Della Franca v Lorenzato; Burwood Council v Lorenzato

1. [1]

   BASTEN JA: In August 2011 Elisa Lorenzato became the owner of a property in the Appian Way, Burwood, by transfer from the vendor, Michael Lewis Della Franca, pursuant to a contract for sale and purchase entered into on 17 March 2011.

2. [2]

   On 17 March 2017 Ms Lorenzato commenced proceedings in the Supreme Court against Mr Della Franca and Burwood Council. Her claims fell into three parts. First, she had a claim against the Council in nuisance on the basis that the Council was liable for flooding resulting from inadequate stormwater drainage affecting properties on the lower side of the Appian Way. She was successful in that claim and was awarded damages in an amount of $55,000; there is no appeal from that order.

3. [3]

   Her second claim against the Council alleged negligent misstatements in a certificate issued under s 149 of the Environmental Planning and Assessment Act 1979 (NSW) (“the Planning Act”). In broad terms, the complaint was that the Council had failed to include information relevant to the state of stormwater drainage, as it affected her property.

4. [4]

   The third claim was also for negligent misstatement, brought against Mr Della Franca, on the basis of inadequate answers to requisitions sought pursuant to the contract of sale of land. Again, the issue related to information with respect to the stormwater drainage affecting the property.

5. [5]

   On 23 November 2020, the trial judge, Fagan J, gave judgment on the negligent misstatement claims against both the Council and Mr Della Franca in the sum of $1,274,000, together with interest to the date of judgment. [1] The interest was calculated at almost $700,000, running from 12 August 2011.

6. [6]

   Both the Council and Mr Della Franca lodged appeals against the judgment and orders dealing with the negligent misstatements. For the reasons given by Macfarlan JA each appeal should be upheld and the awards of damages for negligent misstatements set aside. Subject to any variation with respect to the costs of the trial in relation to the claim in nuisance, Ms Lorenzato must pay the costs of the Council and Mr Della Franca of the trial and of the appeal to this Court. I agree with the orders proposed, for the reasons given, by Macfarlan JA.

7. [7]

   The following observations address the statutory protective provisions on which the Council relied. The first is s 43A of the Civil Liability Act 2002 (NSW).

8. [8]

   Consistently through his reasons, the judge referred to s 43A as a statutory defence. [2] That characterisation obscures the true operation of the section. When the section is engaged, it identifies the standard of care, in place of that identified in s 5B of the Civil Liability Act. Accordingly, the application of the section should be addressed before considering whether there has been a breach of duty to which the section applies.

9. [9]

   Section 43A appears in Pt 5 of the Civil Liability Act. Somewhat ineptly, s 40 of the Act provides that Pt 5 applies to “civil liability in tort” and “extends to any such liability even if the damages are sought in an action for breach of contract or any other action”: s 40(1) and (2). (There are exclusions identified in s 3B, but none arose in the present case.)

10. [10]

    Section 43A reads as follows:

11. [11]

    The trial judge held that s 43A was not engaged in the present case for a number of reasons, none of which can be upheld.

12. [12]

    The issue arose in relation to the Council’s provision, in August 2010, of a certificate under s 149 of the Planning Act; as then in force (it is currently s 10.7) the section read as follows

13. [13]

    The judgment contained a number of reasons why the conduct of the Council in issuing the planning certificate did not fall within s 43A. The first was based upon a distinction between the exercise of a power and the performance of a duty. The judgment stated:

14. [14]

    The starting point of an exercise in statutory construction is the text of the statute, not the circumstances which have arisen in other cases. A power does not cease to be a power because there is a duty to exercise it. The trial judge identified two cases in this Court which were said to support the distinction between a power and a duty. The first was Curtis v Harden Shire Council. [3] There is some irony in relying upon that decision. In discussing the origins of s 43A, in a passage with which Bathurst CJ at [1] and Beazley P at [221] agreed, I noted the discussion in Stovin v Wise [4] as to the manner in which the imposition of a common law duty of care on a statutory power could change a power into a duty. That gave rise to a concern that the courts should be cautious in imposing a duty to take reasonable care. There was no statement in Curtis, nor in the cases discussed in Curtis, nor any basis for inferring, that s 43A only applied to the exercise of a discretionary power.

15. [15]

    The second case relied upon by the trial judge was Bankstown City Council v Zraika. [5] That case involved a failure by a consent authority to impose a condition on a development application. The judge relied upon the statement by Leeming JA that “the power exercised by the Council to grant consent conditionally” was a special statutory power. The judge said that was so because, although the consent authority was obliged to determine the development application, it was the “facultative power to attach conditions of consent” which engaged s 43A.

16. [16]

    The issue in Zraika was whether the consent authority was in breach of its duty of care to road users in failing to impose a condition on the manner in which traffic might leave the site. That was why Leeming JA referred to a conditional grant of consent. The reasoning provides no basis for a distinction between powers and duties when considering whether s 43A is engaged.

17. [17]

    Indeed, Zraika illustrates the artificiality of the distinction. The consent authority was subject to a statutory duty to consider the development applicant. But in considering it, it had a choice as to whether to grant consent, refuse consent or grant consent subject to conditions. That required an evaluative judgment in the exercise of a power. The trial judge thought that the obligation to determine the application fell outside the operation of s 43A. However, the plaintiff’s argument in Zraika was that the authority was under a duty to impose a particular condition when granting consent. Leeming JA noted:

18. [18]

    As noted in Zraika, s 43A assumes the existence of a general law duty of care; it then fixes the relevant standard to be applied. [6] The cases concerning the imposition of a common law duty of care on a public authority were concerned with the consequence of imposing such a duty, namely that it turned a discretionary power into an obligation to act in a particular way, an issue that did not arise where the authority was under a duty to act. Thus, in Sutherland Shire Council v Heyman [7] Gibbs CJ stated:

19. [19]

    Given that, under the general law, a duty of care may operate with respect to a public authority exercising a statutory function, whether discretionary or obligatory, there is no reason to distinguish between the performance of a duty and the exercise of a discretionary power in fixing the standard of care. The application of s 43A does not turn on this factor. [8]

20. [20]

    Putting to one side cases involving different statutory powers, the question to be addressed was whether the power conferred by s 149 of the Planning Act was “of a kind that persons generally are not authorised to exercise without specific statutory authority”. As recently explained in Seqwater, there is a history of the construction of protective provisions (provisions conferring qualified immunity on public authorities) distinguishing between activities which require statutory authorisation and those which do not. As the High Court explained in Board of Fire Commissioners (NSW) v Ardouin, [9] while the Fire Commissioners were granted powers to enter property and carry out the functions of fire control, they did not need statutory authority to drive a vehicle to a fire on a public street. A protective provision in the legislation applied to the former, but not the latter activities. That general law approach is reflected in s 43A(2). [10]

21. [21]

    The issue of planning certificates under s 149 of the Planning Act is a function conferred only upon a “council”, namely a council under the Local Government Act 1993 (NSW). [11] The content of a planning certificate is prescribed by the Environmental Planning and Assessment Regulation 2000 (NSW), cl 279 and Sch 4. The schedule sets out matters to be disclosed in a planning certificate, including certain characteristics of the land and planning instruments which apply to the land. Planning certificates form an important aspect of the transparency of the system for land sale and purchase in New South Wales. There was no serious dispute that people generally are not authorised to issue planning certificates. Accordingly, the issue of a planning certificate was a special statutory power for the purposes of s 43A(2).

22. [22]

    The trial judge further held that the plaintiff’s cause of action for negligent misstatement in the certificate was not “based on” the Council’s exercise of, or failure to exercise a special statutory power: at [315]. The use of the term “based on” derives from s 43A(1). However, the content of the planning certificate as issued in exercise of power under s 149 was the sole basis upon which the plaintiff’s cause of action for negligent misstatement was founded. Although in written submissions Ms Lorenzato sought to support this sentence in the judgment, the point was abandoned on the hearing of the appeal. The abandonment was entirely appropriate: the statement in the judgment at [315] was unsupportable.

23. [23]

    The judgment then stated that “s 43A is only capable of being applied to a claim against a public authority that is based upon a deliberate act in exercise of a power or a deliberate refraining from action under the relevant power.” That was said to flow from the fact that the standard articulated in subs (3) required that conclusion. The judgment explained that proposition in the following manner:

24. [24]

    The relevant “statement”, said to have been a negligent misstatement, was the issue of the planning certificate. There is no doubt that that was a deliberate act. Whether the judge considered the omission of material from the statement was not shown to have been a deliberate act is unclear. If the element of deliberateness were intended to be contrasted with inadvertence, no such distinction was relevant for the purposes of s 43A because no such distinction is relevant to liability in the tort of negligence.

25. [25]

    It is true that, as explained in analogous circumstances in Zraika, there was no exercise of multiple powers. The submission, rejected in Zraika, as set out at [17] above, was that the grant of a conditional consent comprised “the separate functions of (i) granting consent to the development application, but at the same time (ii) imposing conditions upon the grant of consent.” That characterisation was described as “quite artificial”. However, that principle, applied to the present circumstances, required that the planning certificate be read as a whole to determine whether the overall effect was to misstate some particular characteristic of land required to be disclosed.

26. [26]

    There is nothing in the trial judgment which provides any basis for concluding that the issue of the planning certificate did not engage s 43A.

27. [27]

    Against the possibility that this Court might conclude that s 43A was engaged, Ms Lorenzato contended that the conduct of the Council in fact breached the standard imposed by s 43A(3). That submission should be rejected. As the Council submitted, there was a wealth of evidence available upon which this Court could conclude that the steps taken by Council were in accordance with the general approach, supported by the manual to which reference will be made below, and properly adopted by other councils, namely that the information to be included in a planning certificate did not require reference to individual items of stormwater drainage (or other infrastructure, such as utilities) commonly found on particular parcels of land. Indeed, senior counsel for Ms Lorenzato stated at the outset of his submissions that the flooding in the Appian Way was likely to affect some 27 properties. If that were the case, the fact that there was a defective stormwater drainage system which ran through Ms Lorenzato’s property would presumably need to be disclosed in planning certificates for the other potentially affected properties. The expert evidence did not support that proposition, nor was the case run below on that basis.

28. [28]

    There was no specific evidence to which this Court’s attention was drawn which supported the proposition that the statements in the planning certificate were in breach of the standard imposed by s 43A(3).

Issue of planning certificate in good faith

1. [29]

   In requesting the issue of a planning certificate, Mr Della Franca required information in accordance with s 149(2) and s 149(5): see [12] above.

2. [30]

   In February 2007, cl 7 of Sch 4 of the Regulation was amended to remove reference to any policy adopted by the Council “that restricts the development of land because of the likelihood of … flooding …”. Other risks were to be disclosed, but not risks relating to flooding. At the same time, a new cl 7A was introduced relating to “[f]lood related development controls information”. Curiously, more than three years later, in August 2010, the Council had failed to update the template it used for planning certificates so as to reflect the amendments to cl 7, although it had included the new cl 7A. As a result, the answer it provided in the planning certificate issued in August 2010 included a denial that the land was affected by a policy restricting the development of the land because of the likelihood of flooding, language reflecting the old cl 7.

3. [31]

   In order to rely upon that as a negligent misstatement, Ms Lorenzato contended in this Court that the answer constituted “advice on such other relevant matter affecting the land of which it may be aware”, within the terms of s 149(5). That appears not to have been how the case was run at trial. Nevertheless, at trial a second negligent misstatement was said to arise from the advice supplied pursuant to s 149(5). Accordingly, even at trial it was necessary to address the protective provision in s 149(6), namely that the advice must have been provided otherwise than “in good faith pursuant to subsection (5).”

4. [32]

   Although pleaded, the judgment below did not address that issue. Rather, in considering the statutory defences, the reasoning moved directly from the application of s 43A to the reliance upon s 733 of the Local Government Act. Section 733, so far as relevant, provided as follows:

5. [33]

   The judgment rejected Council’s reliance upon that provision on the following basis:

6. [34]

   There are four points to be addressed in relation to this paragraph. First, the explanation as to why s 733 was not engaged could not apply to s 149(6). Accordingly, the judgment failed to address the argument based on s 149(6). The notice of contention filed on behalf of the Ms Lorenzato did not invite this Court to find that the omission of information from the planning certificate involved any lack of good faith on the part of the Council. Nevertheless, the Court was invited to draw that inference. Given that there was no misstatement resulting from the omission of material information, that question does not arise and cannot sensibly be addressed.

7. [35]

   Secondly, the second sentence in this paragraph in the appeal books (numbered [320]) read, “That is not an inaccurate paraphrase of par (a) of s 733(1).” There was a dispute as to whether that sentence involved a typographical slip. Ms Lorenzato submitted the judge had intended to state that the Council’s submission involved an inaccurate paraphrase of s 733(1)(a), rather than the contrary. The revised version proves that to be correct. However, accepting the undesirability of paraphrasing statutory language, the question remained whether the actual language of the provision was engaged.

8. [36]

   In construing s 733(1)(a), the reference to “advice” appeared to engage subs (5) of s 149, whereas the phrase relating to the “likelihood of any land being flooded” followed more closely, though not precisely, the language of cl 7 of Sch 4 to the Regulation, prior to its amendment. However, the disclosure required under cl 7 was limited to policies that restrict the development of land “because of the likelihood of … flooding”. The connecting phrase between advice and likelihood of flooding, namely “relating to” is not to be read down so as to deny the application of the exemption to the precise circumstances to which it was intended to apply. The breadth of subs (1) is confirmed by the language of subs (b) which might include any disclosure or failure to disclose information relating to the likelihood of any land being flooded.

9. [37]

   Thirdly, the judgment made no reference to subs (3), although it was set out in the extract from s 733 contained in the judgment at [318]. The opening words of subs (3), namely “[w]ithout limiting subsections (1)…”, followed by the generality of the phrasing “advice furnished in a certificate under section 149”, confirm the breadth which must properly be attributed to the ordinary meaning of the language of subs (1). There was no reason to find that s 733(1) and (3) were not engaged in the present case.

10. [38]

    Fourthly, the judgment below made no reference to the operation of s 733(4). The relevant manual, issued pursuant to s 733(5), was the “Floodplain Development Manual – the management of flood liable land”, dated April 2005. It contained express advice as to how susceptibility to flooding should be dealt with in planning certificates. [12] The provisions in the manual were the subject of evidence by town planning experts as to why the characteristics of particular parcels of land were not required to be disclosed in planning certificates.

11. [39]

    If that evidence had been accepted (and the town planners were not cross-examined in relation to it) there was a presumption of acting in good faith. No evidence was identified in this Court which was capable of rebutting that presumption.

12. [40]

    Because of the view taken in [319], the trial judge did not address the question whether the Council did not act in good faith in providing the planning certificate. For the reason noted above with respect to s 149(6), given the absence of a misstatement of the kind pleaded, that question does not arise and cannot sensibly be addressed.

13. [41]

    For these reasons, in addition to those given by Macfarlan JA, the claims against the Council should have been dismissed.

14. [42]

    MACFARLAN JA: By contract dated 17 March 2011 Ms Elisa Lorenzato agreed to purchase a residential property at 13 Appian Way, Burwood from Mr Michael Della Franca. The contract included a planning certificate (the “Certificate”) issued under s 149 of the Environmental Planning and Assessment Act 1979 (NSW) (the “Planning Act”) by Burwood Council. The purchase was completed on 12 August 2011 after Mr Della Franca’s solicitor supplied, late on the previous day, answers to requisitions submitted by Ms Lorenzato’s solicitor.

15. [43]

    Due to stormwater issues concerning the property that are described below, Ms Lorenzato commenced proceedings in the Supreme Court of New South Wales against the Council and Mr Della Franca claiming damages for, inter alia, negligent misstatement, in the case against the Council, in the Certificate and, in the case against Mr Della Franca, in his answers to Ms Lorenzato’s requisitions. Mr Della Franca cross-claimed against his solicitor but that claim was settled after the judgment at first instance and is not relevant to the present appeal.

16. [44]

    Following a hearing in August 2020 before Fagan J in the Common Law Division, his Honour delivered judgment on 23 November 2020 finding in favour of Ms Lorenzato on both of her claims ([2020] NSWSC 1659). Judgment was given against each of the defendants for about $1,200,000 together with interest under s 100 of the Civil Procedure Act 2005 (NSW) of about $700,000.

17. [45]

    The Council then appealed to this Court, contending that the primary judge erred:

    1. (1)

       in finding that the Council was liable to Ms Lorenzato for negligent misstatements made in its s 149 Certificate;

    2. (2)

       in finding that s 43A of the Civil Liability Act 2002 (NSW) did not protect the Council against Ms Lorenzato’s claim;

    3. (3)

       in finding that s 733(1)(a) of the Local Government Act 1993 (NSW) (the “LG Act”) did not protect the Council against Ms Lorenzato’s claim;

    4. (4)

       in assessing Ms Lorenzato’s damages;

    5. (5)

       in rejecting the Council’s proportionate liability defence under Part 4 of the Civil Liability Act 2002 (NSW).

18. [46]

    In response, Ms Lorenzato sought by a Notice of Contention to support the judgment against the Council on alternative grounds.

19. [47]

    Mr Della Franca also appealed, contending that the primary judge erred:

    1. (1)

       in finding that answers to requisitions 6(a), 7, 8(a) and 19 were incorrect and constituted negligent misstatements;

    2. (2)

       in finding that Ms Lorenzato relied on the answers to requisitions;

    3. (3)

       in assessing damages;

    4. (4)

       in assessing the amount of interest to be awarded to Ms Lorenzato.

20. [48]

    For the reasons appearing below, both appeals should be upheld.

RELEVANT FACTUAL CIRCUMSTANCES

1. [49]

   The relevant factual circumstances are described in detail in the primary judgment at pages 19 to 90 ([35]-[232]). It is sufficient for present purposes to provide the following summary, based largely on that contained in the Council’s written submissions on appeal.

2. [50]

   In about 1904 a predecessor council installed a 400mm diameter pipe under the surface of the subject property for the purpose of draining stormwater from the Appian Way and surrounding catchment. By reason of s 59A of the Local Government Act 1993 (NSW) (enacted in 2002), the Council is the owner of that pipe (Judgment at [60] and [332]).

3. [51]

   In about 1911 the house which is on the property was built over part of the pipe and in the 1960s a swimming pool was installed over another part. Mr Della Franca became the owner of the property in 1989. In about 2005, he added a patio to the rear of the house, over the pipe.

4. [52]

   During his ownership of the property, Mr Della Franca and neighbouring residents complained to the Council about their properties being inundated by stormwater runoff from the Appian Way and surrounding catchment during heavy rain.

5. [53]

   In 2001 the Council’s engineers concluded that the drainage issues were caused by the poor condition of the pipe referred to above, that it should be decommissioned and that a new stormwater pipe with greater capacity should be installed under the surface of the property, with a drainage easement to be created adjacent to the northern and western boundaries and therefore not under the house. Thereafter the Council negotiated with Mr Della Franca for it to acquire such a drainage easement to enable the proposed works to be carried out but the negotiations were unsuccessful.

6. [54]

   In June 2002 Mr John Wyatt, the Council’s Group Manager of Engineering Services, prepared a report for the Council’s Services and Policy Committee on the issue. This led to that Committee passing the following resolution on 11 June 2002 (the “2002 Resolution”):

7. [55]

   Mr Della Franca was notified of the 2002 Resolution by letter of 14 June 2002. He and the Council then had further unsuccessful negotiations between July 2002 and February 2003.

8. [56]

   On 4 February 2003 the Council issued two notices to Mr Della Franca which stated inter alia that the Council had resolved to carry out maintenance of the existing drainage pipe and intended to enter the property to undertake an inspection of the pipe and to carry out the works.

9. [57]

   On 14 February 2003 the Mayor of the Council sent a letter to Mr Della Franca in which he referred to the 2002 Resolution and stated inter alia that “Council has chosen not to pursue the second option” and “I therefore confirm the Council will act pursuant to the Notices issued to you on 4 February 2003”.

10. [58]

    On 21 February 2003 Mr Della Franca’s solicitors sent a letter to the Council stating inter alia that Mr Della Franca would seek an injunction to restrain the Council from undertaking the proposed “unauthorised works” on the drainage pipe if the Council did not confirm that it would not carry them out.

11. [59]

    On 5 March 2003 the Council’s General Manager, Mr Romano, sent a letter to Mr Della Franca which relevantly stated:

12. [60]

    On 21 March 2003 Mr Wyatt provided an update on the issue to the Mayor, Councillors and the General Manager, in which he stated:

13. [61]

    The Council did not thereafter take any steps to implement any aspect of the 2002 Resolution.

14. [62]

    On 18 June 2004 the Council granted consent to a development application brought by Mr Della Franca to construct a new patio and skillion roof at the rear of his property, in an area said by the Council in these proceedings to be directly above the drainage pipe. The conditions of consent did not require Mr Della Franca to grant a drainage easement to the Council along the western and northern boundaries of the property, or elsewhere.

The s 149 Planning Certificate

1. [63]

   Since the events relevant to these proceedings, amendments have been made to the applicable legislation. The regulatory framework set out below refers to the legislation as it was at the relevant time.

2. [64]

   Section 149 of the Planning Act was in the following terms:

3. [65]

   Clause 279 of the Environmental Planning and Assessment Regulation 2000 was in the following terms:

4. [66]

   Clauses 7 and 7A of Sch 4 to that Regulation were in the following terms:

5. [67]

   Prior to the introduction of cl 7A in 2007, cl 7 included the word “flooding” in its list of the possible reasons for restricted development of the land, and did not include the words “other than flooding” at its conclusion.

6. [68]

   On 6 August 2010 Mr Della Franca applied in writing to the Council for the issue of a s 149 certificate. The form that he completed gave him the option of paying $40 for a “Section 149(2) Certificate” or $100 for a “Section 149(2) Certificate + 149(5) Certificate”. He selected the latter and paid $100 for the certificate.

7. [69]

   The s 149 Certificate that the Council supplied and that was attached to the contract for sale to Ms Lorenzato was expressed to be issued under s 149(2) and (5). It provided first “Section 149(2) details”, said to be “in respect of the prescribed matters to be included in a planning certificate”.

8. [70]

   Items 7 and 7A in this section of the Certificate were in the following terms:

9. [71]

   In a separate section of the Certificate, headed “SECTION 149(5)”, the Council stated that:

The answers to requisitions

1. [72]

   Clause 5 of the contract for sale dated 17 March 2011 limited the time for the purchaser to make requisitions. Special condition 10 to the contract stated that the “only form of general requisitions on title that the Purchaser shall be entitled to raise pursuant to Clause 5 shall be in the form of [the] Requisitions on Title annexed and are deemed to be served at the date of this Contract”.

2. [73]

   Clause 10 of the contract provided relevantly as follows:

3. [74]

   The form of requisitions on title incorporated in the contract and referred to in cl 5 included the following:

4. [75]

   On 9 June 2011 Ms Lorenzato’s solicitors provided to Mr Della Franca’s solicitors a form of transfer to be signed and handed over on settlement “subject and without prejudice to satisfactory replies to requisitions on title herein”. On 14 July 2011 Ms Lorenzato’s solicitors expressly stated to Mr Della Franca’s solicitors that they raised requisitions on title in accordance with special condition 10. In a letter of 4 August 2011 they referred to the date of 12 August 2011 scheduled for settlement and requested “a direction to pay as soon as possible together with replies to requisitions”. A further reminder was given by Ms Yvonne Marra, a paralegal employed by Ms Lorenzato’s solicitors, by email of 9.19am on 11 August 2011. The vendor’s answers to the requisitions, given by way of handwritten notations on a copy of the form of requisitions on title annexed to the contract, were provided later that day. Settlement took place the following day.

5. [76]

   Relevantly, the answers were as follows:

Whether misstatement in item 7 of the s 149 Certificate

1. [77]

   The primary judge found that the 2002 Resolution was, within the meaning of item 7 in the s 149 Planning Certificate, a “policy adopted by the Council… that restricts the development of the land because of the likelihood of… flooding”. His Honour also found that the 2002 Resolution, and therefore the relevant “policy”, was not revoked or abandoned prior to issue of the Certificate. Accordingly his Honour found that the statement in the Certificate that no such policy existed was erroneous.

2. [78]

   His Honour stated that the object of paragraphs A and B of the 2002 Resolution (see [54] above) “was to achieve adequate drainage of stormwater from Appian Way and to avert the risk of flooding the road and/or” that of nearby properties and that those paragraphs described the steps that would be required to achieve that result. His Honour also noted the statement in the 2002 Resolution that “[f]uture development of the property should include the establishment of an easement adjacent to the side boundary for drainage purposes” and acknowledged that this did not state “in terms” that any future development consent would be made conditional upon the grant of a western boundary easement. He stated however that “that was what it meant”.

3. [79]

   His Honour continued:

4. [80]

   The proper construction of the Certificate was to be determined in light of the statutory framework pursuant to which it was issued. As noted above, s 149(2) of the Planning Act provided for the inclusion in certificates of such matters “as may be prescribed”. That prescription appeared in the Environmental Planning and Assessment Regulation 2000, which is a statutory instrument which commenced in 2001. In general terms, the subject Certificate followed, and used the language of, cl 7 of Sch 4 to the Regulation (see [66] above). The exception was that the form of the Certificate reflected cl 7 of the Regulation as it stood prior to its amendment in 2007 (that is, including the word “flooding” in the list of possible reasons for restricted development) (see [67] above). Nevertheless, the terms of the Regulation, both in its pre- and post-2007 form, provide the background against which the Certificate is to be construed.

5. [81]

   As well, another part of the statutory framework that needed to be taken into account was the Floodplain Development Manual of April 2005 issued pursuant to s 733 of the Local Government Act 1993 (NSW). That section was in the following terms:

6. [82]

   Relevantly, that section, which was concerned, as indicated by its heading, with a council’s “exemption from liability” in respect of “flood liable land and land in coastal zone”, provided in sub-s (5) for the Minister for Planning from time to time to notify in the Gazette the publication of a manual relating, inter alia, to the management of flood liable land. By sub-s (6) the manual had to be available for public inspection.

7. [83]

   The 2005 manual, still current in 2010, addressed at some length the matters that should, and should not, be contained in s 149 certificates so far as flooding was concerned. Statements in the manual such as the following tended to suggest the reference to “a policy” in cl 7 of Sch 4 to the Regulation (see [66] above) was not concerned with a site-specific decision, or even decisions related to a number of sites, made by council but rather with the relationship of particular land to general floodplain levels:

8. [84]

   Even if the 2002 Resolution did however constitute a “policy” it was not in any event one of the character described in item 7 of the Certificate, that is, one which “restrict[ed] the development of the land because of … flooding”. At most, it indicated that the Council would be likely in the future to take the indicated steps concerning acquisition of an easement and would impose a condition on any future development consent that a relevant easement be granted in favour of the Council. On Ms Lorenzato’s case, and seemingly on the primary judge’s reasoning, this would, or at least might, have the effect of advancing the Council’s objective to reduce flooding in the area. It might thus be regarded as a policy designed to achieve that result by indirect means but in my view could not fairly be described as a policy, as required by item 7, that of itself restricted development because of the likelihood of flooding. Ironically, this reasoning is analogous to that adopted by the primary judge when considering whether, for the purposes of item 7A in the Certificate, “development” on the subject land was “subject to flood related development controls”. His Honour said in that context:

9. [85]

   In considering item 7 the primary judge in my view erroneously had regard to the possible, or even likely, effect of what the Council proposed, rather than, as he did in relation to item 7A, considering what the “policy” provided for in a direct sense.

10. [86]

    The essence of the primary judge’s reasoning to his conclusion that the 2002 Resolution was not revoked or abandoned by August 2010 was as follows:

11. [87]

    The following circumstances however in my view indicate that even if the 2002 Resolution did constitute a relevant “policy”, it was abandoned by the Council by the time of issue of the Certificate in 2010.

12. [88]

    The Mayor’s letter to Mr Della Franca of 14 February 2003 (which was not referred to by the primary judge in his summary of the circumstances that were relevant in this context – compare at Judgment [109]) stated that the Council had “chosen not to pursue the second option” referred to in the 2002 Resolution. This was what was stated in item B of that Resolution (compulsory acquisition of an easement at the site of the existing pipeline or imposition of a condition on a future development consent that a boundary easement be provided). This left only item A, which involved the creation of an easement over the existing pipeline by agreement with the owner, and then consequent relining of the existing pipe. Even assuming that item A subsisted as an operative “policy” until at least 2010, it clearly did not involve a policy of the type described in item 7 of the Certificate. A “policy” to attempt to reach an agreement with the landowner about a matter could not on any view be described as a policy that restricted development of the subject land due to flooding.

13. [89]

    Moreover, as the primary judge pointed out in [267] (see [86] above), the course of action of which the Council informed Mr Della Franca by its notices of 4 February 2003 (see [56] above) was not a course of action envisaged by any part of the 2002 Resolution. The course of action was not therefore a relevant policy for the purposes of Ms Lorenzato’s case because the policy she relied upon was said to be embodied in the 2002 Resolution.

14. [90]

    By stating at its conclusion that the Council would “therefore… act pursuant to the Notices”, the 14 February letter from the Mayor confirmed that such policy, if that is how it can be described, of the Council as evidenced by item B of the 2002 Resolution was superseded and replaced by the notices.

15. [91]

    After Mr Della Franca, through his solicitors’ letter of 21 February 2003, threatened to seek an injunction to restrain the Council from acting on the notices, the Council’s general manager, Mr Romano, responded by his letter of 5 March 2003 (see [59] above). In paragraph [1] of it, he stated that there “is no agreement on the matter of Council’s rights in relation to the existing pipeline” and gave details of what was not agreed. He then stated in paragraph [2] that “Council has agreed to defer the proposed drainage works through your property until this matter could be resolved”. He then identified various investigations that the Council would undertake. He concluded by stating in paragraph [6] that “Council has agreed not to enter your property in accordance with the notice [sic] issued, and will formally notify you should it wish to proceed in this manner at some time in the future”.

16. [92]

    In these circumstances, it could not be said that the Council had a current “policy” (if it was a policy at all) to act on the notices. Nor, as I have said, was there any other arguably relevant “policy” on foot (see [88] above).

17. [93]

    I respectfully disagree with the primary judge’s reasoning in [267] (see [86] above) on this point. First, his Honour said in relation to the 5 March 2003 letter that “[d]eferment of remediation of the drain was not abandonment”. The relevant issue was however whether there was a policy “that restricts the development of the land because of the likelihood of … flooding”. The position evinced by this letter and earlier communications was that the Council did not by then have a “policy” to do anything except investigate options to address excess stormwater in the area, not all of which necessarily involved any action being taken in relation to the subject land. For example, one identified possibility was that the pipeline might be relocated under an adjacent property – see Mr Wyatt’s letter of 21 March 2003 advising of the outcome of a meeting with Mr Della Franca (see [60] above).

18. [94]

    Moreover, the judge was in error in saying that “what was deferred was the entry under statutory powers”. “Deferment” was not a strong enough word for what occurred as the Council agreed not to exercise those powers without further notice, effectively putting Mr Della Franca in the same position as if no notices had yet been issued. More significant however was that it was not only “entry under statutory powers” that was resiled from but, for the reasons I have given above, such “policy”, if any, as was embodied in the 2002 Resolution.

19. [95]

    For these reasons there was no misstatement in item 7 of the Certificate.

Whether misstatement in item 7A of the s 149 Certificate

1. [96]

   As the primary judge held that there was no misstatement in item 7A of the Certificate, this issue arises by way of Ms Lorenzato’s Notice of Contention which seeks to support his Honour’s judgment on a ground additional to that upon which he relied.

2. [97]

   In relation to the meaning of the expression “flood related development controls” in item 7A of the Certificate, the primary judge referred to the 2005 Floodplain Development Manual (see [81]-[83] above) and to a circular, a Guideline and a Direction, all published in 2007. His Honour continued:

3. [98]

   Ms Lorenzato relied before the primary judge on a Code of Stormwater Management which was adopted by the Council in 1994. The Code sought to prevent stormwater drainage issues through the adoption of policies to be applied in the process of assessing development applications. Ms Lorenzato relied in particular on two of those policies, cll 8.8 and 8.16 of the Code, which relevantly provided as follows:

4. [99]

   In support of her Notice of Contention, Ms Lorenzato submitted that “flood related development control” in item 7A of the Certificate meant any principle or policy:

5. [100]

   I agree with the primary judge that the correct construction of “flood related development control” where used in item 7A of the Certificate and in the corresponding clause of Sch 4 to the Regulation could, and should, be informed by the various published documents to which his Honour referred (see Judgment [278]-[284]). I further agree with his Honour’s reasoning in Judgment [283], [284] and [286], which I have quoted above, in particular that “… in the sense of restrictions imposed by local environmental plans upon residential development by reference to the location of the subject land either above or below an adopted Flood Planning Level”. Ms Lorenzato did not provide any good reason for a different view to be taken, with the result that Grounds 1 to 5 of her Notice of Contention should be rejected.

Whether negligent misstatement

1. [101]

   As I have concluded that there was no misstatement in the Certificate, either in item 7 or item 7A, the question of whether the Council was negligent in making a misstatement in it does not arise. It is sufficient in these circumstances to note the observations of Basten JA at [27] above concerning breach of the standard of care imposed by s 43A(3) of the Civil Liability Act. Those observations, with which I agree, point strongly against any breach, not only of the standard referred to in that sub-section, but also of the ordinary standard, that is, the reasonable care and skill to which Part 1A of the Civil Liability Act refers.

Whether negligence in non-disclosure

1. [102]

   By Grounds 6 and 7 of her Notice of Contention, Ms Lorenzato asserts that the primary judge ought to have found that, even if the statements in items 7 and 7A of the Certificate were correct, the Council nevertheless breached a duty owed to her by failing to disclose in the Certificate that “the pipe ran through the middle of the property, that it was owned by the Council and subject to Council’s statutory rights and that No 13 was affected by overland flooding as a result of inadequate stormwater drainage of Appian Way” (see Judgment [287]).

2. [103]

   She relied in this respect particularly on the fact that item 7 in the Certificate referred to a restriction on development because of “flooding”, whereas the corresponding item in the list of prescribed matters in Sch 4 to the Regulation did not refer to flooding. This came about because the template for the Council’s s 149 certificates was not appropriately amended after the changes to the Regulation in 2007 which deleted the word “flooding” from the list of possible reasons for restricted development in cl 7 in Sch 4 and its place included a new provision, cl 7A, dealing with flood related development controls (see [67] above).

3. [104]

   Ms Lorenzato contended, in my view correctly, that in these circumstances the answer given in the Certificate to item 7 should, insofar as it related to flooding, be regarded as having been given under s 149(5) of the Planning Act, rather than s 149(2). After 2007 that information was not prescribed to be given and its inclusion in the Certificate was thus advice under s 149(5) on another “relevant matter”, which the Council chose to give (see s 149 quoted in [64] above).

4. [105]

   That view does not however assist Ms Lorenzato because, on my conclusions, the additional advice that the Council chose to give was not incorrect and, as the trial judge noted, Ms Lorenzato “was unable to cite authority for the proposition that the scope of Council’s duty of care extended to volunteering information beyond that specified in the Regulation” (at [288]). Likewise, none was cited on appeal.

5. [106]

   The primary judge was in my view correct to conclude that the Council had no obligation to volunteer information that was not prescribed to be given. Its liability would only arise if the information it was required to or chose to provide was incorrect or misleading.

Section 43A of the Civil Liability Act and s 733 of the Local Government Act

1. [107]

   As well as for the reasons given above, Ms Lorenzato’s claim against the Council should be dismissed for the reasons given by Basten JA in relation to the above statutory provisions.

Damages and proportionate liability

1. [108]

   These issues do not arise as on my view Ms Lorenzato’s claim against the Council fails.

MR DELLA FRANCA’S APPEAL

1. [109]

   Mr Della Franca’s appeal challenges the primary judge’s findings that his answers to requisitions on title 6(a), 7, 8(a) and 19 were misleading, and that Ms Lorenzato relied on those answers. He also challenges his Honour’s assessment of damages and award of interest.

2. [110]

   I turn to the requisitions first.

Requisition 6(a) – unregistered easements

1. [111]

   By Ground 1, Mr Della Franca challenges the primary judge’s conclusion that his response of “no” to requisition 6(a) (see [76] above) was misleading. This requisition asked whether the vendor was aware of “any unregistered easements such as a right of way which affect the property?”.

2. [112]

   One issue that arises in this context is whether the rights conferred on the Council by s 59A of the Local Government Act 1993 (NSW) (inserted in the Act in 2002) constitute an “unregistered easement” within the meaning of the requisition. Relevantly, the section states:

3. [113]

   The primary judge’s reasons for finding the answer to the requisition was misleading were as follows:

4. [114]

   The answer to requisition 6(a) was not however in my view required to refer to the Council’s ownership of the pipe, or the Council’s concomitant right of repair and the like, pursuant to s 59A of the Local Government Act. This follows from cl 10 of the sale contract to which reference was made in the course of argument (cl 10 is quoted at [73] above). ­­­­

5. [115]

   That clause in my view precludes the purchaser from requisitioning in relation to the pipe because the pipe is a “service for the property… passing through the property”, “service” being expressly defined to include “drainage”. Special Condition 10 which deals with requisitions (see [72] above) should not be construed so as to sanction a requisition in conflict with this clear and specific provision. As a result, the broad terms of requisition 6(a) in the annexure to the contract should be read so as to conform with the specific exclusion in cl 10.

6. [116]

   If (contrary to this view) the answer to requisition 6(a) was however properly to be regarded as misleading, the further issue would arise of whether Mr Della Franca acted negligently in giving that answer. As I have found the answer not to be misleading, it is unnecessary to deal with this issue which Mr Della Franca’s senior counsel acknowledged was raised for the first time on appeal.

Requisition 7 – notification of any resumption

1. [117]

   The negative answer to this requisition (see [74] and [76] above) was not a misstatement, at least for the reason that even if Mr Della Franca’s knowledge of the 2002 Resolution constituted knowledge of an intended resumption, that Resolution had, to Mr Della Franca’s knowledge, been abandoned by 2010.

Requisition 8(a) – outstanding notifications, claims or requirements

1. [118]

   By Ground 3, Mr Della Franca challenges the primary judge’s conclusion that Mr Della Franca’s answer to Requisition 8(a) (see [76] above) of “not to vendor’s knowledge but purchaser should make own enquiries” was misleading. His Honour found it to be misleading for three reasons:

2. [119]

   As to the first matter, for the reasons given at [93]-[94] above, I disagree that the notices of 4 February 2003 were outstanding: the Council had agreed that it would not pursue them without further notice to Mr Della Franca who was therefore in effectively the same position as he would have been in if the notices had not been issued.

3. [120]

   As to the second matter, which concerns the Council’s notification to Mr Della Franca of the Resolution of 11 June 2002, I do not agree that there was an outstanding requirement of the Council for an easement over the existing drain. For the reasons given at [88] above, there was as at August 2010 no such subsisting requirement.

4. [121]

   As to the third matter, there was in my view no outstanding “claim” by the Council in August 2010.

5. [122]

   The second part of this requisition (commencing “[a]ny such notice, claim or requirement”) indicates that the requisition was concerned with outstanding matters with which the vendor should comply before completion. There was at the relevant time nothing of this type for the vendor to attend to. The Council’s notices of 4 February 2003 were not waiting to be complied with (see [119] above) nor was there anything that the vendor had been required to do, and not done, in connection with the Council’s ownership of the subject pipe. Mr Della Franca had not for example failed to comply with any requirement of the Council to give it access to repair the pipe.

Requisition 19 – restrictions on the use or development of the land

1. [123]

   The primary judge found that Mr Della Franca’s response to requisition 19 (see [76] above) that “purchaser should make own enquiries” was misleading because the correct answer would have been:

2. [124]

   The answer given was that the “purchaser should make own enquiries”. This did not give a negative answer, or indeed any answer, to the requisition. Ms Lorenzato might have had a contractual claim against Mr Della Franca for his failure to answer the requisition but the non-answer that she got cannot in my view be regarded as incorrect or misleading.

Other issues

1. [125]

   For the above reasons, the requisition answers about which complaint has been made were not misleading. As a result, Ms Lorenzato’s claim against Mr Della Franca must be rejected. In these circumstances, the issues concerning reliance on the answers, damages and interest do not arise. Two applications by Mr Della Franca to adduce on appeal further evidence relevant to damages need not therefore be addressed and should be rejected without a decision on their merits. The first was an application to rely on an affidavit of Santo Scarfone sworn 7 September 2021 and the second was made by a post-hearing notice of motion filed on 23 November 2021 to rely upon a further affidavit of the same deponent sworn 23 November 2021.

ORDERS

1. [126]

   In addition to the claim of Ms Lorenzato against the Council referred to above, Ms Lorenzato claimed against the Council in nuisance and was awarded $55,000 (plus interest of $28,846.44) by the primary judge. As this award was not challenged on appeal, it should stand and Ms Lorenzato’s success in obtaining it should be reflected in the costs order in relation to the proceedings at first instance. As the nuisance claim was, in terms of hearing time occupied and judgment recovered, very much Ms Lorenzato’s subsidiary claim, the appropriate orders would be for the Council to pay 25% of her overall costs at first instance with Ms Lorenzato to pay 75% of the Council’s costs at first instance, resulting in an order on a net basis that she pay 50% of the Council’s costs.

2. [127]

   For the above reasons, I propose the following orders:

   1. (1)

      Allow the appeal.

   2. (2)

      Set aside the orders made at first instance on 23 November 2020.

   3. (3)

      Judgment for Ms Lorenzato against Burwood Council in the sum of $83,846.44 to take effect from 23 November 2020.

   4. (4)

      Order Ms Lorenzato to pay Burwood Council’s costs on appeal and 50% of the Council’s costs at first instance.

   5. (5)

      Reject the applications of Mr Della Franca to adduce further evidence on appeal.

   6. (6)

      Allow the appeal.

   7. (7)

      Set aside the orders made at first instance on 23 November 2020.

   8. (8)

      Judgment for Mr Della Franca on Ms Lorenzato’s claim against him.

   9. (9)

      Order Ms Lorenzato to pay Mr Della Franca’s costs at first instance and on appeal.

3. [128]

   BRERETON JA: In March 2011, the respondent Ms Elisa Lorenzato purchased a residential property at 13 Appian Way, Burwood (“the property”) from the appellant in the first appeal, Mr Michael Della Franca, who had held it since 1989. The property is located in the Burwood Local Government area, administered by the appellant in the second appeal, Burwood Council (“the Council”). Attached to the contract for sale was a planning certificate issued by the Council under Environmental Planning and Assessment Act 1979 (NSW) (“EPAA”), s 149, [13] which contained statements to the effect that the land was not affected by a policy adopted by the Council that restricts the development of land because of the likelihood of flooding (in answer to “question 7”, which corresponded to Environmental Planning and Assessment Regulation 2000 (NSW) (“EPAR”), Sch 4 cl 7), and that development on the land for the purposes of dwelling houses was not subject to flood-related development controls (in answer to “question 7A”, which corresponded to EPAR, Sch 4 cl 7A). Further, in the context of the power to include under s 149(5) “advice on such other relevant matters affecting the land of which it may be aware”, the certificate did not refer to flooding, or to the existence under the length of the land from front to rear – including under the house and swimming pool – of a 400mm diameter drainage pipe owned by the Council, which by 2011 had deteriorated, was obstructed, and was causing flooding of the property and surrounding areas, which the Council had investigated.

4. [129]

   The pipe was laid beneath the property in or about 1904, when the Appian Way subdivision was created. A house was built over it in 1911, a pool in 1969, and a patio in 2005. Residents of the Appian Way, including Mr Della Franca, had made frequent complaints to the Council about their properties being inundated by stormwater runoff from the Appian Way during heavy rainfall. The Council investigated this in 2000, and ascertained that the poor condition of the pipe was a cause. In June 2002, the Council, by a duly authorised committee, adopted the following resolution (“the 2002 resolution”):

5. [130]

   Mr Della Franca was informed of that resolution by letter dated 14 June 2002. His then solicitor replied with an invitation to make an “offer of what sum is thought appropriate to acquire the easement as proposed”. Although there were some negotiations over a number of years, nothing eventuated.

6. [131]

   In the course of the conveyancing transaction with Ms Lorenzato, Mr Della Franca, who had learnt of the pipe’s existence as a result of experiencing flooding and the Council’s consequent investigations, answered requisitions on title relevantly as follows:

7. [132]

   In late 2011 and into 2012, after Ms Lorenzato – who had no prior knowledge of the existence of the pipe, or of the associated risk of flooding – acquired the property, stormwater runoff again inundated it, on multiple occasions. The Council ascertained that the pipe was blocked.

8. [133]

   Ms Lorenzato sued the Council and Mr Della Franca for damages for negligent misstatement, based respectively on the EPAA certificate and the above answers to requisitions. She also sued the Council for damages for nuisance. On 23 November 2020, [14] Fagan J gave judgment in her favour against the Council for $1,274,000 plus interest of $726,171, comprising $1,219,000 for damages in negligence and $55,000 for damages in nuisance; and for $1,219,000 and interest of $697,324 against Mr Della Franca. A cross claim by Mr Della Franca against his solicitor was dismissed.

9. [134]

   From those judgments the Council and Mr Della Franca appeal to this Court. Mr Della Franca also appealed against the dismissal of his cross claim against his solicitor, but that appeal has, by consent, been dismissed.

The appeals

1. [135]

   The Council’s appeal impugns conclusions of the primary judge:

   1. (1)

      that the answer to question 7 in the certificate was inaccurate, and that by failing to answer it correctly the Council was liable to Ms Lorenzato for negligent misstatement, and was not protected against liability by s 43A of the Civil Liability Act 2002 (NSW) (“CLA”) or s 733(1)(a) of the Local Government Act 1993 (NSW) (“LGA”). By a Notice of Contention, Ms Lorenzato seeks to uphold the finding of a misstatement on the alternative basis, which the primary judge rejected, that the existence of the pipe was not disclosed pursuant to EPAA, s 149(5);

   2. (2)

      in the assessment of damages; and

   3. (3)

      in rejecting the Council’s proportionate liability defence under Part 4 of the CLA.

2. [136]

   Mr Della Franca’s appeal impugns conclusions of the primary judge:

   1. (1)

      that the answers to requisitions 6(a), 7, 8(a), and 19 were false or misleading, in breach of a duty of care owed to Ms Lorenzato;

   2. (2)

      that Ms Lorenzato relied on the answers to requisitions;

   3. (3)

      in the assessment of damages; and

   4. (4)

      in the award of interest.

The Liability of the Council – the EPAA, s 149, Certificate

1. [137]

   The primary judge relevantly held that:

   1. (1)

      The 2002 resolution was a Council “policy” within the meaning of EPAR, Sch 4 cl 7;

   2. (2)

      The policy had not been revoked or abandoned prior to the issue of the planning certificate;

   3. (3)

      The Council therefore incorrectly answered question 7 in the certificate;

   4. (4)

      In breach of a duty owed to Ms Lorenzato, the Council did not use reasonable care in issuing the planning certificate;

   5. (5)

      CLA, s 43A, did not apply, as the issue of a planning certificate was not the exercise of a “special statutory power”; and

   6. (6)

      Nor did LGA, s 733(1)(a), apply, as the issue of a planning certificate was not the furnishing of advice in relation to the likelihood of flooding.

2. [138]

   In my view, contrary to the primary judge’s holding, the 2002 resolution was not a “policy adopted by the Council … that restricts the development of the land because of the likelihood of … flooding …” within question 7. Although, ultimately, that phrase must be construed as a whole, it is not unhelpful to consider its components. So considered, the 2002 resolution was not a policy; it did not restrict the development of land, it did not do so because of the likelihood of flooding; and even if it did, it had been abandoned.

3. [139]

   What constitutes a “policy” for the purposes of question 7 is not the subject of definition. However, there is a well-recognised distinction between policy decisions and operative decisions. In this context, a “policy” is a statement of guidelines, principles, or criteria of general application, in accordance with which decisions on specific cases will be made. Question 7 was, and would reasonably be understood by a council to be, directed to policies that provide that development on certain land is prohibited or constrained because of the risk of flooding. An example of this is the policy referred to in Mid Density Developments Pty Ltd v Rockdale Municipal Council. [15] The 2002 resolution was not a policy, because it was not a generic statement of guidelines, principles, or criteria, but a specific decision in respect of the subject property.

4. [140]

   Nor did the resolution restrict the development of land in the way that a policy of the kind referred to in question 7 would. The resolution did not of itself restrict development at all. It did not state that development was prohibited or constrained. It did not proscribe any form or extent of development. It was no more than a proposal to proceed in the future in a certain way in certain events. That did not impose any present actual restriction on development. The existence of the resolution did not prevent the owner from carrying out development – including along the western boundary, where it was contemplated that an easement might be required. Any effect that it had was indirect and uncertain.

5. [141]

   Further, to the extent that the resolution did restrict development, it did not do so because of the likelihood of flooding. Any connection with flooding was, again, incidental. If development was restricted, it was because of the proposed acquisition of an easement, not because of the likelihood of flooding.

6. [142]

   For all those reasons, the 2002 resolution was not a policy of the kind which question 7 contemplated. But even if it were a policy, it was abandoned by 2011, when the certificate was issued. In a letter to Mr Della Franca of 14 February 2003, the Council stated:

7. [143]

   The “second option” referred to was that in part B of the 2002 resolution, to “proceed with compulsory acquisition of an easement over the existing pipeline”. In rejecting the argument that the Council had abandoned the policy, his Honour did not refer to this letter, [16] and although it had been noticed earlier in the judgment, [17] only the concluding sentence was noted. Counsel for Ms Lorenzato referred to other correspondence, of 5 and 21 March 2003. However, that correspondence does not detract from the proposition that the 2002 resolution, apparently abandoned by the 14 February 2003 letter, was no longer being pursued; to the contrary, they are consistent with it, in that, in the absence of agreement as to the Council’s rights in relation to the existing pipeline, it was deferring proposed drainage works until that question could be resolved, and would investigate the possibility of relocating the pipe to the eastern boundary, and also of using alternative construction techniques to construct a new pipeline along the western boundary – neither of which are consistent with the acquisition of an easement over the existing pipeline.

8. [144]

   It follows that in my opinion his Honour erred in concluding that the 2002 resolution was a policy of the kind referred to in question 7 of the planning certificate and that the Council had answered the question incorrectly.

9. [145]

   Moreover, his Honour took the view that the duty to exercise reasonable care in issuing the certificate could only have been discharged by giving an answer to question 7 that reasonably accurately conveyed the existence of the 2002 resolution. [18] His Honour said: [19]

10. [146]

    This was said to follow from the following passages in the judgment of the High Court in L Shaddock & Associates Pty Ltd v The Council of the City of Parramatta (No 1): [20]

11. [147]

    In my respectful view, those passages do not state, nor support the proposition, that the duty of care is discharged only if the question is answered accurately. That is all the more so given the standard of care imported by CLA, s 43A(3), which, for the reasons given by Basten JA, I agree is applicable to the issue of a certificate under EPAA, s 149(2): the Council does not incur liability unless its act or omission was in the circumstances so unreasonable that no council could properly have considered it to be a reasonable exercise of the power in question. Even if the answer to question 7 in the certificate were incorrect, a reasonable council, having in mind the content of question 7 and the types of matters which are ordinarily disclosed under it, would not have thought to refer in the answer to an operational, property-specific resolution such as the 2002 resolution, and by failing to do so the Council did not act unreasonably in the sense referred to in CLA, s 43A(3).

12. [148]

    By her Notice of Contention, Ms Lorenzato contended that regardless of the scope of EPAA, s 149(2), the Council was obliged to disclose the existence of the pipe under s 149(5) as a matter affecting the land of which it was aware – particularly because it knew that the pipe was inadequate, in disrepair, and causative of flooding of the property. It was submitted that the primary judge’s rejection of this proposition – on the basis that that there was no principle upon which the content of the Council’s duty could be so enlarged; that, by responding to an application lodged pursuant to s 149(1), the Council could only be taken to providing such information as s 149(2) obliged it to provide; and that, at least absent an explicit request for information about Council infrastructure installed on the property or statutory rights in respect of it, there was no obligation on the Council to address such matters, and no person who received the certificate could reasonably rely upon it as containing full disclosure on those topics – was erroneous. [21]

13. [149]

    In this respect, it is to be observed that the application for a planning certificate requested advice under s 149(5) as well as under s 149(2), and the applicant paid the extra fee ($60) for such advice, over and above the standard fee of $40 for advice under s 149(2). The information concerning the pipe was obviously of considerable relevance and importance to a purchaser of the property. It was, to use the terms of s 149(5), a relevant matter affecting the land of which the Council was aware. It is true that s 149(5) is permissive and not mandatory, but in circumstances where the Council agreed to provide information pursuant to s 149(5), demanded and was paid an additional fee for doing so, and had in its possession material of such obvious relevance affecting the particular land and knew that its certificate would be relied on by a prospective purchaser, the certificate would reasonably be regarded by a prospective purchaser reading it as misleading due to its failure to disclose a material matter within the Council’s knowledge.

14. [150]

    However, the mere fact that the certificate may have been misleading by non-disclosure is insufficient to found liability. Liability depends upon breach of a duty of care. It was submitted that once the Council engaged in giving advice under s 149(5), reasonable care required it to do more than it did. Reference was made to the following passage in the judgment of Gummow J in Pyrenees Shire Council v Day (citations omitted): [22]

15. [151]

    Once again, the relevant standard of care is that referred to in CLA, s 43A(3). Accordingly, the Council will incur liability only if its omission to refer to the pipe was, in the circumstances, so unreasonable that no council could properly consider it to be a reasonable exercise of or failure to exercise its power. The matters that were disclosed under EPAA, s 149(5), were of generic policies affecting the property, rather than of property-specific information. There was a substantial body of evidence that as a matter of practice, property-specific information concerning drainage pipes was not included by councils in s 149 certificates. Save that his Honour noted Mr Olsen’s evidence that, in his experience, he had never seen a disclosure on a planning certificate of aboveground or inground services within a property, [23] his Honour did not refer to this evidence. Ms Lorenzato failed to prove that no council could properly consider the failure to refer to the existence of the pipe to be reasonable in the circumstances.

16. [152]

    Moreover, s 149(6) provides that a council shall not incur any liability in respect of any advice provided in good faith pursuant to sub-s (5). In Mid Density Developments, it was said that good faith calls for more than honest ineptitude, and that there must be “a real attempt by the authority to answer the request for information at least by recourse to the materials available to the authority”. [24] In Port Stephens Shire Council v Booth it was said: [25]

17. [153]

    As Basten JA explains, Ms Lorenzato’s Notice of Contention did not explicitly contend that it should be found that the Council acted other than in good faith, though her counsel’s submissions invited the Court to do so. It is important, when considering the state of mind of a council, to bear in mind questions of attribution. No doubt the Council’s engineering department had, or at some stage had had, knowledge of the existence of the pipe, which it had investigated. However, the property department responsible for answering the request for the s 149 certificate, or at least the relevant persons in it, did not. The evidence established that they conducted the types of inquiries and investigations that are ordinarily conducted in such circumstances. It did not reveal, in respect of the preparation of the s 149 certificate, “no effort at all to take care”, “delegation … to persons known not to be qualified”, “lack of honest endeavour”, or anything like that. In my view, the failure to refer to the existence of the pipe was not shown to be other than in good faith.

18. [154]

    Finally, there is the question of LGA, s 733(1)(a). The Council’s reliance on s 733(1)(a) as a defence was rejected by the trial judge, on the basis that the reference to “advice furnished in good faith by the council relating to the likelihood of any land being flooded or the nature or extent of any such flooding” was not engaged by question 7 in the s 149 certificate, which referred to the existence of a “policy adopted by the Council … that restricts the development of the land because of the likelihood of … flooding”. As his Honour said, that answer is advice concerning the non-existence of any policy of a particular description. It is not advice “relating to the likelihood of … land being flooded”. I agree that s 733(1)(a) would not avail the Council if its answer to question 7 were incorrect. However, it would be engaged in respect of the complaint, raised by the Notice of Contention, that the Council failed to disclose under s 149(5) the likelihood nature and extent of flooding. And in that respect, for the reasons given in respect of s 149(6), the defence would succeed, as the Council did not act otherwise than in good faith.

19. [155]

    The Council was not required to disclose the 2002 resolution in response to question 7 in the s 149 certificate, and his Honour erred in holding otherwise. Insofar as s 149(5) permitted disclosure of the existence of the pipe, the applicable standard is provided by CLA, s 43A, and it cannot be said that the omission to do so in the circumstances was so unreasonable that no council could have considered it reasonable. Further, it was not omitted other than in good faith. Liability of the Council in negligence was not established. This does not affect its liability in nuisance.

The Liability of Mr Della Franca – the Answers to Requisitions

1. [156]

   The primary judge concluded that:

   1. (1)

      Mr Della Franca’s answers to the following requisitions were misleading:

   2. (2)

      The misleading and erroneous answers constituted negligent breaches of Mr Della Franca’s common law duty and implied contractual obligation as vendor to exercise reasonable care that his answers should be accurate.

2. [157]

   It was not in issue at first instance, nor before us, that a vendor owes a common law duty to a purchaser to exercise reasonable care to answer requisitions on title accurately. [26]

3. [158]

   As has been mentioned, the negative answer to requisition 6(a) was found to be misleading on the basis that, although there was no easement granted and no instrument that was capable of being registered but presently unregistered, the Council’s ownership of the pipe that ran through the centre of the property, coupled with its rights under LGA, s 59A(2), to operate, repair, replace and maintain it, were “tantamount” to an easement. [27] Thus, the simple answer “no” was said to be misleading. [28]

4. [159]

   The fact remains that, although there are similarities between the Council’s rights to the pipes and an easement, it was not an easement. The answer was literally correct. Moreover, the requisitions were in a form authorised by and annexed to the contract: Special Condition 10 provided as follows:

5. [160]

   The requisitions must be construed in the context of the contract as a whole, and in particular clause 10.1.2, which provides as follows:

6. [161]

   The effect of clause 10.1.2 was that the purchaser could not make a requisition in respect of a drainage service passing through the property. Requisition 6(a), construed in the context of clause 10.1.2, should not be read as referring to or encompassing a service in respect of which a requisition was precluded. The pipe was such a service. It was not encompassed by the requisition in question, and it follows that the answer was not misleading by failing to refer to it.

7. [162]

   The negative answer to requisition 7 was held to be false because Mr Della Franca had been informed by letter of 14 June 2002 of the Council’s 2002 resolution. The trial judge considered that even if Mr Della Franca thought that the resolution had been abandoned or lapsed, the correct answer would still have been in the affirmative. [29] However, for reasons already given, the 2002 resolution did not remain operative. The Council had abandoned its intention to resume an easement. The requisition did not require disclosure of a notification that was no longer operative or in effect.

8. [163]

   The negative answer to requisition 8(a) was held to be false in several respects: the notifications of 4 February 2003 were said to be outstanding; the notification on 14 June 2002 of the Council’s 2002 resolution requiring an easement was said to be outstanding; and the Council had a “claim” that it owned the pipe and was entitled to enter upon the property to perform work on it.

9. [164]

   However, for the reasons already advanced, the June 2002 notification and resolution were not outstanding; the resolution had been abandoned. The 4 February 2003 notice was, contrary to his Honour’s finding, [30] no longer outstanding: the General Manager’s letter of 5 March 2003 informed Mr Della Franca that the Council would “not … enter your property in accordance with the notice issued, and will formally notify you should it wish to proceed in this manner at some time in the future.” Thirdly, the requisition was concerned with a “notice, claim or requirement issued before contracts were exchanged” which must be complied with by the vendor, and requires that they be complied with before completion. A claim to have a right of entry onto property to perform works is not a claim of the kind comprehended by that requisition.

10. [165]

    The answer to requisition 19 was found to be misleading because the correct answer would have been that Mr Della Franca was aware of restrictions on the use of the land arising from the existing drain, and on development of the land arising from the 2002 resolution. However, for reasons explained above, the 2002 resolution did not restrict development of the land. The existence of a pipe is not a restriction on user. In any event, the answer “purchaser should make own enquiries” was effectively a warning to the purchaser: “caveat emptor”.

11. [166]

    For those reasons, I do not accept that a case of negligent misstatement can be sustained against Mr Della Franca on his answers to the requisitions on title.

Other matters

1. [167]

   In the light of those conclusions, it is unnecessary to address:

   1. (1)

      Mr Della Franca’s complaint that his Honour erred in finding reliance on the answers to requisitions;

   2. (2)

      Both appellants’ complaints concerning the assessment of damages;

   3. (3)

      The question of proportionate liability; and

   4. (4)

      Mr Della Franca’s complaint that the trial judge erred in respect of the discretion to award interest.

2. [168]

   Since judgment was reserved, Mr Della Franca has filed a motion seeking to adduce fresh evidence. Prima facie, the evidence which he seeks to adduce would have been highly relevant on the question of damages, and has become available only recently. However, as Mr Della Franca succeeds on liability, it is unnecessary to consider the question of damages any further, and the motion should be dismissed, with its costs being costs in the appeal.

Conclusion

1. [169]

   The Council’s appeal should be allowed, although Ms Lorenzato should retain her judgment for damages for nuisance in the sum of $55,000 and interest. Mr Della Franca’s appeal should be allowed, and instead there should be judgment in his favour. I agree with the orders proposed by Macfarlan JA.