaining positive results for our clients, but cannot warrant or guarantee outcomes where these are dependent on determinations or influenced by other parties." 66Mr Carter denied ever receiving this document. Mr Dutton concedes that he did not get it back from Mr Carter executed or otherwise. Mr Carter said, in his third affidavit, with particular reference to the clause set out above, that had he received such a letter of engagement he would not have retained the defendants, repeating that Mr Dutton had told him, sometime in September 2006 "I could get you the development approval for the proposed retirement resort on the land you have". I do not accept any of Mr Carter's evidence about this matter. Firstly, I think it is very probable indeed, almost certain, that this letter of engagement was indeed sent and, hence received by Mr Carter. Furthermore, I do not accept that Mr Carter genuinely thought that Mr Dutton had guaranteed success or would do so. Mr Dutton's suggested verbal assurance is, I note, completely at odds with what is contained in what is clearly his conventional terms of engagement. Given the complexity of the development proposal and the relevant considerations, involving a number of government departments, not only would it have been extremely foolish for anyone in Mr Dutton's position to have guaranteed success but even such an assurance would not have been relied on by anybody with the slightest degree of commercial sophistication and Mr Carter had a great deal more sophistication, than this. Such a guarantee would necessarily have been so remarkable that, if Mr Carter indeed was going to rely on it for the purpose of expending substantial sums of money, I do not doubt that he would have attempted to get it in writing. 67Mr Dutton said that not only had he sent the engagement agreement but that he asked Mr Carter on several occasions to sign and return it. Mr Carter said this did not happen. I accept Mr Dutton's evidence on this point. 68On 22 September 2006 Mr Dutton emailed Mr Carter, copying Mr Green, stating that he had reviewed what was now called the SEE document (the first proposal) and Mr Owens' comments, adding "we probably need a bit more work and rewriting of the document if they are going to accept it". He pointed out that he believed "the development is designated due to the size of the sewerage system and the fact that it is flood prone, but that needs to be assessed". On the same day Mr Dutton sought a quotation for a bush fire assessment from a relevant expert and, on 26 September 2006 wrote to Mr Carter discussing whether the proposal could be classified as a "designated development" within the meaning of Schedule 3 to the EPA regulations 2000 and the consequences of such a classification, which carried with it the need for additional reports and fees. Classification depended (as I understand the letter) on, amongst other things, the distance between the sewerage system and existing dwellings and the positioning of the sewerage system on the flood prone land and other relevant criteria which he related to the proposal. He "strongly" suggested that a survey of the property to prove the development was not flood prone and otherwise did not come within the criteria for a designated development should be undertaken. He pointed out that, at all events, the Council would require a survey and "highly detailed plans, reports and studies, many of which would incorporate at least some elements of a registered survey". He said that a flood statement was likely to be necessary and referred to the need to deal with the disposal of treated waste. 69On 10 October 2006 Mr Dutton emailed Mr Owens (copied to Mr Carter and Mr Green) to inform him - "My clients have rewritten most of their Statement of Environmental Effects to reflect the changes in the proposal since those reports were written. They are now supported by declarations from the various specialist consultants." He added - "[Baycorp] would like to submit the application as a "rural tourist facility" as it is in a rural area and will contain tourist recreational facilities (golf course, tennis, bowls, etc.) with some ancillary accommodation (initially perhaps 50 cabins to limit sewer output) and based on the rural, scenic and natural attributes of the locality that appears to be permissible under the zoning and HLEP They would also like council to consider rezoning the site to a zone which would permit the ultimate rural caravan park they have in mind. Can you please advise on the likelihood of success or make any comments?" 70Mr Owens responded on 13 October 2006 (copied to Mr Carter and Mr Green) indicating that he doubted the proposal conformed with the definition of a Rural Tourist Facility and thought that the definition of "Tourist Facility in the LEP" better described the proposal but such a facility was not permitted by the 1(a1) zone (applying to the land). Mr Owens expressed concern that "this is the third name change for the proposal". He said the documents demonstrated the proposal was a "manufactured home estate or tourist facility" both of which uses were not permitted in the zoning. On the same day Mr Dutton sent an email to Mr Owens (copied to Mr Carter and Mr Green) repeating that the proposal has changed a great deal from the original "manufactured homes estate" so that there were now to be "only as many manufactured homes in the estate as permitted", reducing the "original proposal ... for 550 homes ... [to] around 50 or whatever is permissible under the zone to suit effluent disposal needs, Schedule 3 flooding etc". He discussed the distinction between a tourist facility and a "rural tourist facility" and concluded - "... if manufactured homes are not permitted they will not be put there. If this proposal cannot be accepted as a "rural tourist facility" in this zone, please advise would allow the application so we can proceed with a rezoning application. I would advise my clients that we will submit the application as a "rural tourist facility" as soon as possible." 71Mr Owens responded (copied to Mr Carter and Mr Green) in substance saying that he could only comment on the information which he had at hand and that, if the development application was lodged, the Council could undertake a full assessment and would notify of any problems. 72When Mr Carter was taken to these emails, he said that he did not recall any of the information adding, "I certainly wouldn't be submitting it as a tourist facility so I couldn't have got this". He could not think of any reason why he would not have got it, then stated - "A. ... I just don't remember it. I acknowledge that I probably did get it but I don't remember it". So far as Mr Dutton mentioning the desire to submit the application as a rural tourist facility Mr Carter said that he could actually have told him to indicate that and agreed that it represented a very significant change to the development but maintained that he had no recollection of it. Mr Carter said that the Statement of Environmental Effects had not been rewritten and that he knew nothing about Mr Dutton's suggestion that this had been done. He said he knew nothing about the SEE being "now supported by declarations from the various specialist consultants". Nor did he know anything about asking the council to consider rezoning which would permit the "ultimate rural caravan park they have in mind". At the end of this evidence I asked him - "Q. So what you are suggesting, as I understand it, is Mr Dutton without authority and knowing you would never agree to it, sought a rural tourist facility approval limited to 50 cabins knowing that that was totally different to your original proposal and never consulted you about it? A. Not at all. Q. He never did. Is that what you're saying? A. Yes. Q. How would you not discover eventually - lets assume what the Council did? A. Mr Dutton would have to tell me, wouldn't he? Q. And you think - A. I wouldn't agree to it, no. This defeats the whole purpose of what I was trying to achieve with a retirement village." When it was pointed out to him that he had not responded to Mr Dutton's proposal he replied - "I haven't seen this before. Today is the first day I've seen it. I know my email address is on the back and I know I probably should have received it. I've never received this before. His Honour: Q. But not only was it sent to you, it was sent to Mr Ray Green who was a director of the company? A. Maybe Mr Ray Green negotiated this with Mr Dutton. I don't know. I didn't. Q. I see. So had he negotiated it on behalf of Baycorp? A. He could have. Q, Then it follows that Mr Dutton would have been complying with the instructions of the plaintiff? A. That is correct. If he had have. And that discussion never took place between Ray Green and myself. Not ever. I would have remembered this. It is totally radically different to what I wanted to achieve. Not only that, these documents weren't rewritten. There's no two versions of them." 73Mr Carter's evidence was that he spoke to Mr Green every two or three days about the proposal. He suggested, as the cross-examination on this subject continued, that he was aware from Mr Reinhold's affidavit (Mr Reinhold was an employee of Mr Dutton at the time and a witness in the trial) that Mr Dutton's computer was not working properly at about this time. A difficulty with this explanation is that it is clear that Mr Owens received Mr Dutton's emails since he replied to them. Mr Carter agreed that the emails indicated that there was a fundamental change to the entire scheme to something that he did not want at all. Mr Carter was taken to his third affidavit, sworn in response to that of Mr Dutton of 18 October 2011. Mr Dutton's affidavit came with six or seven volumes of documents to which he referred. Mr Carter's affidavit responded to many of those documents and denied receiving a number of them, including for example the letter of engagement. He agreed that, if he were of the view that he had not received any of the documents exhibited to Mr Dutton's affidavit, he would have said so and, if he did not deny receiving it, he accepted that it had been sent to him. He was taken to the paragraph that specifically referred to the emails passing between Mr Dutton and Mr Owens between 10 and 13 October 2006. He said that when he read the particular paragraph (52) of Mr Dutton's affidavit he was aware that he did not get any of these emails and he did not know why he did not state this in his own affidavit, explaining, "I must have missed it". He agreed that, if Mr Green received these emails, he would have spoken to Mr Carter about them but he did not do so. 74He accepted that Mr Dutton's making a specific reference to the email exchange in his affidavit meant that he regarded it as an important fact but said that he did not bother checking the documents. When asked why, he responded, "I have no idea, I just didn't". At the end of the cross-examination on this subject matter, Mr Carter was asked - "Q. In respect of all of these 13 October 2006 emails you can't rule out whether you got them or not though can you Mr Carter? A. No I cannot. To be honest, maybe I got them and don't remember them or I didn't take any notice of them, I don't know. I've never seen them before that I recall. That's all I can say. I don't understand that because I always went through all my emails properly as a proper business person did and I don't understand if I did receive them how I could have missed them. I just don't understand." 75I asked Mr Carter whether he still had the computer containing the email communications with Mr Dutton but he said the "computer is in the tip somewhere... I bought another one since". This proposed change is not important of itself. I have set out the relevant material to demonstrate the significant unreliability of Mr Carter's recollection, for whatever reason. The site is changed and the second proposal put to Council 76Baycorp had exchanged contracts for the purchase of the Maria River Road Property in March 2006. In substance, the contract was an option and followed a handwritten informal option signed in January 2006 with one member of the family who owned the property. For reasons that do not matter, Mr Carter decided he would look for another site. In the result he agreed to buy the 125 acre block next door. The first deed of option over the Shoreline Drive Property was executed on 1 December 2006. 77The site is about a kilometre north and east of the Hastings River, which flows southeasterly before turning east for a kilometre or so then turning south towards Port Macquarie and the sea. 78In the meantime, on 19 October 2006 Mr Donnellan, a solicitor specialising in planning law, who was retained by Mr Carter on 16 October, sent him a lengthy email concerning the first proposal. Mr Carter said that he was retained to look at issues of permissibility, namely whether the development was going to be designated or integrated. Mr Carter said that he was aware of this particular email. In it Mr Donnellan reported on discussions he had with Mr Owens in which Mr Owens agreed that caravan parks were not prohibited on rural 1(a1) zoned land if they were for permanent occupation. He also reported discussions about development for the purpose of a rural tourist facility. Mr Carter agreed that this would only have arisen because he asked Mr Donnellan to take the question up. Of course, doing so was consistent with the previous email exchange which Mr Carter said he had not received. Mr Carter was asked - "Q. Well why would you have raised it if it wasn't in your mind at the time? A. I have no idea. Q. Well one answer is, because it was raised by the emails to which have been brought? A. I've got to tell you, I don't remember those emails at all and I don't remember anything about rural tourist [facility] but I know this letter and I had not noticed "rural tourist facility" in there before. I've never seen this before." Mr Carter agreed that he alone gave instructions to Mr Donnellan and not Mr Dutton. Amongst other things, Mr Donnellan pointed out that, according to Mr Owens, "there are some big issues raised by your proposal which will have to be addressed". His email concluded - "In all the matters where I have had consultation with the council officers beforehand, the developments have sailed through. We should at least give consideration to whether that might be a good approach with your's once we can be certain that we have a kind of development that can be approved under the planning instruments. So far, I think it can up to a point. A bit more thought needs to be given as to how it might be taken beyond that point." 79Mr Carter agreed that he understood from Mr Donnellan's email that there was no guarantee that his proposal would be approved. 80Mr Carter agreed that he entered into this option to acquire the Shoreline Drive property without any advice from Mr Dutton or Mr Donnellan as to the likelihood of obtaining development approval in respect of it. He said, however, that because he believed he could get development approval for the adjoining Maria River Road Property on the basis of Mr Dutton saying "I can get you the development approval you want" as to that land, he could rely on the assurance because the Shoreline Drive Property adjoined it. I accept that Mr Carter believed he could obtain approval for his proposed development since, obviously, he would not have proceeded. However, I do not accept, as I have already stated, that Mr Dutton gave any assurance of success. 81A proposal dated December 2006 was prepared by Mr Carter for a SEPP21 (caravan park) development for the Shoreline Drive property, proposing 441 sites for moveable dwellings for permanent occupation (the initial second proposal). He said that this was the same document he had previously given Mr Dutton, the only changes being the address, the number of the sites and a new map of the layout. The new document contained the same assurances from the directors as the first proposal as to the involvement of Baycorp and "specialist input from various consultants and qualified experts". Mr Carter said these assertions were correct. Mr Dutton's name had been added because it was agreed that he would do a flood risk assessment. Another significant addition was the list in the Table of Contents of the names of the consultants who, on the face of it, had prepared or contributed to the annexures. Mr Carter said he had himself approached these experts to obtain their input. As it happened, however, Mr Carter said, "none of these [listed] consultants were in it ... [except] for Mr Dutton ... and [as to] the sewerage system and the desalination plant". Mr Carter said that he had contacted the consultants and met with them and then referred their details to Mr Dutton for him to make the decision whether to retain them for the purpose of the development application. 82Mr Dutton said (and Mr Carter does not dispute) that the new report was delivered to him by Mr Carter on or about 4 January 2007 together with a letter of 2 January 2007 enclosing what was described as a "Flood Risk Assessment - that Baycorp has undertaken thus far" together with a survey (the Edwards survey) provided by the vendor. Mr Dutton was asked to "finalise" the assessment and return it to Mr Carter. The flood risk assessment "undertaken" by Baycorp was, in fact, Mr Carter said, simply lifted from the internet. It was identical to the assessment contained in the first proposal. The Fire Assessment and Mitigation Report "that Baycorp has undertaken thus far" also needed to be completed by the nominated consultant and returned to Mr Carter. Mr Carter agreed this letter stated "the limit of [Mr Dutton's] instructions at that stage", so far as the second proposal was concerned. Mr Dutton expressed surprise to Mr Carter that the site had been changed without discussing it first with him, commenting, "it's smaller and possibly more flood prone because it contained designated wetlands". Mr Carter said that he did not understand this to be an expression of doubt about whether development approval could be obtained because - "A. ... there's one little section on the land that is about three metres depth like it's a reservoir or a pond and that is what he was referring to. The rest of the land was the same height or level as the block next door." The block was closer to the ferry crossing the Hastings River and he thought it was a better site. 83Mr Dutton said he told Mr Carter that the Edwards survey was a basic contour plan and inadequate for a risk analysis and a detailed survey was necessary. He also needed details of floor levels, access and emergency accommodation for the analysis. Mr Dutton said Mr Carter responded, "Do what you can. Maybe we can get a survey later". Mr Carter's evidence was that he did make that response but "we didn't, we got the survey straight away because that's what he wanted ... [and] he arranged it". In the result, the survey was not obtained until July and an amended survey was not prepared (query conducted) until July with an amended version in September 2007. Mr Carter had, with the Edwards survey, also provided a Planning Certificate under s 149 of the Environmental Planning Assessment Act dated 13 November 2006 stating - "The land is not mapped as flood liable, and hence is not subject to Council's Policies relating to flood liable land." Mr Dutton, however, had reservations about this statement because a portion of the land was a designated wetland. 84For the purpose of preparing his flood assessment, Mr Dutton telephoned the Council on 12 January 2007 and asked to be put through to someone who could let him know the flood level on a particular site. He was put through to someone, he said, in the engineering department (whose name he does not recall) and explained that he was working on a development on the North Shore of Port Macquarie and needed to know the 1:100 year flood level and any other flood information relevant to the site such as flood velocity and impacts. He also asked whether there was flood management plan or an evacuation plan for the Hastings North Shore Area. He was told that the projected 1:100 year flood level is 3.3 metres AHD, the property seemed to have negligible flood velocity and there was no flood management or evacuation plan for the area. I accept this evidence. 85Mr Dutton's flood assessment, dated 15 January 2007, was included in the proposal that was sent to the Council on 16 January 2007 by Mr Donnellan, whose covering letter sought a pre-lodgement meeting. It is obvious that Mr Carter had provided the second proposal documents to Mr Donnellan. He said that he did so in order that Mr Donnellan "could see what I wanted to do" and had no idea whether he asked him to produce them to the Council or that he did it of his own accord. I do not think the latter possibility could have been the case. Mr Carter was plainly anxious to obtain Council approval as soon as possible and I do not accept that he would not have known what Mr Donnellan was to do with the documents which he had provided. It is inevitable, I think, that he told Mr Donnellan to produce the documents to Council. 86The flood assessment was as follows - "PREDICTED FLOOD LEVELS Hastings-Port Macquarie Council advise (pers. comm. 12-1-07) that the predicted 1 in 100 year flood level for this area is 3.3m AHD, with negligible flood velocity. It is apparent that this area is at the very edge of the Hasting River flood plain and will be only slightly affected in a major flood. Shoreline Drive and Maria River Roads The site is considered to be mostly above the 1 in 20 year flood level and local knowledge suggests that the property was only affected by poor drainage in the significant floods of March, 2001 and not main-stream flooding. SITE SURVEY The client has provided a survey by a Registered Surveyor [Mr Edwards] indicating the extent of flooding to 3.3m AHD over the site. Generally the predicted flooding is confined to the south-western comer of the property, leading up a shallow depression into the central area. The lowest natural surface level appears to be about 2.5m indicating a depth of inundation of 800mm in a peak flood event near the western boundary. [This survey, with a blue line drawn by Mr Dutton to indicate the 3.3mAHD contour, was part of the documentation.] As there is no flood flow through the property, the inundation is only by backwater at negligible velocity and not hazardous. PROPOSED SITE WORKS It is proposed to fill and regrade an area of the site to facilitate caravan park development and the associated amenities. The proposed total area to be regraded is about 12 hectares of which about 5ha is within the flood plain. It is not considered this small area of regrading or filling will impact at all on the levels of flooding or direct flood waters onto any other adjacent property. Any proposed residential areas will be sited well above the predicted flood level, on land with a minimum natural surface of 4.0m AHD. The proposed effluent disposal areas, desalination plant and all significant buildings will also be well above the predicted flood level. FLOOD WARNING It is proposed that a Flood Management Strategy will be prepared, which will give directions to all staff and residents in the event of a flood. This document will outline actions to be taken by staff to protect the facility and by residents during the flood. With the warning time possible of at least 24 hours and the fact that all residential areas will be flood free there should be no need for evacuations or for major emergency preparations. CERTIFICATION I hereby certify that the proposal, if carried out in accordance with the preliminary plans provided, will not impact upon flood levels or velocities or divert flood flows onto adjacent properties and all facilities, residential areas and improvements can be designed to be above the predicted flood levels." Mr Dutton, in effect, had done the best with what he had been given. Council considers the second proposal 87The pre-lodgement meeting was set for 23 January 2007. This was certainly known to Mr Carter. It involved Mr Reinhold (described as Mr Dutton's "assistant planner"), Mr Donnellan (who produced three copies of the second proposal) and the "Hastings Council Development Assessment Group". Mr Owens, it appears, was not present and the other council staff had not previously looked at the matter. Mr Dutton on the following day reported to Mr Carter on the meeting. He summarised the Group's attitude as "generally positive, although guarded ... [and] overall that the proposal was a large one which would place a strain on services and facilities in that area, particularly traffic". However, he pointed out that the Group had obviously not read most of the documents and were unfamiliar with aspects of it. The particular matters which were discussed were the need for detailed analysis in respect of the relevant planning instruments and requirements, specification of a suggested ratio of permanent/ temporary sites, bushfire safety, the strain additional residents would put on the ferry service requiring a traffic report and a detailed study on the need for an additional ferry upgrade. The group also suggested that attention needed to be given to evacuation during the 1:100 year flood event in which the peninsula becomes an island trapping all residents, which could "be overcome by providing a guaranteed or uninterruptible supply of electricity, drinking water, food, etc." to last for 14 days. Mr Dutton said - "I pointed out that all the residential areas were above flood level and substantial facilities, such as a medical centre, shop, emergency backup would be available and no evacuations should be necessary. It was stated that more work was needed on the Flood Assessment but I pointed out there was no overland flow and that flooding was a backwater in this area. Flood Management Plans would be prepared and enforced." Other matters raised were - ● Environmental impact statements, flora and fauna studies, a full site soil assessment including an acid sulphate soil plan of management, an environmental management plan and maybe further specialists reports will be required. ● The report on the desalination plant contains little in the way of management procedures, easements will be needed, pipeline to reach the river, the visual amenity of the pump needs consideration together with possible use of ground water. ● Power grid capabilities. ● Stormwater management plan is required. ● Water balance report for disposal of effluent. ● A full survey for the council and also for many of the plans, including the stormwater management plan and the acid sulphate soil management plan. ● Boundary adjustment, internal road widths, parking areas, site layout. ● Objections from the existing North Shore Community which, on a large scale, may make it difficult politically to gain approval, requiring consideration of possible options such as offering community improvements etc. ● Whether the proposal was a Major Project under the SEPP. Mr Dutton concluded his letter as follows - "Although this list looks intimidating it is about what we expected for such a development. We knew that there would be a great deal of reports necessary and that there would be additional costs involved with keeping council happy. A development of this size does not gain approval without a great deal of scrutinizing from council and the public. However, that is not to say that the process will be impossible. I believe that your application is approvable, but I also believe there will be much work required and some substantial costs involved before approval. We should await the minutes of the meeting and begin to address the issues raised. A lot have been covered by your documents but missed by council and need to be emphasised. You could obtain a total site survey (I can arrange) and begin the boundary adjustment process and have a look at the ferry, bushfire and effluent disposal issues. We will look at the legislation and planning issues." 88Mr Carter's evidence about this letter was -- "Q. You understood that what [Mr Dutton] was saying to you was that the council may very well not approve [the application] because of the difficulties politically from the North Shore community? A. No, I understood that there is a whole lot of issues to be done and it is approvable and if you spend the money you will get approval. That is what I understand. That is what I understood reading the letter." In my view, it is inescapable that this letter would have conveyed to any sensible reader that, although Mr Dutton thought that the development would be approved if all the work he specified was done, he did not suggest that, even so, approval was a certainty. Mr Carter said the effect of Mr Dutton's report was, "Regardless of what the Council says, we believe we can get development approval for you" but this is not a reasonable interpretation of the letter. 89As part of the chronology, I should mention that, on 23 January, Mr Dutton and Mr Reinhold went to the site and inspected it. 90Mr Donnellan reported to Mr Carter on 29 January 2007, concluding his letter with a pessimistic appraisal of the situation. Although "satisfactory solutions to most of the issues can be proposed", the proposal "was not looked upon with anything which could be identified as favourable by the Council's planners", making a distinction between the attitude of the technical staff on the one hand and that of the planners on the other. As to the latter's view, Mr Donnellan said - "... [We] foresee that because they say that they see this area as being suitable for rural use, they will be unlikely, however meticulously the technical problems are addressed, to support the application. Their approach seems to me that this kind of development is unsuitable for this particular area and it would give rise to intractable amenity problems. The second difficulty that we can see is that, even if the Council officers were to support the application, there is the potential for large scale opposition from the residents based upon interference by the development with the amenity of the area through the increased burden on the ferry system. This is in large measure a political dimension to the development proposal but, in our view, it is in equal measure, an amenity issue with the ferries that is not going to be easy to address satisfactorily ... [If the matter went before the Land and Environment Court on appeal ... the inadequacy of the ferry access, which does not have a ready solution as far as we know, and the interference with the amenity of the area that the increase from this development would cause, being fatal to the appeal." Mr Donnellan suggested that Mr Carter should undertake a cost benefit analysis - "... [Are] the potential benefits from the development worth the risk of anything up to $200,000 to $250,000 in preliminary expenses with some prospect, but no guarantee of success worth it?... I would recommend that you have a discussion with Mike Dutton, who seemed to me to leave the meeting yesterday with his optimism only slightly dimmed ..." 91Mr Carter agreed that this letter was not good news but he did not go back to Mr Dutton and ask him what he thought of Mr Donnellan's opinion or get an assessment of the chances of getting approval. Mr Carter said that he decided to go ahead because of Mr Dutton's letter. 92On 6 February 2007 Mr Owens forwarded the minutes of the pre-lodgement panel meeting under the cover of a letter in which he pointed out that the panel was not the determining authority and did not bind the Council. Mr Dutton forwarded the minutes on the following day, commenting - "... major issues are the ferry, effluent disposal, evacuation? [sic] flooding. I don't think these are insurmountable if we can analyse the ferry issues and get council to accept some contribution towards the operation or physical upgrade of it. All the other issues can be tackled one by one by your experts or my local. I do think we need a detailed survey, so we can plot the proposal on it and convince council of its bona fides." 93The minutes are in a somewhat different form to Mr Dutton's summary of the meeting which he had sent to Mr Carter but the differences do not strike me as presently significant except for the following note - "Major issue of access and remoteness for such a large development. Dependence on, and overloading of ferry capacity, make it unlikely that the proposal would be supported by staff or approved by council". This passage states more starkly than Mr Dutton's letter the negative views of the Group. After sending the minutes, Mr Dutton spoke to Mr Carter about evacuation. 94Mr Carter said at first he did not discuss these minutes "at all" with Mr Dutton. Later, he said that he had discussed "the existence of the letter and could he fix these things and he said 'Yes'" but he did not go through each paragraph. He explained that the reason he had not mentioned any discussion about these minutes in his affidavits was that Mr Dutton's affidavits were extensive with hundreds of exhibits and he was told, in effect, to limit his narrative to the exhibits that he thought were relevant, which is what he did. It was pointed out to Mr Carter that Baycorp's case relied essentially on what was said to be Mr Dutton's assurances to him and that what those assurances were, the form which they took and when they took place were central to the case. He said, "And they're the ones I covered". This was the first report relating to the proposed development at more than the level of an informal discussion and one which, in substance, indicated that approval was, to say the least, at risk. Mr Carter agreed that this assurance was at the centre of his case and was an assurance given at a vital time. I asked - "Q. But you tell me that you had overlooked it at the time when you made your affidavits or disregarded it? A. I disregarded hundreds of items. Q. I understand that because some are important and some are not, you have to make a choice. A. That's right. Q. But what would have led you to the view that this assurance, the assurance following this knock back, these minutes, was not important enough to put in your affidavit? A. Because Mr Dutton lodged a development application based on all of this and it's his job to know what he's doing, so I have to understand that, okay, he's lodged the development application. If he thought this was - why did he put a development application in? That's how I think about it." This evidence is unconvincing. 95Mr Dutton's view about the problem of evacuation raised by the Council's officers was that there had been no detailed survey done as to the flood levels over the Maria River Road and the best he had were the plans included in the HRFS, which were stated to be approximations and based on aerial photographs and not surveys. He considered that a survey was essential to determine if or when road access to the north would be cut off in a flood. He thought the road access could be improved where necessary. 96As negotiations with the Council continued (outline below) the question of evacuation became increasingly important, with the Council officers expressing concern that flooded roads might prevent safe evacuation in the event of a 1:100 flood event, a fortiori in a PMF. The evacuation problem was discussed, as Mr Dutton recounts, with Mr Carter shortly after 7 February 2007 - "Mr Carter: I am happy with your reports. I will cover any evacuation requirements by arranging helicopters to be available.' Mr Dutton: Council and the SES are unlikely to accept helicopters as the main means of evacuation. Boats or road access will be preferred.' Mr Carter: No, helicopters are the best option. The others are too costly.'' 97Mr Carter agreed that the idea of using helicopters for evacuation was his but said that he made it very much, perhaps a year, later. (However, attached to the proposal was a letter obtained by Baycorp from Port Macquarie Helicopters of 23 February 2007 concerning availability of helicopters and guidelines relating to helicopter landing sites.) He agreed also that Mr Dutton's negative response was to the above effect but he denied the balance of the conversation attributed to him. In that part of his affidavit dealing with Mr Dutton's account of the conversation, he flatly denied "these conversations ever took place". He said in evidence he meant to deny only that the conversation ever took place with "those words". I do not believe this explanation. I accept Mr Dutton's evidence on this point. At all events, what was described as a "No Evacuation Plan" became part of the development application lodged on 22 March 2007 (see next paragraph) envisaging the use of helicopters to fly in food, medical supplies and emergency requirements. It stated that the helicopter pad was for emergency use only. Country Energy had also advised that "power supplies are not interrupted on the North Shore when the Hastings River floods". Mr Carter had inserted this plan in the proposal. Of course, the viability of this suggested approach depended on a safe refuge being available on the site in the event of flooding of the roads. This became the most crucial issue in the trial as the evidence unfolded. 98After Mr Carter received the minutes, the development application was prepared by Baycorp, with the only input of Mr Dutton being the flood assessment. On 22 March 2007 the application was duly made under cover of a letter from Mr Reinhold which briefly described the proposal, noted that environmental, social, economic and regional factors had been taken into account and properly addressed together with protection of the surrounding environment. The letter referred to the relevant LEP and the SEPP21 - caravan parks. It was submitted that the proposal was permissible under all the relevant legislation and that it was approvable under the legislation as it stood, requesting approval as soon as possible. 99On 5 April 2007, Mr Dan Croft, the Council's Development Control Planner, responded with a "preliminary view" which strongly recommended withdrawal of the application, in the absence of which it would be likely to be recommended for refusal. There were 21 concerns and deficiencies none of which, significantly, concerned flooding or evacuation. On 11 April 2007 Mr Dutton sent a letter of advice which dealt with each of the 21 points which had been raised. It is fair to say, I think, that this letter implied, at least, that the matters raised by Council were capable of being addressed at least in principle (though the outcome of the necessary further reports could not of course be predicted with any certainty) and thus, that the Council would be ultimately satisfied with the information provided. 100On 16 April 2007 Mr Carter emailed Mr Reinhold, in substance to inform him of the matters to which he was directing his attention and Dex was instructed to address what Mr Carter described as the town planning issues as distinct from those which concerned the site itself. On the same day Mr Reinhold on wrote to Mr Croft responding to what he described as the "request" for additional information and seeking an extension of 14 days from 19 April 2007 to enable the material to be provided. He then dealt with the issue of whether the project was a caravan park rather than a manufactured home estate and indicated that the other matters were being attended to, one way or another, with further reports being obtained as stipulated. Mr Carter was aware of this letter. 101On 17 April 2007 Mr Dutton sent an email to Mr Carter seeking particular information about the use of particular lots or sites to support the argument that the development was a "caravan park" or, perhaps, a "rural tourist facility". And added the following distinct matter - "We still think that you need a more detailed overall survey and plan of the development which we could provide as per a couple of examples attached. The plan you have at present is not detailed enough to gain approval. We have been asking since we started on this to arrange a detailed survey and prepare a proper plan at a scale of 1 to 500 and eventually be more detailed down to 1 to 200. We could still arrange that work." Mr Carter, despite the recommendation of the Council, did not withdraw the application but decided to press ahead. He went about obtaining the reports and assessments which the officers had identified. 102On 24 April 2007 Mr Croft extended time for compliance with the Council's requirements by a further two months. In substance, Mr Croft took note of what had been proposed and implied that this appeared to address the issues that had been raised. However, there was still an outstanding issue as to whether the proposal be regarded as a caravan park or a manufactured home estate with the latter description being regarded as the more appropriate. Mr Croft repeated the recommendation that the application should be withdrawn because of the likely recommendation for refusal. 103On 26 April 2007 Mr Reinhold wrote to Mr Carter discussing the letter of 24 April 2007 from the Council. He referred to Mr Croft's advice that the proposal be withdrawn and commented - "However, if there were any real grounds for refusal at this point, it is my opinion that council would have already presented them and refused the proposal. At this point we need to build a case, giving the council no cause of refusal. If the proposal is refused it can then be proven in the Land and Environment Court that there were no grounds for refusal." He then dealt with each of the points mentioned in the Council's letter and recommended particular steps be taken, which appear to address the problems in an adequate way. He concluded his letter by making the point, "Hastings Council quite obviously does not want this proposal to be approved". He suggested, that Baycorp should make it clear that it had "the resources and the determination to force the issue if need be [to make] Council realise that if they cannot find a legitimate reason to fail this application then they will have a significant battle on their hands if they refuse ...". He added - "Much of their actions at this point will have concern [sic] towards building their future case and we must act appropriately. Everything we submit should be first assessed based on its future value in case we are eventually forced to gain approval through the courts." 104On 27 April 2007 Mr Reinhold wrote to Mr Croft taking up, in particular, the question whether the proposed development was a caravan park when it contained both caravans and manufactured homes and submitted, after some development of the argument, that SEPP36 - manufactured home estates was immaterial. It is not disputed that if, indeed, the proposal was a manufactured home estate, it was not permissible under the applicable zoning so this issue was an important one. In this respect, it appears that Mr Carter relied on Mr Donnellan to make appropriate submissions to convince the council that SEPP36 did not apply. 105It seems that Mr Carter regarded the letter of 26 April 2007 from Mr Reinhold as an assurance that Dex would be able to get approval for the development application. He agreed, however, that, as the letter itself stated, there were a significant number of outstanding reports and information that remained to be gathered for the purpose of the application and given to Council. Despite this, Mr Carter placed considerable weight on the opinion expressed by Mr Reinhold as to the likelihood that the Council would have already presented real grounds for refusal if they were present. Some weight would reasonably have been placed on this omission, but it is important to note that the comment was made a propos a preliminary review of the application. Furthermore, the Council's letter of 5 April 2007 had pointed out that there had not been a detailed assessment by the relevant technical staff, nor had the proposal been advertised and that the detailed assessment and advertising of the application would be likely to result in additional concerns. However, even at face value, this could not be regarded as expressing more than an opinion. It was in no way a guarantee that approval was inevitable. Indeed, the letter ended with a suggestion (as to legal proceedings) which assumed that refusal might occur. 106On 16 July 2007 Blackcreek Engineering Surveys prepared a full survey of the site which enabled the extent of flooding, existing wetlands and other features to be plotted. An amended survey was prepared on 4 September 2007. Of importance was that it demonstrated a significant portion of the site was above the PMF. 107Returning to the chronology, on 24 July 2007 Mr Reinhold wrote to Mr Croft dealing with the material that had been provided to answer the 21 points previously raised by the Council, with the two outstanding reports being well underway. He requested assessment of the application be recommenced in the meantime to save time and asked how the Council would like to proceed. Mr Carter agreed that he had seen this letter at about the time it was sent. On 16 August 2007 the engagement agreement (I accept) was again sent to Mr Carter, addressed to his post office mailbox. Two invoices dated 16 August 2007 had been sent to Baycorp at Mr Carter's post office box address. Mr Carter agrees that he received these invoices but not the agreement which was addressed in the same way. I do not accept his denial of receipt. 108On 20 August 2007 Mr Croft wrote to Dex dealing with the requirement of advertising the application and the information which members of the public were entitled to have. Mr Croft said that once the revised site plan, tree survey and additional fees were received the application would be publicly exhibited and a detailed assessment take place. 109In early September, using the amended Backcreek survey, Mr Dutton prepared a revised site plan which had superimposed on it the 1:100 flood level plotted at 3.3m AHD (the height he had obtained from Council early in the piece) and, on another such plan, the extreme (PMF) flood level at 6.4m AHD (derived from the HRFS). The first showed a substantial area of the site (where it was planned to place the manufactured homes) was above the 1:100 flood level, whilst the second showed that, in a PMF, the administrative and other buildings would, with some filling, be placed on safe ground (later calculated at some 12,000m²) and thus provide a refuge in such an event. It should be noted that, at the time of its receipt, the question of flooding - though live - had not been the subject of significant criticism apart from the issue of evacuation. Mr Carter agreed that he consulted with the architect when the site plan was being drawn up and approved it before it went to Council some time before 26 September 2007 when the development application was advertised for public exhibition. 110On 9 November 2007 Mr Croft wrote to Dex advising that the exhibition of the application had been completed and a substantial component of the assessment task had been undertaken. He repeated the previous recommendations to withdraw the application, pointing out that "significant community opposition to the proposal and major issues of concern, indicate that the application is likely to be recommended for refusal by council staff." In the event that the application were not withdrawn, a number of points were specified to provide a further opportunity to support the application. Mr Croft noted that the written objections received to the proposal, in substance, had repeated the issues previously raised by Council staff. These concerned traffic impact, inadequacy of the existing ferry network, social impact due to the isolated nature of the site and the elderly demographic targeted as future residents being more likely to require medical and other health related services for which the proposed clinic and bus service was not a sustainable approach, the leasing arrangements and affordability of dwellings, inadequate detail on crime risk/prevention and general safety measures, insufficient details on logistics of the proposed bus service, problems with sewerage management including design and capacity, stormwater management, water supply and protection of flora and fauna together with a concern about noise impacts. Mr Croft raised the permissibility problem once more, repeating the Council's view that the development was a manufactured housing estate rather than a caravan park and suggested that legal decisions should be provided if it was desired to press the argument already outlined on this matter. 111For the first time, flooding was raised as a significant issue - ● None of the proposed site is on land above the extreme flood height [ie PMF]. ● Safe evacuation to flood free land is essential and, although a narrow ridge of land adjoining the property is flood free, no refuge facilities exist at this location, so that emergency evacuation in hazardous conditions could be required which would "place an enormous additional strain on the emergency management services and risk to life'. ● Vehicular self-evacuation would only be an option up to the early stages of flooding before ferry services closed down. Those services also needed to cater for other communities. ● Flooding beyond 1:100 flood level would leave substantial numbers requiring emergency evacuation, exacerbating the evacuation requirements from other isolated communities. ● Public health considerations required fail safe basic utilities including power, potable water supply and sewerage facilities. ● Provision of emergency medical evacuation is necessary and use of a helicopter is inadequate. ● A "no evacuation plan" strategy is insufficient to address the shortfalls in emergency management and the shortcomings of private flood plans are referred to the Floodplain Development Manual and in Shannon Pacific v Minister for Planning [2007] NSWLEC 669. Generally, Mr Croft observed - "The abovementioned points indicate that the proposal is unsuitable for the site and significantly conflicts with the public interest. It is likely that the application will be recommended for refusal. It is recommended that the application be withdrawn." He pointed out that, if Dex were dissatisfied with this advice a request could be made to the Council's Development Assessment Panel for determination at any stage. 112Although Mr Dutton's flood assessment had not been amended to reflect in text the effect of the site plans, those plans were certainly with the Council. It is somewhat surprising that Mr Croft made no reference at all to the apparent demonstration that a substantial area of the site was above PMF, directly contradicting the first of the bullet points set out above. The plans both reference the HRFS. No doubt further analysis was necessary and provision of the site plans did not by any means overcome all the flooding issues. But they showed that, at least in one crucial respect, the nature of the question had been misapprehended by the Council. 113Mr Carter accepted that the letter represented "a big setback", focusing on the significant community opposition to the proposal which would put political pressure on the Council to refuse the application. Mr Carter understood that this was not anything which Mr Dutton could do anything about. However, he said, Mr Dutton explained to him that the Council could not refuse an integrated development on the basis of public opinion. Even so, Mr Croft obviously regarded public disapproval as material. (The true significance of an integrated development was not the subject of evidence and, in light of the issues, is immaterial. I do not propose to discuss it.) Mr Carter's response to the inadequacy of the ferry upgrade, which was to be undertaken by the Council at all events, was that another ferry could be provided and he started to look into that matter. 114Mr Carter said that this letter made him doubt whether Mr Dutton's optimistic opinion was right and this, he said, led him to ask Mr Dutton questions along the lines "Are you sure we are going to get development approval?" and the answer was always "Yes I am very confident". He said in substance the same things were said to him by Mr Reinhold. Mr Dutton and Mr Reinhold deny any such conversations. I accept their evidence on this point. Indeed, Mr Dutton said, following receipt of Mr Croft's letter he said to Mr Carter - "The three biggest issues which are the most difficult are the traffic on the ferry, the social impact and the evacuation plan. These issues are outside Dex's control. The council is very negative and does not like what has been proposed so far. Do you still want to continue with the project or not?" He said Mr Carter told him, "Yes. We will do our best, if it is refused I will take it to the Land and Environment Court." 115Mr Carter emphatically denied that Mr Dutton ever said or suggested to him on any occasion that he should withdraw the development application. This is not quite a denial of what Mr Dutton claims he said, although that perhaps carried the implication that withdrawal was advisable. In light of my view of the relative reliability of Mr Dutton and Mr Carter, I consider that Mr Dutton's account is more likely to be true, especially since it is an obvious question having regard to the refusal. At all events, given the refusal (and the consistently negative attitude of Council staff to the development) this was a question which any sensible person in Mr Carter's position would have posed for himself or herself. (See paragraph 196 of Mr Dutton's affidavit saying that he made the suggestion in November and December 2008 prior to the DAP meeting on 11 December 2008).) 116There was further conversation about the need to go back to the consultants advising on the traffic issues and the social impact assessment but Mr Carter denied that this was suggested by Mr Dutton. Since, again, the purpose of the discussion was to go through, as I think, Mr Croft's letter the logic of events suggests that indeed Mr Dutton did raise these questions at this time. 117Mr Dutton told him that Shannon Pacific related to a very different site, which was in a designated floodway, prone to flooding in a 1:10 event at high velocity, almost entirely a designated wetland and adjacent to the Macleay River with no flood free areas. He said they had further conversation to the following effect - "Dutton: Why don't you consider donating a boat to the SES who can operate it from the site?" Carter: I prefer my idea to use a helicopter. I have already made arrangements for it. What is wrong with that idea? Dutton: PMHC doesn't like it. There also needs to be another means of emergency medical evacuation, as a fall back position. Carter: Try it again. Helicopters should be acceptable and in addition will provide an emergency control centre for the SES." 118The letter of 9 November, as is obvious, was of considerable significance. Given Mr Carter's role, it seems inevitable that he would have given it the closest attention and he discussed the problems identified since, of course, if the application were to succeed, they needed to be addressed one way or another. Even accepting Mr Carter's protestations of ignorance about the whole process of obtaining development approval, I do not accept that he simply left it entirely up to Mr Dutton without, at least, ensuring that he was aware of the issues and participated one way or another in their resolution. Indeed, Mr Carter went so far as to say that he never even heard of Shannon Pacific until October 2009 or 2010 (although it seems clear from his May 2011 affidavit that it was amongst the documents which he obtained and examined when he retrieved the files from Dex in January 2009). He said that he took no notice of the reference to the case in the letter and did not know what it meant and did not ask Mr Dutton about it. Overall, Mr Carter's apparent insouciance about this letter and the appropriate response to it is unbelievable. 119On 15 November 2007 Baycorp invited residents in the North Shore area of Port Macquarie for a meeting about the proposed development, which was to be held on 23 November 2007 in Port Macquarie. The agenda, which was prepared by Mr Dutton, states (plainly relying on the Blackcreek survey) - "1:100 YR: does not affect a single site in the park, restricted to low lands. EXTREME: the site includes some of the Extreme Flood - free land on the North-Shore (just about all the rest is in the National Park). Emergency Facilities include a Heli-Pad (only to be used in medical evacuation or emergency food drops), Rural Fire Station, shelter refuge in Extreme Flood scenario, food in General Store, a Generator, fresh drinking water, toilet facilities, etc. In a flooding situation Macquarie Gardens could be used by the North-Shore community as an evacuation refuge." 120By 22 November 2007 Dex had prepared a further plan which showed the extent of the 1 in 100 year flood on the site (to level 3.3m) as well as the extent of the PMF (to level 6.4m). This information was added to the base plan prepared in September to which I have already referred. Two site maps were prepared, one showing the 1 in 100 year flood level and the other showing the extreme flood level (or PMF). The former showed that, in substance, all the residential sites and collateral buildings including a helicopter pad would be above the flood level, whilst the latter showed, although the residential sites would be inundated, (with some filling) the proposed general store, bowling greens and club house, swimming pool and gymnasium, administration and reception building, fire station, helicopter pad and a large parking area would be above the PMF. These were used at the public meeting at which, although Mr Carter was present, he remained in the audience, Mr Dutton playing the leading role in presenting the development application to the members of the public who attended. Mr Dutton says that either he or Mr Reinhold gave Mr Carter a copy of the maps before the public meeting on 23 November 2007. Mr Carter, however, denied that he had ever seen this plan before October 2010 after the amended statement of claim was prepared. He agreed that Mr Dutton had told him that the survey showed that the land was not totally inundated in an extreme flood situation. Mr Dutton told him infrastructure buildings were above the flood line and people could be evacuated there and Mr Carter agreed he worked on that basis although he did not see the plan. Mr Reinhold, relying on his contemporaneous notes, said that on 22 November 2007 he and Mr Dutton prepared the agenda and called Mr Carter to give him a rundown on what was to occur, a conversation which took about 20 minutes. Although he expected Mr Carter to be at the meeting to represent Baycorp, in fact this was done by Mr Green. Later, he asked Mr Carter where he was and was told, "I was there, I was in the crowd". Mr Reinhold's memory as to when this conversation occurred was, he thought, in the latter part of the process, but this was "a little vague" he said he was not sure of the exact words. Taking all this material together, especially the fact that the site maps were produced at the meeting, I do not accept that Mr Carter did not see them for almost another three years. 121On 19 December 2007 the Council made additional comments by email to Dex. These raised issues concerning the traffic assessment and a suggestion relating to water supply. 122On 25 March 2008 a detailed response was made by Dex to the Council letter of 9 November 2007. 123It was submitted that, for the reasons given, all the issues which had been raised were substantially answered. So far as flooding was concerned, it was submitted that this too was answered when Mr Dutton's response was considered. Mr Dutton pointed out, amongst other things, that the HRFS showed the property to be one of the only areas on the North Shore to be substantially above the 1:100 year and Extreme Flood Events, that the Study showed that the Extreme Flood Level (ie, PMF) on site was no more than 6.4 m AHD and that, contrary to what was said in the Council's letter, areas of the proposed development were one metre above this level and, as well, the main facilities and administration buildings could be built up to be well above 6.4 m AHD. Maria River Road was also above the PMF. Mr Dutton concluded that the development "could obviously be used as an emergency refuge for other North Shore residents whose own homes are well below the Extreme Flood Event, being all houses on the North Shore". Mr Dutton then undertook a detailed discussion of the nature of the probable maximum flood on the relevant catchment areas including the possibility of a peak ocean (tidal) level of 2.2 m AHD, taken again from the 2006 Study. Mr Dutton therefore took issue with the Council's assertion that "none of the site is on flood free land", referring in particular to the s 149 Certificate and the 2006 Study. He noted also that there is no flood planning level for caravan parks in the Council's Policy but that for manufactured homes was set at 1:100 year flood, with no freeboard, whilst it would be possible on this site to provide at least 0.5m of freeboard from the 1:100 year flood level of 3.3m AHD. Mr Dutton concluded this part of his response - "In this instance, however, it is obvious that the fact that there are large areas of land on the site and the adjacent road which are above the Extreme Flood level and along with buildings and facilities such as the general store, health club, etc. mean that an excellent emergency centre can be created not only for residents of Macquarie Gardens [the name given to the development] but for all other North Shore residents is a positive aspect of the proposal and one which council should encourage to fruition. The time needed for use of any emergency facilities in the peak period of a major flood is unlikely more than seven days, which can be easily catered for." Mr Dutton then went on to discuss the flood free evacuation issue, dealing with failsafe utilities and services, emergency medical evacuation and an evacuation plan (which he suggested should not be required following his earlier explanation as to the availability of high ground). He submitted that the issues raised by the Council as to all these matters had been satisfied. 124Mr Dutton's took up in detail issues of stormwater management, water supply, fauna and flora, noise impacts, acid sulphate soils and the golf course, all of which Mr Dutton submitted should be regarded as adequately dealt with. In this letter, Mr Dutton also dealt with the previous email of 19 December 2007 and submitted that his explanations should be regarded as dealing with the matters raised, although he accepted that correction of errors in the original traffic impact study was outstanding, the new report being expected. He raised a query as to what was meant by the requirement to address emergency access and thanked the Council for a suggestion relating to water supply which, it appears, Baycorp was expected to be in a position to adopt. There had also been a meeting of the RTA Regional Advisory Committee on 16 October 2007, the minutes of which had been provided to Dex, stating the requirements were satisfied, having regard to Dex's response with four issues pending but, implicitly, capable of being satisfied. Mr Dutton also provided an amendment to the site plan in response to the various issues raised and explained how the amendments responded to those matters. 125(Mr Dutton said that the information in the letter of 25 March 2008 either came from Mr Carter or was approved by him during their regular conversations between 9 November 2007 and 25 March 2008. Mr Carter agreed that during this time he and Mr Dutton had meetings every few days to discuss the development. Mr Carter said that his only involvement was that Mr Reinhold printed out "seven or eight or ten pages" and showed it to him, that he sat at a desk in the office and "just sort of flicked [through] a few pages and said, 'Fine' but I hadn't seen the whole letter, no." He said that he did not ask to see it because it was concerned with town planning issues: "It was not my job". As will be obvious from the subject matters I have summarised above, the letter overwhelmingly concerned matters other than permissibility and the like. In his affidavit which deals sequentially with Mr Dutton's affidavit as to the sequence of events at this time, Mr Carter does not make any response to Mr Dutton's assertion. Mr Carter said that he had not bothered to check the exhibit to which Mr Dutton referred and therefore did not bother to respond. Given the significance of this matter in the general scheme of events, and the likelihood that such an important letter would have been discussed with Mr Carter, particularly as it needed to cover matters which were within his responsibilities as project manager of the development, I find myself unable to accept Mr Carter's evidence on this point.) 126On 13 June 2008 Mr Croft informed Dex that Council staff were still to finalise the report on the application but repeated his earlier indication that it was likely the application would be recommended for refusal. The development assessment panel (DAP) meeting, which was the next procedural step, would permit Dex to present the case and respond to the recommendation. On 16 June Mr Dutton emailed Mr Croft (copying Mr Carter) about whether the proposal was a caravan park or a manufactured home estate and reiterated his view that there were no outstanding issues (including flooding) which were "overriding or insurmountable and would prohibit approval". He contended that all the issues had been adequately assessed and mitigated as part of the proposal or could be overcome by conditions. On 17 June Mr Croft responded to this email, amongst other things, expressing disagreement with his interpretation on permissibility and pointing out that regardless of this issue, it was likely that the application would be recommended for refusal on four other reasons. On 25 June 2008 Mr Croft informed Dex that, having regard to judgments of the Land and Environment Court which had been brought to his attention, he did not "believe that a refusal can now be sustained on permissibility grounds." 127On 10 July 2008 the Council's officers' report to the DAP recommended that the application be refused. Nineteen reasons were given for this conclusion including an unacceptable social impact, largely derived from its physical isolation, there was no satisfactory demonstration that the existing vehicular ferry servicing the North Shore would not be adversely impacted or it would not result in unmanageable transport demands on road infrastructure; it was contrary to SEPP21 - caravan parks and SEPP71 - coastal protection and a number of clauses of the north coast regional environmental plan; it was incompatible with the 1(a1) rural zone objectives under the Hastings LEP as well as with the North Shore's built and natural environments; it failed to demonstrate that there would be no adverse impacts on aboriginal cultural heritage and significant archaeological sites; or that the development could be adequately serviced in an emergency without additional costs to the community; no detailed flood assessment plan had been provided as required by Council's policy and the government's Flood Plain Management Manual, especially with regards to evacuation, no certain route of the water supply rising main was supplied; the application provided insufficient information about the proposed additional vehicular ferry; it failed to adequately address the impact of climate change; failed to provide appropriate modelling to ensure no adverse pollution to receiving waters; and the acid sulphate soils management plan was inconsistent with the relevant Manual (reasons 18 and 19 were simply rolled up versions of the other objections). Mr Dutton sent a copy of this report, which he obtained from the Council website (apparently the usual form of notification) by email to Mr Carter. On Mr Carter's instructions, Dex obtained a deferment of the DAP's consideration of the application. Mr Dutton said that, in August 2008, he asked Mr Carter whether the application should be withdrawn given the recommendation that it be refused. He said that Mr Carter replied that if it were refused he would take it to the Land and Environment Court. Mr Carter denied this conversation occurred. Again, it seems to me the question was an obvious one and my view of relative reliabilities leads me to accept Mr Dutton's account. About this time Baycorp distributed residents a brochure entitled, "All Green Residential Resort" in an attempt to win public support. 128On 8 August 2008 Mr Dutton had completed an updated and amended flood assessment report combining comments on flooding which had been made throughout the process into one document and emailed it to the Council together with two documents prepared by the traffic experts. This response started by taking up the extreme flood level (PMF). He referred to the HRFS which showed "that the Extreme Flood level on site is not more than 6.4m AHD", citing the source of this information. In his evidence, Mr Dutton explained how he had derived that number rather than the 6.7m later stipulated by the Council. He pointed out, by reference to the attached flood contour plan that areas of the park are one metre above the extreme flood level and the main facilities, administration buildings etc. could be built up to be well above the 6.4m AHD extreme flood level. Mr Dutton then went on to discuss the concept of the extreme flood or probable maximum flood, the probability of its occurrence and the conditions required for it by reference to the Hasting River Flood Study pointing out that, for various reasons, an extreme flood would be extremely unlikely and that the HRFS did not appear to consider certain relevant outflows. He discussed the HRFS allowance of 250mm for greenhouse related sea level rises which was included in the "upper limit" design flood envelope which, according to the Study, "should be based on peak flood levels generated with a design 100 year occurrence catchment flood occurring concurrently with a peak ocean level of 2.2m AHD". Mr Dutton pointed out that, as suggested in the Study, if ongoing research indicated an ocean level increase of greater than 250mm by 2040, flood levels could be adjusted and stated - "Given that all dwellings are moveable with easily adjusted floor levels and other main buildings are three metres above the 1:100 year level, the impact of very slight and gradual sea level increases over future decades is minimal." Mr Dutton's response continued - "We certainly reject Councils statement that none of the site is on flood free land. The Sect 149 Certificate issued by Council for this property states that it is flood free! The 2006 HRFS identifies the site as (very) Low Hazard - Flood Fringe (even in an extreme flood), which your Flood Policy of 2007 suggests is entirely suitable for a Caravan Park. The Flood Planning Level (FPL) for Caravan Parks is not given by your Policy, however for Manufactured Homes is set at 1:100 year flood (with no freeboard), it would be possible on this site to provide at least 0 5m of freeboard from the 1 in 100 year flood level of 3 3m AHD to the floor levels of each dwelling or site. As suggested by your Flood Policy it is not usually necessary to consider the Extreme Flood event or PMF, except for critical infrastructure (hospitals, power stations, emergency centres, etc). ... The time needed for use of any emergency facilities and the peak of a major flood is unlikely to extend more than seven days, which can be easily catered for." Accordingly, Mr Dutton reasoned, with substantial facilitates above the extreme flood level available, "evacuation in the event of a major flood should not be necessary or even contemplated" and continued - "All the refuge facilities you mentioned can be provided and our client would prepare a Flood Emergency Plan as a Condition of Consent covering every area of need from warnings to movement, emergency supplies, etc. for a regular exercise and review by the Council. Such plans are common in flood prone areas such as Maitland and Kempsey". 129Mr Dutton then went on to discuss food, power, water supply and sewerage, provision of which, together with the flood free facilities could be made a condition of consent. For an emergency medical evacuation, it was argued that the availability of a helicopter for this purpose would suffice given the location and setting. Mr Dutton then pointed out that Shannon Pacific was inapplicable as it involved a markedly different site in a designated floodway, prone to flooding in a 10 year event at a depth of one metre with high velocity in a 100 year event, with no flood free areas. These responses to the flood issues are repeated, in substance, to other expressions of much the same criticisms by Council staff repeating especially the point that there was both flood free land and buildings above PMF on the site, noting also that the proposal had been assessed using the Hastings River Flood Plan, the Hastings Council Flood Prone Land Policy and the New South Wales State Floodplain Management Manual. The site plan was slightly different to the later plans which I have already referred to so far as siting of administration buildings and the like is concerned. However, it clearly showed a substantial area that was or with filling would be, above PMF level. 130Mr Carter said that during May, June, July and August 2008 he asked Mr Dutton on more than one occasion whether he thought "we will need to go to the Land and Environment Court to get development approval" and that each time Mr Dutton responded, "No, I'm very confident that we will get approval without going to the Land and Environment Court". He said that he twice asked Mr Reinhold, "Are you sure that we are going to get development approval" and he responded on those occasions, "Yes its approvable". Mr Dutton and Mr Reinhold both deny ever giving these assurances. In light of the attitude of Council staff as shown from their first communication and several times since, it would have been extremely foolish for these assurances to be given and I do not believe that they were. However, it may be that Mr Dutton said, one way or another, that approval should be given since this was his own belief. But I do not accept that he gave Mr Carter an assurance in the unqualified terms he maintains. Moreover, I accept that Mr Dutton asked Mr Carter on a number of occasions, when withdrawal was suggested, whether Mr Carter wished to do so. It is true, however, that there is no evidence that Mr Dutton told Mr Carter that he thought approval was doubtful except to the extent this was implicit in asking questions about withdrawal. Of greater significance to my mind, because of the issues about the extent of the retainer, Mr Carter's evidence to the effect about needing to be convinced that the project would be approved is the fact that he never, even on his own account, asked for a reasoned appraisal of the chances of success. 131On 11 August 2008 Dex sent the Council a letter quoting Mr Donnellan's advice in relation to bushfire management. From 15 August to 22 September 2008 the proposed development was re-advertised having regard to the deferral of the DAP meeting. 132In September 2008 Mr Dutton said that he had a discussion with Mr Carter as follows - "Dutton: The Council may not accept our flood levels or flood assessment. You should engage Pattison Britton & Associates who prepared the Hastings River Flood Study of 2006 to check and verify the flood levels, flows and impacts at the site.' Carter: I am happy with your reports which show the property is not totally affected and Council should accept that.' Dutton: We should at least meet with the SES to discuss any concerns they might have. They probably won't like the helicopter idea.' Carter: No. I think the helicopter arrangements are adequate for emergency use along with the control centre on the site." Although Mr Carter in his evidence denied that this conversation took place, I accept Mr Dutton's evidence about it. 133On 5 December 2008 Mr Dutton forwarded to Mr Carter the recommendation of Council staff to the DAP which was set to meet on 11 December 2008. It referred to the previous issues and to additional information and material provided since that time. Again the recommendation to the DAP was that the application be refused. 134On 11 December 2008 the DAP met to make a recommendation to the Council respecting the developing application. That meeting was attended by Mr Dutton together with a Mr Cuff, a lawyer engaged by Baycorp. The DAP recommended that consent should be refused. Mr Dutton said that Mr Carter told him, in effect, that he intended to appeal the decision to the Land and Environment Court. Although Mr Carter denied this part of the conversation, he does not deny having been informed by Mr Dutton of the outcome of the DAP meeting. Furthermore, it is obvious that Mr Cuff would have informed him of it. Mr Carter says in his affidavit that some time before mid January 2009 he telephoned Mr Dutton on three occasions requesting that his files be returned to him but that this was no done despite promises to do so. He says that he then went to the office and demanded the files, obtaining a disc onto which they had been transferred. He said that he then came across a proposed development site plan which had been prepared by the defendants which, he claimed, he had not seen before. He said that he was shocked because the site plan "showed the proposed development site covered in water during a "probable maximum flood" event which, he said, had never been drawn to his attention. He said that he "believed at this point of time that the development could never be approved on a parcel of land that floods". He also said that he came across the Council letter of refusal and stated - "After reading this letter and seeing the proposed development site plan, I believed in layman terms, that the proposal could never have been approved. The defendants did not at any stage draw this to my attention." 135Mr Dutton said, however, that he sent a copy of this letter immediately to Mr Carter. The logic of events strongly supports this evidence. In his evidence, Mr Carter agreed that Mr Dutton had sent him a copy of the refusal letter in late December 2008 or about that time and that it was a document in which he was "very interested to read because [you] wanted to know why the Council had knocked back the development application". He also agreed that attached to that letter was the plan which showed the PMF line. When it was pointed out to him that he had claimed these two matters caused him to come to the view that he could not get approval for the site, he said there was a third reason as I understand him, the decision of the Land and Environment Court. Mr Carter gave the following evidence - "Q. So when you said earlier in your evidence that you didn't have such documents [the reasons for refusal and the plan showing the PMF line] until October 2010, that was incorrect, wasn't it? A. No, it's not incorrect. The thing is that this plan that he's provided in here, you can't understand what it is. I now know what it is because I can look back. But you know, it's just another map to me, but I can identify it now because I have seen the big plan." I am afraid that, to the limited extent it makes sense, I do not accept this evidence. The PMF line was clear, the fact that it showed an evacuation site was available which, at all events, required infill which Mr Carter had known for some considerable time, at least by the time of the public meeting when the plans were produced, demonstrates that he must have had an input into the plan and understood its significance which was, at all events explained at the meeting. Nor do I accept it was too small for him to read. I have no doubt that Mr Carter saw the Council's letter soon after it was sent together with the site map. 136The report of the DAP to which I have already referred in respect to flooding states - "11 - The application has not satisfactorily demonstrated that the development can be adequately serviced in the case of an emergency. The application has failed to demonstrate that the proposed development will not impose an added cost to the community, especially during emergency situations. 12 - The application has failed to provide a suitably detailed flood assessment as required by Council's policy and the government's Floodplain Management Manual, especially with regards to evacuation." 137The discussion in the DAP report referred to the Dex flood assessment, in particular pointing to the areas in the site which were above the 6.4m AHD adjacent to Shoreline Drive and the fact that the main facilities would be built above the level. The DAP referred to the Council's Water and Natural Resources Division report which asserted that the site was not on flood free land because of the PMF and, accordingly, that complete evacuation would need to be considered. This, however, inexplicably did not take into account the Blackcreek survey or the site plan showing the areas which would be above the PMF and available for evacuation on site, both of which had been provided to the Council in early August 2008. The DAP report also refers to comment from the Council's Department of Environment and Climate Change which, in different language, also fails to take account of the surveys. The State Emergency Service comments also considered by the DAP, relying on the HRFS, asserts that the land is below the PMF so that occupants who are unable to evacuate by vehicle before those access routes were closed would be trapped with rescue by helicopter or boat being the only remaining option in a large event. Again, this assessment fails to take into account the material that had been provided. However, as the DAP report shows, the Council's Water and Natural Resource Division reviewed the additional information and responded as follows - "The quality of the flood impact assessment is of a poor standard and it is clear that the report has not been prepared in accordance with the requirements of the New South Wales Floodplain Development Manual (April 2005). It is equally evident that a suitably qualified flood engineer with demonstrated experience with flood assessments has not prepared this report. It appears a civil/ structural engineer has authored/ certified this report. ... The report contains simple errors, such as indicating the PMF at the site is 6.4m AHD when [Council] records indicate it is 6.7m AHD and in stating the Hastings Flood Study (2006) provisionally classifies this area as low hazard when it does not - its high hazard. In addition, the report makes claims without supporting evidence. For example, there is no supporting evidence above warning and evacuation time. The report does not adequately address climate change in accordance with the DEC guideline entitled, "practical consideration of climate change" (October 2007). Equally, there is no evidence to demonstrate the hydraulic effects of the proposed." 138Had Council asked, it would have seen that Mr Dutton had ample qualifications to make his assessment. It would also have been reasonable to ask why the 6.4m AHD was chosen (Mr Dutton's justification for choice of 6.4m AHD as the PMF level is discussed below) but, as the later report of Murray Dalton and Associates Pty Ltd shows, even at 6.8m AHD, there appeared to be ample space for onsite evacuation. As to climate change, this was indeed taken into account by Mr Dutton in terms used by the HRFS. Although it appears that the Council officers were of the opinion that the HRFS did not take into account climate change, the Study states - "This report is to serve as the foundation for development of a flood plain management plan for the lower Hastings River. It is also to provide peak flood levels that will be the bench mark reference for development assessment over the next 10 to 15 years. Therefore the peak design 1 in 100 year recurrence flood levels need to account for potential future increases in ocean levels. Accordingly, the peak flood level estimates should be derived while giving consideration to greenhouse effects as well as the potential for greater coincidence of catchment floods and elevated ocean levels... ... Therefore, an ocean level of 2.2m AHD has been adopted for the prediction of 1 in 100 year recurrence flood levels and flood extents presented hereafter." It follows that the PMF levels also take into account greenhouse effects and Mr Dutton was entitled to rely on it for that purpose. 139On 23 December 2008 the Council wrote to Dex formally giving notice of the refusal of consent for the development for reasons which were detailed on an attached schedule. 140Mr Carter decided that he would no longer retain Dex's services and consulted Mr Scott, another town planner and, on 17 December 2008 Mr Carter emailed Mr Dutton seeking a number of items, in particular an updated flood report. On 15 January 2009 Mr Dutton sent to Mr Carter the flood assessment plan (described as "Flood & Emergency Study"), adding that he was "awaiting your amended plan." Mr Carter considered that the report was inadequate because it stated that an evacuation should not be required even though the Council had sought an evacuation plan. He said that he knew there had to be such a plan because of the flooding on the block but Mr Dutton did not prepare one. The approach in the report was that, since all dwellings would be sited above the 100 year flood level there should be no need for evacuations up to that level and the administration, service buildings and gymnasium - bowling club will provide emergency refuge. It follows from my account above, that I do not accept this evidence. I am satisfied that the "no evacuation plan" with emergency evacuation by helicopter and boat if necessary was, from the beginning and continued to be, Mr Carter's approach. 141Mr Carter said he showed his new planner, Mr Scott, everything that had been put to the Council by Dex and that Mr Scott told him, "There was chance, he believed, we could get development approval if we addressed things properly". Mr Carter decided that he would lodge a further application in the name of Macquarie Gardens Limited, registered on 16 January 2009; although not a director, he owned 10.65 million of the total 11 million issued shares and he was also the funder of the new application. The company made an application in the latter half of August 2009, using many of the same consultants who had previously provided reports and assessments for the refused application. This application however was put together by Mr Scott, with much the same material which Mr Dutton had and which was ultimately provided to the Council. 142Murray Dalton and Associates prepared another flood risk assessment dated 7 August 2009 for the purpose of the Macquarie Gardens Limited development application. The assessment stated as follows - "The caravan park is on land between 2m and 5.5m AHD. The community area is on land between 3.5 and 7.0m AHD. Of the site some 9,000m2 will be filled to RL 3.3m AHD which is the 1:100 year flood level and the community area and heli-pad will be filled to 6.7m AHD which is above the probable maximum flood level. The community area to be filled constitutes an area of 12,000m2. The majority of existing natural surface for the moveable dwelling sites is above 3.3m AHD and part of the natural service for the community area is also above the PMF level. The proposed filling for the development constitutes a small proportion of the site." Although neither Mr Scott nor Mr Dalton were called to give evidence and their application was not relied on as opinion evidence, both expert witnesses referred to it and the parties seem to have regarded it as substantively material to the question whether Mr Dutton should have realised, as Baycorp claims, that approval for the proposed development could never be obtained because of the flood issues. Essentially, the Dalton assessment was put forward, as I understand it, as an example of an arguably available way of dealing with the flood issues so that, if it were patently unacceptable, this strengthened (possibly decisively) Baycorp's case. 143Baycorp called Mr Cameron, the Council's environmental engineer and Mr Croft. Their evidence did not add usefully to the material otherwise produced and I have not thought it necessary to discuss it. The expert witnesses 144The plaintiff called Mr Gary Warnes who has 40 years' experience in town planning, 20 with local government, 6 with various state government departments and then working in the private sector. His formal qualifications comprise a Land and Engineering Survey Drafting Certificate (1976), Associate Diploma in Town and Country Planning (1981) and a Local Government Ordinance Four Full Certificate as a Local Government Town and Country Planner (1982). He is a member of the Planning Institute of Australia and a founding member of the Hunter's Planners Network. There is no doubt that he has a considerable degree of expertise relevant to the issues in this case. 145Mr Michael Brown was called by the defendants to give expert evidence in relation to the planning, principally flooding issues. He has over 28 years' experience in the planning field with a number of formal qualifications including an Associate Diploma in Town and Country Planning from Charles Sturt University and Bachelor of Applied Science (Environmental Planning) Charles Sturt University. He has worked in a number of municipal councils as a town planner at one level or another. He also is highly qualified to give evidence about the relevant issues in the case. 146It is, however, fair to observe that Mr Dutton's qualifications in relation to flooding issues in particular are, by virtue of his engineering qualifications and experience, more directly focused on those issues than the qualifications and experience of either of the experts. The crucial flooding issues 147Joint reports were tendered together with the separate reports of the experts. The crucial question posed for consideration was not well drafted and each expert thought, in effect, he was answering a different question. This was later corrected. In my summary of this evidence, I have found it simpler to refer to the evidence each gave, which was also the approach adopted by counsel in submissions. The experts also gave their evidence together. This was not altogether effective, since Mr Warnes was more forceful a personality than Mr Brown, who was rather more diffident. I felt that the process was not altogether fair to Mr Brown's ability to get his point across. However, in the end, the differences between them came out clearly enough. 148A critical issue in this discussion is whether the site is liable to be totally inundated during a PMF as apparently understood by the Council but also is the position taken by Mr Warnes. If this be the case, given in that event (indeed, probably in a 1 in 100 year event) it may be no evacuation by land is practicable, the parties are agreed no development approval could possibly have been given. 149The starting point for Mr Warnes is a map (Figure 24) prepared for the HRFS showing the contours of peak flood level for the 1 in 100 year occurrence flood in rather broad terms. This map shows that in such an event, the roads leading to higher ground would be, to a limited extent, inundated. Furthermore (though not shown on this particular map), it is not controversial that the ferries providing access to high ground on the North Shore cannot be operated even in a 1:20 flood so that the roads leading south would be cut off long before the peak height of a 1:100 event would be reached. However, it should be noted that Figure 24 shows that the site together with other large areas of high ground to the north is not inundated during the 1:100 year flood. As to that area, Mr Warnes points out this high ground is predominantly contained within a nature reserve which is inaccessible and without facilities for shelter. 150Crucially, as to a PMF event, Mr Warnes says that the site would be inundated, although he acknowledges that the September 2007 site survey plan shows that the area in the south east corner of the site is above the PMF level. If this is incorrect then, as he points out, the area of course may be inundated and not available for refuge for the residents. Mr Warnes relies on a plan (Figure 1) prepared as part of the HRFS showing the extent of the lower Hastings River flood plain, which certainly includes the whole of the site as supporting the conclusion that it would be inundated in a PMF. Mr Brown, however, points out that this plan is, essentially, designed to show the scope of the Study. Although Figure 1 is described as "Extent of Lower Hastings River Floodplain" and the flood plain is, defined as "land adjacent to a river or creek which is periodically inundated due to floods up to the probable maximum flood event" (emphasis added), I take it that Mr Brown's view, in substance, is that the definition relates to the text of the Study and not to the map, is open. However, it is not necessary for me to determine this difference of opinion since it seems clear that the scale of the plan and the distance between the contours would not, at all events, reveal the area identified in the 2007 site map (and those following it) as being above the PMF. 151Mr Warnes referred to the Murray Dalton flood risk assessment, which derives the 1:100 year flood figure of 3.3m AHD and the PMF figure of 6.6m AHD from the HRFS table (to which I have already referred) and three maps (to which I need not refer) these figures having been derived as I understand it by adjusting the levels indicated for the confluence of Hastings and Maria Rivers and at Hibbard Ferry. He considered, at all events, that it was necessary to add to these measures additional allowance for freeboard and climate change. However, as I have pointed out, the HRFS numbers expressly take account of climate change, whilst the buildings on the site would all be a minimum of 0.4m AHD above the indicated levels when the subfloor structures were included, as was implicit in Mr Dutton's flood assessment and explicit in Murray Dalton's. The final site plan showed the area filling and regrading through the PMF level stipulated at 6.7m AHD. Mr Warnes expressed some qualification about the acceptability of re-contouring and filling to raise the level, referring to the need to model the effects of the flood because of the displacement of water and changing of flows, although he agreed there was little or no water velocity on the site. Mr Brown said that he did not think this was an issue. 152If the site had no sufficient shelter in the event of a PMF to which residents could evacuate, except for the issue of a medical emergency evacuation, the fact that use of the adjacent roads to evacuate to high ground which, for practical purposes required crossing of the Hastings River by ferry and transport to Port Macquarie, would be problematical, as Mr Brown agreed (subject to a qualification which I shall take up in due course). Mr Warnes' position was summarised as follows - "If this site kept rising and kept rising to higher ground we would not be here talking about an evacuation route. Where we've got a problem is this is an island, as the PMF comes up it envelopes it and all of a sudden the people are standing in water and that water may only be up to their ankles or it could be up around their waist or up around their chins. And once that happens the SES are obliged to come and rescue them. This is where the state government says through its Flood Plain Development Manual, think long and hard about whether you want to do this council, because it puts people's lives at risk, it adds to costs and, by the way council, if you haven't thought about this right, we won't indemnify you and you will wear the cost of loss of life, loss of property." 153Aside from the fact that this rather overstates the effect of s 733 of the Local Government Act, it will be seen that the problem only arises where there is no safe evacuation to shelter on the site. By the way, Mr Warnes apparently misunderstood the Murray Dalton flood risk assessment as not suggesting that staying onsite was an option but relied only on early evacuation which, he said, was the opposite of what had been originally proposed by Mr Dutton's flood risk assessment. It is true that Dalton proposed that the park should (or, rather, could) be evacuated early, before flood waters made vehicle movements difficult. The assessment noted that flood peak reached the site 64.5 hours after commencement of the storm and the Bureau of Meteorology issues flood warnings with a minimum of 20 hours evacuation time available prior to access being cut by flood waters. Dalton's assessment said the owner of the site had arranged with helicopter services to supply two helicopters during a flood event when the ferry services would be inoperable, as set out in the Resort Operations Manual which was attached to the application. Furthermore, it was proposed that the owner would have an SES specification 6m flood boat permanently available onsite which would be handled by suitably trained personnel in the event of a flood. The assessment noted that evacuation by vehicles was effectively prevented once flood depths exceeded 1.5m on the access road to the ferry and that ferries ceased to operate at this level. Staged hydrographs showed 20 hours before the flood peak reached the site for the 1:20, 1:50 and 1:100 year events and 22 hours before the peak for the PMF. In the event of residents being isolated on the site, the development had a shop with adequate supplies with additional supplies able to be brought in by using the flood boat or the helicopter service. It was also proposed that an emergency generator would be available to maintain power supply. Accordingly, Mr Warnes understanding in this regard was a misreading of the proposal, which did not envisage that all residents would be evacuated from the site. Mr Warnes criticised the Dalton proposal on the basis that it was based upon the view that the site was a low to medium flood risk when, in fact, it was a high flood risk because the evacuation route was over a high hazard area. However, that route only became high hazard after the time that it was proposed evacuation could and would occur, the danger being the velocity of water coming through the Hastings River which needed to be crossed in order to reach high ground. 154Mr Warnes added that the Dalton proposal amounted to a private evacuation plan from the point of view of the SES, a matter to which the Flood Plain Development Manual refers in an appendix dealing with emergency response planning for floods. That appendix deals with the role of SES and the development of a State Flood Plan, a Division Flood Plan (for each SES division) and a local flood plan for each local area with a significant flood problem. Dealing with local flood plans, the appendix stipulates a large number of considerations which need to be covered, including in relation to evacuation, defining the "mechanics of likely evacuation operations" dealing with such things as - "- numbers of door knockers required to deliver warning; - the capacity of evacuation routes and the problems of bottlenecking and low point inundation; - the time available to complete the evacuation before inundation occurs or evacuation routes are lost; - the transport resources which will be needed and the identification of reception (evacuation) centre sites." So far as private flood plans are concerned, the appendix states - "Private or site specific planning refers to the preparation of arrangements aimed at dealing with the impact of flooding on a particular business or household. The SES supports the idea of owners and occupiers of premises in areas of flood risk having a plan for what they should do to prepare for and respond to flooding. To this end, the SES promotes this practice in community and business education activities and continues to develop information to guide the community when they choose to prepare a private flood plan." 155However, it is pointed out that private flood plans are "unreliable as a long term risk mitigation measure" since floods are highly variable and planning assumptions about available flood warning time and likely consequences may be mistaken. Furthermore, "businesses and households will have a much lower capacity to undertake the necessary training and practice and so... [their] plans... will be much more prone to failure." In addition, the Manual deprecates the practice of Councils imposing development consent conditions that require site specific plans including those requiring the application to seek SES endorsement of the plan. The SES, for the reasons given, cannot effectively evaluate plans of this kind and, at all events, has no resources for doing so. 156Although, as a general approach, it is fair to say that a part of the Dalton proposal involved a private flood plan, in fact its primary focus was on the kind of evacuation which would at all events be sensible, using the roads and ferry services while they were available and staying on the site, neither of which to my mind are private plans within the meaning of the relevant parts of the Manual. It may be otherwise in respect of the suggested use of the flood boat and the helicopters for the possible emergency. However, this issue is one in respect of which reasonable minds might differ. After all, Mr Brown considered that this part of the Manual is concerned with ensuring quality in planning processes at a local level in developing a flood plan but not with an evacuation plan such as was part of the assessment proposed by Dalton. As I understand him, Mr Brown considered that a private flood plan as deprecated in the Manual is a community flood plan which does not involve the SES, the local council, State agencies, Commonwealth agencies, volunteer organisations and the local community as distinct from a particular plan developed by a developer seeking approval for a particular site. 157Mr Brown's opinion was ultimately that the material before the Council was insufficient to obtain approval but there were still ways in which the identified problems could have been dealt with and, as a matter of fair judgment, the Council might have been able to approve it. He accepted, however, that approval was unlikely because, as the matter ultimately went to the DAP, the applicant had not provided sufficient information to justify approval. I should mention in fairness, that Mr Brown's view, at least, when he commenced his evidence, was that evacuation to the north utilising Maria River Road was potentially available. Although it appeared that parts may have been flood affected in a 1:100 event and possibly in a PMF, that could not be confirmed without a survey of the road which was not undertaken. As to this, Mr Warnes view was that, having driven along the road he could see that it was, in parts, at a height, (the river being in view) which must necessarily result in its inundation. 158In the end, Mr Brown's position fairly appears from the following - "MORAHAN: The plan that was put forward by Dex to the council was that the people remain in situ, wasn't it? BROWN: Yes. They would evacuate in part to the building on site, which was the emergency building that was going to be provided. I think it was a community building on the property which would have food and supplies, that sort of stuff, in the building itself." MORAHAN: And that was a totally impractical suggestion also, wasn't it? BROWN: I disagree with that. I think that's not a bad solution to the whole process. You need to look at the time in which this area is ... flood affected [which would permit early evacuation following warning of the incoming flood water]." ... I think the Patterson Britton report, it talks about the floods. Now [it does not take account of the fact that], three phenomenons must occur at the same time. I'm quite sure that's been said in these proceedings at this stage [It had, by Mr Dutton.] One is you have a flood within the Hastings River itself combined with floods coming down from Kempsey, so you can actually get a flood in Kempsey not affecting Port Macquarie. So you have got to have those two at the same time and with a king tide of 2.2 coming at the same time. All three must be at the same time, which would be pretty rare. So you can have a flood in Kempsey that can come down the Maria River but not affect the Hastings River or Port Macquarie." Mr Brown acted upon the assumption (fully justified in my view but, from his point of view an assumption) that the refuge area was above the PMF. So far as the Dalton assessment was concerned, Mr Brown thought that reasonable minds could differ about whether it was acceptable; he thought it was and, although the Council might differ on the issue, that was just something which occurred from time to time with development applications. 159Mr Warnes' answer to the last point made by Mr Brown was - "... I certainly don't know about the issue of flooding in the Kempsey catchment, but the flood study that I understand was done for the Hastings River was simply on the Hastings River and that indicated the likelihood of flooding in this river system, which includes Maria River, the Hastings River and there's another tributary there that also floods, and the plans show, well, this is the floodplain in these different events and their expectation is these are the likely happenings. If you are going to have a flood event in the Hastings you are also likely to have a flood event in the Maria River." 160Mr Warnes was taken to the Dalton proposal which, as I have mentioned, showed an area of filling and regrading in respect of a community area above the PMF. He agreed that if the PMF of 6.7m AHD was correct, the proposal did not fall fowl of the Flood Plan Manual. He said - "Yes, assume we can fill that part, everything would be fine. My view would be certainly that would be one way of dealing with the issue." However, he pointed out that this did not address the medical emergency problem which might require evacuation and thus fall back onto the SES for the boat or helicopter. Given, however, the proposal that the development would have its own flood boat and there were arrangements for chartering helicopters (even accepting that this is a private evacuation plan in a sense), although one can accept that the Council might not accept this solution, it is far from certain to my mind that it would do so. Indeed, Mr Warnes implied on later cross-examination that the problem of emergency evacuation was not decisive since he returned to arguing that, in fact, the PMF was not as stipulated by Dalton or, for that matter the Council because, on his view, it did not included allowances for global warming and the inherent uncertainties of attempting to measure PMF. I have already dealt with the global warming point and it is evident, as to the second qualification, that the PMF is, for all its potential uncertainty, the relevant figure. It seems to me, also, that there was no sound evidentiary basis for Mr Warnes opinion that the Council would adopt what I might call his extreme conservative position although, that is not to gainsay that such a position was an unreasonable one. 161Mr Warnes was taken to the point that, until the Blackcreek survey was done, not enough was known about the site to have determined the application could not succeed - "MORAHAN: Mr Warnes, just on that point, do you have any comment in respect of that survey point, just that survey point? WARNES: If you talk about the methodology about the planner bringing on board a project for a development site, I do a thing which I call a desktop analysis. MORAHAN: I am not asking about that. WARNES: No, this is where I am going to. I do a desktop analysis and find out what publicly available information there is, and having looked at that say look, these issues rates large in relation to the potential for your development. In the circumstances of this matter I did that exercise. I said, well, what was there publicly available to the applicant at the time that this application was made. One of those foremost in my mind was the Hastings River Flood Study, and I go to the Hastings River Flood Study and I see in the PMF the whole of the site is inundated. I go to the Hastings River Flood Study and I see from the mapping that Maria River Road is in fact set in the 1:20 year flood, which is very early in the flood process. I see its set even further in the 1:100, but the idea is the evacuation is at the early stages of the flood. I certainly didn't have access to the information in the Dalton report that shows that in fact flood access to the Maria River Road and the ferries cut out even earlier in the process than the 1:20, but if I go to 30 in the Hastings River Flood Study shows the levels of inundation likely to occur in that precedent flood. HIS HONOUR: I don't think you're quite answering the question. I think the question boils down to this. Were you able to draw a sufficient conclusion about the evacuation problem from publicly available material or would you, as Mr Brown has said, really need a survey to deal with that question before you could give a reasonably certain answer? WARNES: I was just about to go to that. As I was going to say, because I went to figure 30 in the flood study and I could approximate the location in red of the Maria River Road on the 1:20 and I can see it goes into a flood area of zero to 1 metre, 1 metre to 2 metres, that without having any survey, without any need for recourse to survey, this is information that said to me it wasn't available. There's no need to carry out 35 kilometres of survey of a road. I think I also made the comment earlier yesterday that I drove out there and had a look and I could see standing at the side of Maria River Road I could see the river. There was no disparity between the two. With onsite observations and simply going to this plan I wouldn't have put the client to any cost of a survey for the road. MORAHAN: Do you agree with that, Mr Brown? BROWN: The plans we looked at are very broad brushed with no information whatsoever. MORAHAN: They do have information. BROWN: They have information, but they don't have much detail all the way through." 162Thus, an important point of difference is that Mr Warnes considered that the HRFS maps showed the land was inundated in a PMF whilst Mr Brown did not accept this, a view which was shown to be correct by the Blackcreek surveys. They also differed as to the need to obtain a survey of the Maria River Road, to see whether in fact the HRFS map was accurate in showing that parts were in the flood plain, which Mr Warnes accepted, and Mr Brown did not for technical reasons. I am not in a position to resolve their difference as to this, but it does not seem to me that the matter is beyond a reasonable difference of opinion. Mr Dutton's approach 163Mr Dutton had some knowledge of the North Shore and was aware that there were some flooding problems and access problems with the ferry which was the sole access and he thought that this would raise difficulties in getting approval. He said that he was not well aware, I take it of the extent and nature of the flooding problem, but was concerned about it as likely to be a relevant issue. The flood report provided by Baycorp in its proposal documents on the Maria River Road referred to the 1:100 year flood levels with an escape path through the road network to Maria River Road for storm events up to this level. Of course, this had been, unknown to Mr Dutton, been cut and pasted from some other development application. I have mentioned Mr Dutton's visit to the Maria River Road site. 164Mr Dutton said that on 11 January 2007 he commenced preparation of flood assessment for the site. For this purpose he telephoned the Council and, on making known that his enquiry was about the flood level on a particular site, was put through to someone in the engineering department who told him that the predicted 1:100 year flood level is 3.3m AHD and the property seemed to have negligible flood velocity. Although some criticism has been levelled at his choice at this measure for the 1:100 year flood, it seems to me that his enquiry was a reasonable one and he was entitled to rely on the response. Furthermore, the HRFS supports this level, once adjustment is made for the position of the site. He was also informed at the time that there was no flood management or evacuation plan for the North Shore area. Mr Dutton said that he referred to the HRFS, including the maps which showed the predicted extent of flooding in the 1:100 year flood and the extreme flood and also the flood development Manual to ensure that his report was generally in accordance with it. He noted, as it was reasonable for him to do so, the policy objective of avoiding unnecessary sterilisation of flood prone land. He also examined Google earth photographs and also maps available from the NSW Government (LPI), the Port Macquarie Topographic Map, the s 149 Certificate and the survey plan which he had been given by Mr Carter on which he drew in blue a line representing the 1:100 year flood level at 3.3m AHD. I should note that, at the pre-lodgement meeting held on 23 January 2007 there was a discussion of the flooding and the minutes refer to the "need to detail how a site would cope with isolation in extreme flood (e.g. 2 - 3 weeks without road access, power, water desalination or onsite treated effluent disposal)". There may have been some uncertainty about the meaning of the term "extreme flood". In later references it has been taken to refer to the PMF but I think, at this time, it was intended to refer to the 1:100 year flood event, as stated by Mr Dutton in his emailed report to Mr Carter about the meeting on 24 January 2007. 165Mr Dutton's reaction to the Council officer's views was that he did not necessarily agree with them since there had been no detailed survey done as to the flood levels over Maria River Road whilst the plans in the HRFS were stated to be approximations based on aerial photographs rather than surveys. Accordingly, he thought a survey would need to be done to determine if or when road access to the north would be cut off in a flood and a consideration given to improvement of the road if it were necessary. It seems to me that, as an initial response, this was reasonable, although it did not take on the problem of the possible PMF level. The Edwards survey was plainly inadequate and it was sometime before the Blackcreek survey was available. In my opinion, Mr Dutton was entitled to take the view that the survey and site maps ultimately provided to the Council together with his explanations at least permitted the Council to approve the development subject, of course, to its other requirements being met. 166Mr Dutton was subject to a critical cross-examination about his permitting, as it were, this plan to go to Council despite its many problems. It is important to note that the development application for the second proposal was made some time after the first submission of Baycorp's proposal. It was plainly designed to see what Council's response to the concept. It was not therefore to the point to criticise Mr Dutton for doing what his client insisted he should do, as I am satisfied he did. Mr Dutton described it as a concept report not submitted to a company for a development application but as a forerunner to a development application. Indeed, the Council's planning manager, Mr Owens, responded on 14 September with a helpful analysis of the concept plan. 167Mr Dutton's evidence is that the 1:100 year flood is known as the "peak flood level" and is not a reference to the PMF which is, Mr Dutton said rarely discussed or used. His assessment refers to a "predicted flood level" which is the language used by the Council officer whom he consulted, but he understood it to mean the 1:100 year flood level. Mr Dutton said that he looked at the Flood Plain Development Manual which required the Council to have regard to the PMF but that he thought that, though it was one of their requirements, it was not necessarily insurmountable, it was more the concern about the 1:100 year flood level which needed to be addressed. Mr Dutton's view was that the Council, in effect, glances at the PMF but regarded the 1:100 year level as the crucial matter: although the Council must have regard to the PMF, the question is what importance is placed on it. Mr Dutton (reasonably) regarded it as "a very important premise of the policy ... that all flood prone land is a valuable resource and should not be sterilised by necessarily precluding it from development and all development applications should be considered on their merits". Mr Dutton appreciated that the Manual's reference to flood prone land is to land susceptible to flooding in a PMF event, which was, he said, a big step from previous studies which all referred to the 100 year flood "as being more or less the limits of flood prone liability". 168Mr Dutton agreed that in December 2006 he was aware that the Council would apply a very rigorous approach in respect of the safety of people on the development which would involve looking closely at flooding and evacuation. He said that he suspected that the Council would look at the PMF as an overview of how it affected the site in conjunction with any evacuation if it was needed. He was aware, after April 2007 when the Port Macquarie Hastings LGA Flood Policy became available, that it provided - "caravan parks and manufactured housing reliant upon evacuation through high hazard floodway or high hazard storage conditions will not be supported by council." 169The earliest version of the concept plan proposed - "A flood management strategy will be prepared and implemented in the event of a flood warning being issued by the State Emergency Services. The strategy will include evacuating all residents and non-essential personnel from the site and the safe storage of equipment and machinery above the flood level." Of course, this was Baycorp's proposal. In Mr Dutton's first flood assessment, as has been pointed out, it was said - "With the warning time possible of at least 24 hours and the fact that all residential areas will be flood free there should be no need for evacuations or for major emergency preparations". Mr Dutton agreed (as is obvious at all events) that in this assessment he did not address what might need to happen in a PMF event. He said that it was later addressed when Council brought it to Dex's attention. Although it appears that there was some early view that helicopters might be used to evacuate at least some of the residents in the event of a flood, it was later proposed as being available for emergency medical evacuations, a view with which Mr Dutton said he tended to agree though (as I understand it, early in the piece) he did not think it was a "very firm idea". There was also a suggestion made to Council on Mr Dutton's instigation and he had hoped with SES support that there would be an SES flood control centre constructed on the site, which would be above the PMF level where all flood and emergency operations on the North Shore could be controlled and co-ordinated together with at least one, possibly two, flood boats complying with SES specifications, there being at the time no SES presence on the North Shore. Mr Dutton thought that, as a package, the proposed flood plan may have been acceptable to Council. 170Mr Dutton was taken to the September 2007 site plan based on the Blackcreek Engineering survey. He pointed out that although that site plan indicated a line at 6.4m AHD, it did not matter if the appropriate measurement was 6.7m AHD because this was still achievable, the difference not being significant. The plan which ultimately went to Council in 2008 was, in Mr Dutton's view a preliminary plan which was capable of change. He said - "A. ... I would have expected Council to condition us, to condition any approval to say or defer commencement to say you need to satisfy us that there is sufficient area on the site for the emergency accommodation of residents plus a certain number of [the] public. Q. You knew that it was highly unlikely that in relation to public safety, the safety of these people on the site in an emergency situation, that the Council would allow a deferred consent? A. No, I didn't know that. Q. You seriously thought that they would allow a deferred consent on something such as this? A. Yes, it's reasonable. It has happened before, in my experience." Mr Dutton said that the plan was "a negotiating plan", and this was made clear to the Council, one way or another. 171Mr Dutton thought that the Council's knowledge of the property was "very flimsy" and given that the s 149 Certificate said that the land was not flood prone, which he thought was wrong, he also was of the opinion that Council's survey or whatever it was relying on was incorrect. Mr Dutton's view, supported by the Blackcreek surveys was that a significant part of the site was above the PMF and further proposed filling would expand that area to create a safe refuge in a PMF. It was not therefore a flood island in the sense in which the term was used by the Council. (Much of the cross-examination on this point was therefore confusing because this distinction was not appreciated. That it is important is clear from the references (mentioned above) by the Council to its understanding that the land would be inundated in a PMF.) 172Mr Dutton was cross-examined as to why, in his flood assessment report he made no reference to the HRFS or the Flood Plain Development Manual. He said that this was because it was assessment and not a risk assessment, which could not be undertaken because, at that time in February 2007 he had no survey or, at least, no appropriate survey. Reference to the HRFS and the Manual would have been appropriate in a risk assessment. The point seems to me to be an obvious one. Both the HRFS and the Flood Plain Manual refer to flood levels at various degrees of likelihood. Unless a survey of the land was available which showed the AHD contours at informative heights, neither of those documents were capable of being addressed. In my view Mr Dutton was saying no more than this and it was no more than common sense. 173Although the flood issue was not specifically raised in the 21 points made in the Council's letter of 5 April 2007, as at the date of that letter Mr Dutton agreed that the flooding issue concerns raised by the Council at the pre-lodgement meeting were substantial and outstanding. Mr Dutton said that it appeared to him that, following the pre-lodgement meeting, their concern about flooding became a little relaxed since it was not referred in the letter of 5 April 2007. He thought that, if Council were as concerned about flooding as they intimated in the pre-lodgement meeting, it could have been raised specifically in the letter and, as it was, it was not really raised again until November. However, he said (candidly) that he was not particularly relieved because he understood that flooding was still an issue, certainly as to the significance of the PMF. 174Mr Dutton explained in his evidence that the Council's calculation of the PMF in the area close to the site (6.8m AHD at the junction of the Maria and Hastings rivers) was incorrect and there was an error in the model for that area since a lot of the water flows to the north and not all to the south, as the flood study assumed and, accordingly, he chose another site as the appropriate indicator, being Hibbard Ferry, at which the PMF was 6.4m AHD. Mr Dutton said that he later adopted the 6.7m AHD as the PMF line for the January 2009 site plan because of the Council's insistence on this level. Mr Dutton's reference to the run off to the north in the Maria River which he thought was wrongly ignored in the study was derived from his experience of the area. Conclusion 175I am satisfied that, although it may be that the application was unlikely to have been approved, it was not inevitable that it would have failed on the flood issue. The risk of a PMF significantly affecting the site was slight. Although the HRFS appeared to show inundation in such an event, it was reasonable to wait until a survey was obtained before determining the actual flood risk. A substantial area of safe refuge was proposed and would have been available, with the necessary safeguards as to food, power, sewage, shelter and provisions. With an adequate flood warning (likely to be made) many residents could leave the site for Port Macquarie while the ferry was still operating providing they did so within a few hours. The adequacy of helicopter and/or flood boat evacuation for medical emergencies was very much a matter of judgment. 176In my judgment it was not at all impossible that a Council in the position of the Hastings-Port Macquarie Council would have regarded the development (if it were otherwise appropriate) as approvable, given the policy stated in the Flood Development Manual about development even in flood prone areas. I do not accept that the plaintiff has established that the development "could never have been approved". 177Accordingly, there must be judgment for the defendants. Damages 178I have already set out the arrangements between the plaintiff and Mr Carter in respect to the payment of the cost of the development application. It follows that, the development having been refused, Baycorp is under no obligation to pay Mr Carter that cost and, therefore, has suffered no loss under this head. As to the claim for loss of profits, this is complex and problematical for Baycorp to prove. In light of my judgment on liability, I do not propose to undertake this exercise. Orders 179I make the following orders - (1). Judgment for the defendants. (2). Costs to be determined following submissions. ********** Amendments 02 October 2014 - typographical error Amended paragraphs: 157 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: 02 October 2014