No 1 Victoria Dragons Pty Ltd v AEN Developments Pty Ltd

By Summons filed on 8 May 2019, the Plaintiff, No 1 Victoria Dragons Pty Ltd (“1VD”), seeks a declaration that it is entitled to specific performance of a document described as the “Nomination Deed” and an order, by way of specific performance of that Nomination Deed, that the Defendant, AEN Developments Pty Ltd (“AEN”), direct a firm of solicitors, Thomson Geer, to release from its trust account an amount of $1,419,736 plus GST to 1VD pursuant to cll 2.2 and 24.1 of the Nomination Deed or, alternatively, that AEN pay 1VD that amount. 1VD seeks a further order that AEN pay the amount of $200,000 plus GST to 1VD pursuant to cl 24.7 of the Nomination Deed. 1VD also seeks equitable compensation, damages, interest and costs.

By an Amended Cross-Summons filed on 10 May 2021, AEN seeks a range of relief based on claims for, inter alia, an implied term in the Nomination Deed, rectification, and misleading and deceptive conduct. AEN seeks a declaration that it is entitled to specific performance of the Nomination Deed, on the basis that cll 24.2 and 24.11 did not cease to be enforceable on rescission, and that it was entitled to rescind the Nomination Deed on 6 November 2018 and seek a release and refund of the Final Instalment (as defined in the Nomination Deed) of the Nomination Fee (as defined) under the Nomination Deed. It also seeks a declaration that 1VD was not entitled to raise certain tax invoices and seek payment of the Final Instalment amount, on the basis that 1VD and the Second Cross-Defendant, Mr Coulston, breached the Nomination Deed and failed to perform obligations under it by 26 November 2018. AEN also raises other claims, which I address below.

The basic facts are uncontested and emerge from the parties’ pleadings and documentary evidence. At the time of the relevant transactions, the State Environmental Planning Policy No 65 (“SEPP 65”) (July 2015) (Ex P2, Vol 2, Tab 1) dealt with the design quality of residential apartment developments and incorporated the “Apartment Design Guide” (17 July 2015) (Ex P2, Vol 2, Tab 2) by reference. The objectives set out in SEPP 65 include, in cl 2(3)(b), “to achieve better built form and aesthetics of buildings and of the streetscapes and the public spaces they define” and, in cl 2(3)(c), “to better satisfy the increasing demand, and changing social and demographic profile of the community, and the needs of the widest range of people from childhood to old age, including those with disabilities”. Clause 6A provides that development control plans cannot be inconsistent with the Apartment Design Guide in respect of, inter alia, apartment size and layout. Clause 28 provides for the determination of development applications, which are to take into account, inter alia, the Apartment Design Guide. Schedule 1 sets out design quality principles relating, inter alia, to context and neighbourhood character, built form and scale, amenity, and, in Principle 8, housing diversity and social interaction. That principle provides, inter alia, that:

On 23 September 2016, 1VD and Mr Overton, a real estate agent, executed a non-exclusive agency agreement in respect of a development site at Kogarah (Ex D7). In October 2016, Mr Yan and Ms Wang, who are associated with AEN, met with Mr Overton and others, but not Mr Coulston of 1VD, at that development site and commenced discussions concerning AEN’s possible acquisition of that development site. AEN, through Ms Wang, then provided undated instructions to its solicitor, Mr Ngo (Ex D1, 7-8) indicating AEN’s then commercial objectives or requirements, including that there should be no fewer than 88 units in the project; no fewer than 19 one bedroom units (including 1 bedroom units with a study) with residential carpet area (not including the balcony) no less than 48 square metres each; no fewer than 60 two bedroom units, with residential carpet area (not including the balcony) no less than 75 square metres each; and no few than 9 three bedroom units, with residential carpet area (not including the balcony) no less than 95 square metres each. Those instructions contemplated a total price payable to acquire the development site of $18 million, from which AEN was to deduct $2 million as the five year rent for a ground floor childcare centre (later abandoned) to be leased to 1VD upon completion of the project. An attached list of units referred to 19 one bedroom units, 60 two bedroom units, 9 three bedroom units, for 88 units in total and a total carpet area of 6,536 square metres.

A draft heads of agreement dated 6 December 2016 (Ex D9), which was substantially different from the Nomination Deed later executed by the parties and had been prepared before Mr Coulston of 1VD had met with Mr Yan of AEN, provided for a payment of $500,000 to be made on execution and that the arrangement would be subject to the gazettal of a 4:1 rezoning of the land, after which further payments would be made including to 1VD.

In early December 2016, meetings took place between representatives of 1VD and AEN. An exchange of text messages between Mr Overton and Mr Coulston on 6 December 2016 refers to a first meeting to take place the following day which would be attended by Mr Yan and his solicitor, Mr Ngo, and Mr Coulston (Ex J1, 708). A meeting invitation records the subject of that meeting as the “Victoria Street Kogarah deal” (Ex J1, 710). That first meeting took place on 7 December 2016 at a restaurant owned by Mr Yan, and I address a dispute as to what was discussed in dealing with the affidavit evidence and cross-examination below.

By a subsequent email dated 7 December 2016 (Ex J1, 711), Mr Coulston sent Mr Overton, AEN’s solicitor (Mr Ngo), and 1VD’s then solicitor (Mr Garling) an updated draft heads of agreement (Ex J1, 712) and confirmed a second meeting for 8 December 2016. That draft heads of agreement recorded the contract price for the land and noted that the total price paid by AEN would be $18 million, equating to $187,500 per hypothetical unit, subject to “a minimum 4:1 F[loor] S[pace] R[atio] at Gazettal; and a minimum 96 units at D[evelopment] A[pplication] approval”. That draft heads of agreement also referred to a first payment of $300,000 to be irrevocably released to 1VD upon signing of a share sale agreement (which was not implemented); a second payment of $550,000 to be irrevocably released to 1VD following notice of rezoning of the land to the minimum of a 4:1 floor space ratio and a third payment of $1,350,000 to be irrevocably released to 1VD within seven days of notice of approval of a development application for a minimum of 96 apartments, and also comprising repayment of 1VD’s design fees for the development application, agreed to be $200,000. That draft heads of agreement also stated, with a handwritten question mark behind it, that:

A second meeting took place at the offices of 1VD’s solicitors on 8 December 2016. Mr Garling made a contemporaneous file note of that meeting (Ex J1, 768) which recorded the attendees as Mr Yan, Ms Wang, Mr Ngo, Mr Overton, presumably in addition to himself and Mr Coulston. He recorded the matters discussed as follows:

AEN was incorporated on or about 8 December 2016 (Ex J1, 771). A second written set of instructions from AEN to Mr Ngo (Ex D1, 63-64), also undated, appears to have been prepared after the incorporation of AEN since it refers to the agreement being signed by the “new company”, AEN. Those instructions record that the approval for the development application should include at least 96 units, with average residential carpet area (not including the balcony) of no less than 75 square metres, with no fewer than 19 one bedroom units, no fewer than 68 two bedroom units and no fewer than 9 three bedroom units. They also refer to a staged payment of $300,000 at signing the agreement; $550,000 within 60 days of the approval of 4:1 floor space ratio by the Council; $15.8 million to the land owners within 120 days of that approval; and $1.55 million to 1VD when approval of a development application for the block was obtained, with a deduction of $200,000 for each unit if the vendor could not ensure the number of 96 units with average residential carpet area (not including the balcony) of not less than 75 square metres in the approved development application. That approach was not adopted in the executed Nomination Deed.

On 9 December 2016, Mr Garling sent an email to AEN’s solicitor, Mr Ngo, regarding a proposed form of Nomination Deed (Ex P6, 776). On 13 December 2016, 1VD’s solicitors followed up with Mr Ngo for an update as to his review of the Nomination Deed (Ex J1, 789). A subsequent draft of the Nomination Deed with the handwritten date of 14 December 2016 (Ex J1, 790; possibly also Ex D5, Tab 1) provided, in a schedule, for a Nomination Fee of $2,196,757, payable in three instalments. Mr Ngo, on behalf of AEN, provided comments on the then draft Nomination Deed on 14 December 2016 (Yan 7.8.20, reaffirmed 1.10.21, [69], [75], [87]; Ngo 7.8.20, [28]). Clause 24.11 of the Nomination Deed then contained an indication of the number of apartments to be included in the development, providing for not more than 15% of one bedroom apartments with not less than 50 square metres of net saleable area; and not more than 10% of three bedroom apartments with not less than 95 square metres of net saleable area. There was no specific reference to studio apartments in those instructions, although I recognise that a studio apartment would ordinarily be of a lesser size.

Several further drafts of the Nomination Deed were then exchanged between the parties’ solicitors. By an email dated 15 December 2016 (Ex J1, 1124; Ex D5, Tab 2), Mr Ngo sent Mr Garling a draft Nomination Deed with proposed amendments which included deleting a provision excluding any representation or warranty in relation to the development application or development approval and amending cl 24.11 of the draft Nomination Deed to provide for not less than 15% but not more than 20% of one bedroom apartments being not less than 50 square metres internal area (excluding balcony area), not less than 70% of two bedroom apartments and not less than 8% but not more than 10% of three bedroom apartments. AEN also sought to obtain a warranty, which 1VD did not give, that the development application would have an approved gross floor area of not less than 8,251.56 square metres.

On 19 December 2016, Mr Garling sent Mr Ngo a further mark-up of the draft Nomination Deed (Ex J1, 1178; Ex D1, 176-203), subject to 1VD’s instructions, and additional documents. Clause 24.11 in that draft Nomination Deed further amended the number of apartments and introduced a proviso that the apartment mix “will at all times be subject to all statutory, authority and Council requirements” and acknowledging that the apartment mix “may be varied pursuant to the requirements of the relevant statutory, authority and Council requirements” and that AEN would not be entitled to make any objection, requisition, claim, rescind or terminate the Nomination Deed as a result of that matter. I will refer to this proviso, which was substantially retained in the executed Nomination Deed after negotiation, as the “variation proviso”, and it prevented an exercise of AEN’s rights adverse to 1VD in respect of a variation of the apartment mix in the specified circumstances.

Mr Ngo forwarded documents including the draft Nomination Deed to Mr Yan’s personal assistant, Ms Wang, on 19 December 2016 (Ex J1, 1206). By email dated 20 December 2016 (Ex J1, 1211), Mr Ngo advised 1VD’s solicitor that Mr Yan would arrive in Australia that day; Mr Ngo would meet Mr Yan that afternoon to discuss the Nomination Deed and all other outstanding issues; and Mr Ngo’s timeframe was to “get everything done” by close of business on 21 December 2016.

A third set of instructions (Ex D1, 65) from AEN to Mr Ngo are also undated and were likely provided shortly before execution of the Nomination Deed, since they raise the possibility of that Deed being signed in both the English and Chinese languages, which was then raised by Mr Ngo shortly before that Deed was ultimately executed only in an English language version. Those instructions provided that:

There is again no reference to studio apartments in those instructions, which referred to a total price of $18.2 million, with $300,000 payable within 5 days of signing the agreement, $550,000 payable within 60 days of the approval of “1:4 plot ratio” [sic] by the Council, $15.8m payable to the land owners within 120 days of such approval, and the balance of $1.55 million payable to 1VD within 15 working days of the approval of the development application for the agreed land block, with a reduction of $190,000 for each unit not approved if the vendor could not ensure 96 units in the approval of the development application, and an additional $65,000 payable for each unit approved in excess of 96 units.

By email dated 21 December 2016, Mr Ngo sent proposed amendments to the Nomination Deed to 1VD’s solicitor (Ex J1, 1244; possibly also Ex D5, Tab 4) and proposed that the Nomination Fee be $20,000, which had already been paid, and the remaining $2,249,736 be dealt with as selling commission payable to 1VD. The amendment sought to exclude the variation proviso in cl 24.11 of the Nomination Deed. The request to exclude that provision supports an inference that AEN, or at least Mr Ngo, had by then rightly recognised that that proviso qualified 1VD’s obligations and limited AEN’s capacity to terminate or rescind the Nomination Deed or avoid payment of the Final Instalment of the Nomination Fee if the apartment mix was varied adversely to its interests in the specified circumstances. AEN was not successful in excluding that provision and ultimately executed the Nomination Deed in a form that limited its rights in that way.

Also on 21 December 2016, a dinner took place at the Golden Century Chinese restaurant in Sydney attended by Mr Yan and Ms Wang of AEN, Mr Overton and his wife Ms Chen, and Mr Coulston of 1VD, apparently anticipating a successful transaction. A photograph recorded Mr Coulston holding a cheque in payment of the first instalment of the Nomination Deed at that dinner (Ex J1, 1407).

By a handwritten note dated 21 December 2016 (Ex J1, 1243), Mr Garling recorded events on that day as follows:

The correspondence between 1VD’s solicitors and AEN’s solicitors between 7 December 2016 and 22 December 2016, and the draft Nomination Deeds, refer to the inclusion of one, two and three bedroom apartments but do not refer to any requirement that there be no apartments smaller than 50 square metres in the development or that there be no studio apartments in the development for which, as I noted above, AEN now contends.

On 22 December 2016, Mr Garling sent Mr Ngo an updated draft Nomination Deed (Ex J1, 1584; possibly also Ex D5, Tab 5) subject to final instructions, and a copy of the deposit slip for the bank cheque provided by AEN to 1VD on account of the first instalment of the Nomination Fee. Clause 24.11 of that draft continued to include the variation proviso protecting a variation of the apartment mix in the specified circumstances, although additional words were added acknowledging that the development approval may not contain more than 22 one bedroom apartments, and providing for a refund of the Final Instalment of the Nomination Fee if that occurred. Again, there was no reference to studio apartments, where the parties had apparently not turned their mind to that question at that time.

Also on 22 December 2016 at 11.48am, Mr Ngo sent Mr Garling a further draft Nomination Deed (Ex P6, 1614; possibly also Ex D5, Tab 6), the changes to which do not appear to affect cl 24.11 of the Nomination Deed. On the same day at 1.47pm, Mr Garling sent Mr Ngo a further draft Nomination Deed (Ex J1, 1673; possibly also Ex D5, Tab 7). At 3.15pm on 22 December 2016, 1VD’s solicitor sent Mr Ngo the final version of the Nomination Deed for execution by AEN, which included a definition of the term “Apartment Design Guide” and included cl 24.11 in its final form (Ex J1,1738; the document may be the same as that at Ex D5, Tab 8, other than for different footers),

1VD and AEN then executed the final version of the Nomination Deed (Ex P2, 1339, 1368). I will address the terms of the executed Nomination Deed in dealing with issues of construction below. It is common ground that, on 22 December 2016, AEN paid the Nomination Fee into the trust account of a firm of solicitors (1VD’s Amended Commercial List Statement (“ACLS”) [4]; AEN’s Commercial List Response (“CLR”) [6]). AEN contends the Nomination Deed was later varied on 29 March 2017 and again on 29 April 2017 (CLR [2]); however, there is no evidence that the relevant variation agreements were executed.

On 26 May 2017, the Kogarah Local Environmental Plan 2012 (Amendment No 2) (New City Plan for Kogarah) (“LEP”) was gazetted (Ex P2, Vol 2 Tab 3). The LEP provided, inter alia, for the introduction of Zone R4 High Density Residential which permitted, inter alia, residential flat buildings with consent. Clause 1.2 of the LEP provided that it sought “… to encourage a diversity of housing choice suited to meet the needs of the current and future residents of Kogarah”; cl 2.3 deals with zone objectives and the “Land Use Table”, and that table refers to an objective “to provide a variety of housing types within a high density residential environment”; cl 4.3 provides for the maximum height of buildings by reference to a “Height of Buildings Map” and it is common ground the permissible maximum height was 33 metres; and cl 4.4 provides for the floor space ratio by reference to a “Floor Space Ratio Map”, which it is common ground was a maximum 4:1 ratio.

Shortly after the LEP took effect, on 2 June 2017, 1VD lodged a development application for the property with Georges River Council (“Council”) (Ex P2, 1870). It is common ground that application was prepared in accordance with the Apartment Design Guide and contained an apartment mix within the range provided in cl 24.11 of the Nomination Deed (ACLS [6], CLR [8]). The relevant design drawings, in version J dated 1 May 2017 (but also recording a date of 19 September 2016) (Ex D1, 412) provided for 17 one bedroom units, 71 two bedroom units, and 8 three bedroom apartments, totalling 96 units, within a building that exceeded the applicable height limit under cl 4.3 of the LEP and could only proceed if Council or the Land and Environment Court did not apply it. That version of the drawings did not include the studio apartments to which AEN objects, where Council’s requirement for an apartment mix including studio apartments was not introduced until January 2018, a matter to which I return below.

It is also common ground that further project drawings, in versions K to U, prepared between July 2017 and 4 September 2018 also provided for an apartment mix that would have complied with cl 24.11(a)-(d) of the Nomination Deed, without need to rely on the variation proviso, and provided for 96 apartments. For example, version U provided for 19 one bedroom apartments, 65 two bedroom apartments, 12 three bedroom apartments and 105 car parking spaces (Ex D1, 971-1002), in a building that exceeded the applicable height limit under cl 4.3 of the LEP and could only proceed if Council or the Land and Environment Court did not apply that limit.

Council did not approve the development application as lodged in June 2017 and, by 14 July 2017, it was deemed to have refused that development application (ACLS [7], CLR [9]). On 17 July 2017, 1VD commenced Class 1 appeal proceedings in the Land and Environment Court (“LEC proceedings”) concerning that deemed refusal (ACLS [8]; CLR [10]; Ex P2, 1874). Mr Yan says that he was first advised of the LEC proceedings on 18 July 2017; no claim for any breach of the Nomination Deed in that regard is raised by AEN’s Amended Commercial List Cross-Claim Statement (“ACCS”).

On 14 September 2017, Council filed a Statement of Facts and Contentions (“SFC”) in the LEC proceedings (ACLS [9]; CLR [11]; Ex P2, 1892) which contended that the height of the proposed building exceeded the mandated LEP height limit of 33 metres by approximately 4 metres and identified an issue as to setbacks to the street and adjoining sites (Ex P2, 1909). On 3 October 2017, Mr Coulston emailed Mr Ngo regarding lodgement of the development application and Council’s SFC (Ex P6, 1944) and advised that:

The Kogarah DCP 2013 – Amendment No 2 – Kogarah North Precinct (“DCP”) was then adopted by Council in late 2017 and came into effect on 10 January 2018 (Ex P2, Vol 2, Tab 4) and applied to the Kogarah North Precinct. Section 14, dealing with housing choice, identifies the objectives of ensuring the provision of a “range of housing types” and “a suitable mix of dwellings that encourages social diversity within the development and addresses the needs for future residents and households” and, under the heading “Controls” provides that:

On 13 April 2018, 1VD filed a Notice of Motion in the LEC proceedings seeking leave to rely on amended plans (“Amended DA”) (Ex P2, 2077), which included 96 apartments across 11 residential levels, comprising 15 one bedroom apartments, 73 two bedroom apartments and 8 three bedroom apartments. It is common ground that the Amended DA was prepared in accordance with the Apartment Design Guide and also contained an apartment mix within the range contemplated by cl 24.11 of the Nomination Deed, although AEN contends that it was not provided a copy of it (ACLS [10]-[11]; CLR [12]-13]).

On 23 April 2018, Mr Coulston emailed Mr Ngo advising that:

By a further email dated 25 April 2018, Mr Coulston sent Mr Ngo a schedule of modifications which he described as “specific changes which have been driven by Council” and indicated that he would also bring a full plan set to the meeting (Coulston 26.8.22, Annexure G).

On 26 April 2018, Mr Coulston met with Mr Yan and Mr Ngo at Mr Ngo’s office in Sydney (Ex P6, 2493). By email dated 29 April 2018, marked “without prejudice” but tendered (Ex D11, 2495) without objection, Mr Coulston advised Mr Ngo he understood from the meeting with Mr Yan and Mr Ngo that:

On 23 May 2018, Council filed an Amended Statement of Facts and Contentions (“ASFC”) in the LEC proceedings in response to the Amended DA, identifying objections to the Amended DA including that the height of the proposed building was not justifiable and contributed to the bulk and scale of the development, and (at part 2.2 Built Form and Scale) that the Amended DA should be refused because it was unacceptable in terms of its built form and scale, and did not meet the Built Form and Scale principles (Apartment Design Guide Principle 2), and that “[t]he proposal exceeds the [LEP] planning control for building height by approximately 28%”, and “exceeds the [LEP] planning control for F[loor] S[pace] R[atio] by approximately 26m2”. Council also there contended the development included insufficient car parking; there were public interest reasons not to approve the development including site isolation and sterilisation of adjacent properties, overshadowing, loss of views, loss of privacy, poor aesthetics, increasing traffic and parking problems in area and a failure to meet the strategic intent of the DCP; and the apartments did not provide adequate amenity in accordance with Principle 6 of SEPP 65 and the Apartment Design Guide (ACLS [12]; CLR [14]; Ex P2, 2498). On 26 May 2018, Mr Coulston sent Mr Ngo a copy of the ASFC (Ex P6, 2519).

On 24 July 2018 the Land and Environment Court handed down its decision in Regent Land Pty Limited atf Regent Land Unit Trust v Georges River Council [2018] NSWLEC 1370, concerning the first application for a development application for a high rise development in the Kogarah North Precinct. Commissioner Smithson rejected that application because that development exceeded the maximum height of 33m and the requirements of cl 4.6 of the LEP to vary the height exceedance were not met, and because its floor space ratio exceeded the maximum permissible floor space ratio of 4:1. The approach there taken by the Land and Environment Court was obviously relevant to the prospects of 1VD obtaining development approval for the project in its then form and 1VD’s architect, Mr Dickson, had regard to it in preparing amended plans for the development that reduced its height.

On 8 August 2018, Mr Dickson, suggested to Mr Coulston that the then development application be further amended to reduce the height of the building by two storeys to meet height restrictions and deliver the apartment mix required under cl 14 of Pt E4 of the DCP by including studio apartments (Ex P6, 2546). I will address Mr Dickson’s evidence of that recommendation below. On 9 August 2018, Mr Coulston sent amended sketches to Mr Dickson which included studio apartments (Ex P6, 2550) and, on the same day, Mr Dickson sent Mr Coulston an email dealing with potential amendments to the Amended DA including variations to the apartment mix to achieve compliance with the Apartment Design Guide (Ex P6, 2551). A meeting then took place on that date at the offices of 1VD’s solicitors, attended by Mr Coulston, Mr Ngo and Mr Huang, who was an adviser or consultant to AEN. Mr Coulston’s evidence is that the possible inclusion of studio apartments in the project was first raised at this meeting. I return to that meeting in dealing with 1VD’s estoppel claim below.

On 12 August 2018, Mr Coulston sent an email to, inter alia, Mr Huang and Mr Ngo (Ex P6, 2555) attaching amended sketches, a dropbox link providing access to the proposed further amended plans, and a letter (Ex P6, 2554) dated 10 August 2018, which stated (in part) that 1VD:

By email dated 14 August 2018 to Mr Ngo, Mr Coulston to Mr Ngo requested an urgent response to that email dated 12 August 2018 (Ex P6, 2556). I return to these emails in dealing with 1VD’s estoppel claim below.

On 17 August 2018, 1VD filed a Notice of Motion in the LEC proceedings seeking orders that the proceedings be expedited or allocated a compressed timetable (Ex P6, 2561).

On 21 August 2018, Mr Coulston emailed Mr Ngo regarding the extension of the DA Sunset Date (as defined) under the Nomination Deed and the proposed amendments to the plans to satisfy statutory and Council requirements necessary for approval (Ex P6, 2594). On the same date, Mr Coulston emailed Mr Dickson regarding amendments to the then Amended DA (Ex P6, 2595). On the same day, Mr Coulston emailed Ms Ware, director of legal services and general counsel at Georges River Council, foreshadowing variations to the apartment mix by including studio apartments to comply with statutory and Council requirements (Ex P6, 2596), as follows:

Ms Ware responded on the same day (Ex P6, 2598) in a manner that recognised the delay in the LEC proceedings but also made clear that Council continued to require that the development not exceed the maximum height requirement under the LEP and also gave weight to compliance with the Apartment Design Guide, and otherwise appeared supportive of 1VD’s changed approach:

On 22 August 2018, Mr Dickson’s firm emailed Mr Coulston an amended set of drawings incorporating studio apartments (Ex P6, 2601) and, on 23 August 2018, Council filed an Agreed Statement of Facts in the LEC proceedings (Ex P6, 2615). On 24 August 2018, Mr Coulston emailed Mr Ngo regarding revocation of a termination notice previously given by 1VD (to which tangential reference was made in these proceedings) and an extension of the DA Sunset Date under the Nomination Deed (Ex P6, 2631); on 30 August 2018, he emailed Mr Ngo claiming that 1VD continued to work in good faith in accordance with Nomination Deed in order to obtain approval (Ex P6, 2633); and, on 1 September 2018, he emailed Mr Ngo attaching a letter providing an update on the progress of the development application (Ex P6, 2636). AEN contends that letter represented that the development application as agreed was being prosecuted and that was a “false statement”; however, no such claim is raised by AEN’s Amended Commercial List Cross-Claim Statement.

On 7 September 2018, 1VD filed a Notice of Motion in the LEC proceedings seeking leave to rely on further amended plans (“Further Amended DA”), which reduced the height of the building from 11 to 9 storeys, and reconfigured the apartments in the building to provide a residential gross floor area of 7,284 sqm consisting of 96 apartments, made up of 17 studio apartments, 21 one bedroom apartments, 54 two bedroom apartments and 4 three bedroom apartments (Ex P6, 2638).

On 9 September 2018, Mr Coulston emailed Mr Ngo requesting a response to his email dated 1 September 2018 (Ex P6, 2646). AEN contends this email was “[f]urther misleading conduct” where 1VD’s actions of 7 September 2022 are not disclosed, but no such claim is raised by its Amended Commercial List Cross-Claim Statement. Version V of the project drawings, dated 19 September 2018, reflects a reduction in the height of the building to comply with cl 4.3 of the LEP and a change in the apartment mix in a manner that improves compliance with the apartment mix requirements of the DCP. It provides for 17 studio apartments; 21 one bedroom apartments; 54 two bedroom apartments, 4 three bedroom apartments and 97 car parking spaces, and reduces the gross floor area to about 7,250 square metres and reduces the floor space ratio below 4:1 ratio as a result of reducing the height of the building and providing street setbacks (Ex D1, 1123).

On 23 September 2018, Mr Coulston emailed Mr Huang and Mr Ngo providing an update regarding the development application approval process, including the reduction in height and variation of the apartment mix, which formed part of the orders ultimately made in the LEC proceedings approving the final version of the development application (“Final DA”) (Ex P6, 2647). He initially referred to a negotiated outcome that had been achieved with Council in respect of another project and then observed that:

On 26 September 2018, Mr Coulston emailed Mr Ngo outlining the Council’s remaining issues with the Final DA, and stating that one of the strategies being used was the inclusion of smaller Apartment Design Guide compliant studio apartments into the apartment mix (Ex P6, 2648). He there observed that:

On 4 October 2018, Mr Dickson’s firm emailed amended architectural plans for inclusion in the Final DA to Mr Coulston (Ex P6, 2654) and, by email dated 5 October 2018, Mr Coulston sent Mr Ngo a copy of those plans (Ex P6, 2656, 2658) and advised that those plans:

On 14 October 2018, Mr Coulston advised Mr Ngo that approval was likely to be obtained in accordance with the final architectural plans sent to Mr Ngo on 5 October 2018 (Ex P6, 2717). I return to these emails in dealing with AEN’s estoppel claim below.

On 17 October 2018, Council and 1VD reached agreement for approval of the Final DA at a conciliation conference under s 34 of the Land and Environment Court Act 1979 (NSW) (Ex P2, 2718) and they then requested the Land and Environment Court dispose of the proceedings by granting leave for 1VD to rely on amended plans, drawings and documents as specified. The Land and Environment Court made the requested orders on 23 October 2018 (Ex P2, 2896).

On 25 October 2018, 1VD’s solicitors sent AEN’s solicitors a letter advising of the approval of the Final DA by the orders made in the LEC proceedings and calculating the Final Instalment of the Nomination Fee payable under the Nomination Deed as $1,419,736 plus GST. That letter enclosed a tax invoice claiming development approval cost of $200,000 plus GST and attached a copy of the “Final Development Approval comprised of the Notice of Orders made by the Land and Environment Court of New South Wales in case number 2017/00217118” and a zip file with copies of tax invoices incurred by 1VD in respect of the development application in excess of $200,000 plus GST (Ex P2, 2953). 1VD contends, and AEN denies, that the approval of the Final DA was a Development Approval within the meaning of the Nomination Deed and that the Final Instalment of the Nomination Fee calculated in accordance with item 2(c) of the Schedule to the Nomination Deed is $1,419,736. 1VD also pleads that it has incurred reasonable consultant costs for the preparation of the development application, in excess of $200,000 plus GST and claims payment of that amount.

Mr Coulston then met with Mr Ngo and with Mr Yan’s wife and daughter on 5 November 2018 and recorded what occurred at that meeting in an email (Coulston 26.8.22, Annexure E) to his solicitor on the same day. He observed that:

It is common ground that, on 6 November 2018, AEN’s solicitor sent a letter to 1VD which purported to rescind the Nomination Deed.

By letter dated 6 March 2019, the then solicitors for 1VD noted the dispute between 1VD and AEN in relation to the Nomination Fee and indicated they would abide any Court order that bound the parties to the Nomination Deed and not release the Nomination Fee unless pursuant to a Court order or an agreement between the parties to the Nomination Deed (Ex P1).

Both parties lead evidence of oral conversations, and AEN particularly relies on such conversations for its representational and rectification cases. I should first identify the principles which I should apply in dealing with that evidence. Even apart from the particular difficulties which arose with Mr Yang’s and Mr Ngo’s evidence, which I address below, I have regard to the fallibility of human memory which increases with the passage of time, particularly where disputes or litigation intervene: Watson v Foxman (1995) 49 NSWLR 315 at 318–319; Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810 at [41]; Varma v Varma [2010] NSWSC 786 at [424]–[425]. I also have regard to the fact that objective evidence, where available, is likely to be the most reliable basis for determining matters of credit that arise as to the affidavit evidence: Armagas Ltd v Mundogas SA [1985] 1 Ll R 1 at 57; Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789 at [10] (“Colorado”).

The principles applicable to assessing claims for representations in oral form were also helpfully summarised by Slattery J in Ventouris Enterprises Pty Ltd v Dib Group Pty Ltd [2010] NSWSC 963 at [87] as follows:

I also note the matters relevant to the assessment of spoken words in the context of a contractual dispute, which were identified by Hammerschlag J (as his Honour was then) in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [95]:

I also bear in mind the observations of Bell P (as the Chief Justice then was, with whom Bathurst CJ agreed) in ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24 at [27]-[29]:

I have here also drawn on my summary of the applicable principles in Re Atlas Advisors Australia Pty Ltd [2022] NSWSC 705 (“Atlas”) at [5].

Turning now to the affidavit evidence, 1VD tendered documents to establish its case in chief (Ex P2) and also read, in chief, the affidavit dated 5 March 2021 of Mr Robert Dickson, who has extensive experience as an architect, urban designer and planner and was engaged by 1VD to work on the development. Mr Dickson identified relevant requirements to which he had regard in preparing the development application including the LEP, the Apartment Design Guide and SEPP 65 and the DCP, and referred to the “Housing Choice” objectives and controls in cl 14 of Pt E4 of the DCP.

Mr Dickson outlined the history of the lodgement of the development application with Council on 2 June 2017, the LEC proceedings, the lodgement of the Amended DA on 13 April 2018 and the ASFC filed by Council in the LEC proceedings in response to the Amended DA. His evidence (admitted with a limiting order under s 136 of the Evidence Act 1995 (NSW) as identifying the topic of the discussion) was that, on 8 August 2018, he telephoned Mr Coulston:

Mr Dickson’s evidence was that he then advised Mr Coulston that:

Mr Dickson then referred to the steps taken which led to the lodgement of the Further Amended DA with Council in early September 2018, which provided a gross floor area of 7,284 sqm consisting of 96 apartments, being 17 studio apartments, 21 one bedroom apartments, 54 two bedroom apartments and 4 three bedroom apartments, comprising 18% studio apartments, 22% one bedroom apartments, 56% two bedroom apartments and 4% three bedroom apartments, and reducing the building height by two floors from 11 to 9 floors. Mr Dickson refers to a further meeting on 5 March 2021 when a representative of Council agreed that the plan was suitable but sought an offset of the building from the side boundary, and to the approval of the Final DA by the orders made by the Land and Environment Court on 23 October 2018.

By his second affidavit dated 29 August 2022, Mr Dickson referred to a number of further documents, including a summary of the Nomination Deed which had been provided to him in September 2017. By his third affidavit dated 31 August 2022, Mr Dickson referred to the statutory requirements to which he had regard in drafting relevant plans, and the objectives which he had sought to achieve in doing so.

Mr Dickson was cross-examined at substantial length by Mr Santisi who appears for AEN. He was cross-examined at length as to many design drawings for the project (Ex D1) which demonstrated, unsurprisingly, that the design drawings provided for a building of greater height, which did not contain studio apartments, until they were amended in the course of the LEC proceedings to provide for a building of lower height and to introduce provision for studio apartments at the same time. I have referred to several of those drawings in the chronology which appears above.

Mr Dickson presented as highly experienced and knowledgeable in respect of architectural and planning matters and I formed the view that he was a plainly honest witness doing his best to assist the Court. He provided some relatively fulsome answers to questions, but I am satisfied that he did so in order to assist the Court in understanding the relevant requirements and the process which he adopted. There was no apparent basis for Mr Santisi putting to Mr Dickson, as he did, that he had been untruthful in his evidence to the Court; it was not surprising that Mr Dickson did not accept that proposition; and I also do not accept that proposition. Mr Dickson’s cross-examination supports a finding that the change in apartment mix made by 1VD was prompted by the wish to reduce the height of the building so as to comply with the 33 metre height limit, maintain the number of apartments in the building at 96 apartments and comply with the apartment mix requirement under the DCP in a manner which Mr Dickson believed would have architectural merit, by placing studios next to other apartments within a “dual key” design. Not surprisingly, Mr Dickson accepted, and I find, that that amendment in the design was prompted by the need to comply with required height limit, as well as by the perceived advantage of complying with the apartment mix requirement in the DCP in persuading Council to consent to the grant of development approval in the LEC proceedings, as it did after that change was made. I will address the consequences of that finding below.

1VD relies on five affidavits dated 17 January 2020, 5 February 2021, 8 March 2021, 26 August 2022 and 7 September 2022 of its director, Mr Coulston. Mr Coulston’s first affidavit was directed to the relatively narrow contractual claim brought by 1VD against AEN, before the issues in the proceedings were substantially expanded by AEN’s Amended Commercial List Cross-Claim Statement. Mr Coulston there referred to 1VD’s entry into option deeds in relation to the several properties at Kogarah, between late December 2014 and mid-July 2015, and the entry into the Nomination Deed with AEN on 22 December 2016. Mr Coulston also referred to relevant statutory instruments and Council requirements in respect of the design of the development, including SEPP 65, the Apartment Design Guide, and to the lodgement of the development application with Council on 2 June 2017. He addressed subsequent steps in the LEC proceedings including 1VD’s Notice of Motion seeking leave to rely on amended plans filed in the LEC proceedings on 13 April 2018, and ongoing negotiations, discussions and joint conferences between expert witnesses, 1VD and Council. Mr Coulston also referred to the requirements of the DCP, the further Notice of Motion filed by 1VD on 24 July 2018 seeking to rely on further amended plans and an email sent by Mr Dickson, on 9 August 2018, regarding amendments to the Amended DA including variations of the apartment mix to achieve compliance with the Apartment Design Guide, and to subsequent correspondence with Mr Huang, an adviser or consultant to AEN as I noted above, and with Mr Ngo as AEN’s solicitor. Mr Coulston also refers to further correspondence with Council and with 1VD’s architect, Mr Dickson and employees within his firm, and further correspondence to Mr Ngo on behalf of AEN.

Mr Coulston also referred to a conversation, about 24 September 2018, with Mr Ngo relating to the Final DA. Mr Coulston’s evidence is that he had a conversation on the next day with Mr Ngo relating to the Final DA (Coulston 17.1.2020, [82]), as follows:

By his second affidavit dated 5 February 2021, Mr Coulston responded to evidence led in respect of AEN’s cross-claim and particularly the affidavits of Mr Yan, Ms Wang (which was not read as she was not available for cross-examination) and Mr Ngo. Mr Coulston took issue with Mr Yan’s evidence that Ms Wang acted as his interpreter and his evidence was that Mr Ngo acted as Mr Yan’s interpreter. It is not necessary to resolve that dispute, although the probability is that both Ms Wang and Mr Ngo assisted Mr Yan with translation at various times. Mr Coulston’s evidence was that AEN first objected to the inclusion of studio apartments in the Final DA at a meeting on 5 November 2018, where AEN contended that the studio apartments were one bedroom apartments and that there were more than 22 one bedroom apartments in the development, for the purposes of the Nomination Deed (Coulston 5.2.21 [6(g)]). I have referred to that meeting in the chronology that appears above. That affidavit also summarised the disbursements which AEN incurred in respect of the development after the date on which 1VD conveyed to AEN that its design had been amended to include studio apartments, totalling $140,496.55. Those disbursements are relevant to 1VD’s estoppel claim that I address below.

Mr Coulston there denied several allegations made in Mr Yan’s and Mr Ngo’s evidence, including that anyone had said to him that apartments less than 50 square metres in size could not be included in the development application; that he had guaranteed that apartments of less than 50 square metres would not be included in the apartment mix in the development application; that he guaranteed or agreed that a minimum of 130 carparking spaces would be included in the development application or the final plans for approval; or that Mr Yan or Mr Ngo described units by reference to their size or square meterage in meetings he attended with them. Mr Coulston also responded to Mr Yan’s evidence of the 7 December 2016 meeting and gave evidence that he met Mr Yan only three times before the Nomination Deed was signed on 22 December 2016, at the 7 and 8 December 2016 meetings and the 21 December 2016 dinner meeting, and denied that he had met Mr Yan at the project site in Kogarah. AEN now accepts that Mr Coulston’s evidence as to the latter matter is correct.

I accept Mr Coulston’s evidence (Coulston 5.2.21, [23(j)]) that he said to Mr Yan, at that meeting, words to the effect that:

Mr Coulston also responded to other aspects of Mr Yan’s evidence. Mr Coulston also responded to Mr Ngo’s evidence, and took substantially the same position that he took in response to Mr Yan’s evidence. That is not surprising, given the extent to which Mr Yan’s affidavit had been copied into Mr Ngo’s affidavit, or vice versa, as I will note below.

By his third affidavit dated 8 March 2021, Mr Coulston responded to Mr Yan’s affidavit dated 7 August 2020 and agreed that, during meetings with Mr Yan in December 2016, Mr Yan had repeatedly said through his interpreter that he wanted “at least 96 apartments” and said that Mr Coulston had responded that “I will aim to achieve 96 apartments”. Plainly, Mr Coulston’s version of that conversation did not amount to a guarantee that 96 apartments would be achieved.

By his fourth affidavit dated 26 August 2022, Mr Coulston gave evidence that the meeting on 7 December 2016 at Mr Yan’s restaurant, to which I referred above, was approximately 30 minutes long and had an “informal” feel and that the parties did not discuss the terms or conditions on which 1VD and AEN would enter into an agreement. Mr Coulston qualified that position in cross-examination, as I will note below. Mr Coulston also referred to the meeting of about two hours on 8 December 2016 at the offices of 1VD’s solicitors, attended by Mr Garling, Mr Ngo and Mr Overton and indicated that he did not recall if Ms Wang was present. He also referred to the dinner with Mr Yan and others at the Golden Century Chinese restaurant on 21 December 2016, and his evidence was that dinner lasted for approximately two or three hours. He also referred to additional documents and correspondence with Mr Ngo.

By his fifth affidavit dated 7 September 2022, Mr Coulston responded to Ms Chen’s affidavits, to which I refer below, particularly in relation to the meeting at Mr Yan’s restaurant on 7 December 2016 and annexed documentation that supported his evidence that he arrived for that meeting just after 9.30am, and reiterated his evidence that Mr Ngo interpreted what Mr Yan was saying in business meetings from Mandarin to English and what Mr Coulston was saying to Mr Yan from English to Mandarin. Mr Coulston’s evidence was that the meeting on 7 December 2016 was a casual “meet and greet” prior to the substantive meeting on the following day at the offices of 1VD’s solicitors, and there were no formal discussions about business matters concerning the number of apartments in the mix at that meeting. Mr Coulston accepted in cross-examination that some business matters must have been discussed at that meeting, although he said he did not recall them, since he had amended a draft heads of agreement between 7 and 8 December 2016 by making changes that likely reflect discussion of those matters on 7 December 2016. The concession was fairly made.

Mr Coulston was cross-examined at some length. He presented as an intelligent witness, who largely directly responded to questions (albeit with moments of impatience) and made appropriate concessions, including conceding that his recollection of some matters was limited. He maintained his evidence in cross-examination that he had not guaranteed that he could achieve 96 larger apartments to Mr Yan and that there had been no discussion whether or not studio apartments could be included in the project prior to his raising the possibility of doing so in August 2018. He also reaffirmed his evidence that he had never been informed that studio apartments or apartments less than 50 square metres in area could not be included in the proposed development. I accept his evidence in that regard, which is consistent with the absence of reference to that position in contemporaneous documentation. There is no inconsistency between Mr Coulston not recalling some matters and his having a clear recollection of what was not said.

AEN read affidavits of its director, Mr Yan, and its solicitor, Mr Ngo, in the proceedings, and also sought to read an affidavit of Mr Yan’s former personal assistant, Ms Wang, but was not permitted to do so where she was not available for cross-examination. AEN also read, by leave, three late affidavits of Ms Chen. I first address the detail of this evidence, before turning to a wider issue affecting both Mr Yan’s and Mr Ngo’s evidence.

AEN read Mr Yan’s affidavit dated 7 August 2020, and reaffirmed on 1 October 2021, which was lengthy, comprising 376 paragraphs over 63 pages, although Mr Yan had limited personal involvement in the dealings which were in issue. Substantial parts of that affidavit were not admissible and were not admitted; as I will note below, large parts of that affidavit were identical, word for word, with Ms Wang’s affidavit dated 7 August 2020 which was not permitted to be read where Ms Wang was not available for cross-examination; and, as I will also note below, other parts of that affidavit were identical to parts of Mr Ngo’s affidavit dated 7 August 2020. Mr Yan and Ms Wang made substantially the same errors in substantially the same terms as to what had occurred at several meetings, a matter that I address below, and sought to correct those errors when they became apparent at substantially the same time in substantially the same terms.

Mr Yan’s evidence is that he was and is the director and shareholder and the only decision-maker for AEN. Mr Yan referred to being approached about the Kogarah project in August 2016, prior to the incorporation of AEN, through a migration agent known to him, Ms Chen, who was Mr Overton’s wife. Mr Yan referred, in an error which also occurred in Ms Wang’s affidavit in identical words, to his and Ms Wang attending the Kogarah site in early 2016 and having been introduced to Mr Coulston by Mr Overton and his wife. Mr Yan attributed a lengthy explanation of the project to Mr Coulston, in identical words to those which appeared in Ms Wang’s affidavit, and set out his equally lengthy reply, which he says Ms Wang translated for Mr Coulston and Mr Overton as follows:

Mr Yan goes on to attribute further lengthy speeches to Mr Coulston and Ms Wang. I am satisfied that these conversations did not occur in these terms; Mr Ngo’s lengthy recollection of what was said to him, and what he said, as translated by Ms Wang, is inconsistent with his lack of precise recollection of other matters in cross-examination; and his evidence is fundamentally undermined by the fact that Mr Coulston had not attended that meeting.

Mr Yan also gives evidence of a second meeting in early December 2016, at which he again attributes a lengthy speech to himself, which he had asked Ms Wang to translate for Mr Coulston, in words identical to the evidence of that conversation contained in Ms Wang’s affidavit, and then attributes lengthy speeches to Mr Coulston and a further lengthy speech to himself (Yan 7.8.20, reaffirmed on 1.10.21, at [54]ff). I am satisfied that these speeches do not reflect Mr Yan’s genuine recollection, or even reconstruction based on recollection, but have been consciously or unconsciously shaped to advance AEN’s case. Mr Yan then addressed, partly in inadmissible evidence, the continuing negotiations which took place between the solicitors after he had returned to China, and parts of that evidence were also identical to Ms Wang’s evidence concerning those matters. Mr Yan’s evidence, which I admitted with a limiting order under s 136 of the Evidence Act as to his understanding, where a rectification case was brought, was that the draft Nomination Deed:

I do not accept that evidence, so far as it implies that Mr Yan or Mr Coulston had then turned their minds to the question of studio apartments or that the Nomination Deed addressed the position as to studio apartments. Mr Yan’s evidence in cross-examination supports the finding, which I make, that he had not then turned his mind to that question.

Mr Yan in turn gave evidence (Yan 7.8.20, reaffirmed on 1.10.21, [71]), which can go no higher than his understanding, that:

I do not accept this evidence, so far as it advances a proposition that Mr Yan had then turned his mind to the question of studio apartments; that he had actively considered the question whether a studio apartment or one bedroom apartment was the same, with the only difference being its size; that he had asked for an agreement dealing with the question of studio apartments or had been told that Mr Coulston had agreed to that matter; or that the agreement, as formed, dealt with the question of apartments generally of less than 50 square metres, rather than one bedroom apartments of less than 50 square metres. Mr Yan’s affidavit continued, at some length, to describe his understanding of the Nomination Deed in respect of its treatment of studio apartments and apartments of less than 50 square metres, and addressed, in evidence that was largely inadmissible and not admitted, and which was also in substantial part identical with Ms Wang’s affidavit, subsequent steps in which he had not been involved.

By a second affidavit dated 26 April 2022, Mr Yan responded to aspects of Mr Coulston’s evidence. His evidence was that, until late 2018, all design drawings provided to him did not provide for apartments less than 50 square metres internally and the need for studios smaller than 50 square metres to be included was never raised (Yan 26.4.22 [10]). That is not surprising, where that issue did not arise until the height of the building was reduced in the course of the LEC proceedings, as I noted above. Mr Yan accepted that he was mistaken in his recollection of having met Mr Coulston at Kogarah in October 2016 (Yan 26.4.22 [11]), as Ms Wang was also mistaken in her corresponding affidavit evidence concerning the same meeting. Mr Yan accepted that he first met Mr Coulston in December 2016 at his restaurant (Yan 26.4.22 [15]). Mr Yan also referred to a second meeting in a more formal environment, and accepted that that was likely held at the office of 1VD’s solicitor and that Mr Ngo was present (Yan 26.4.22 [18]). Mr Yan also addressed other aspects of Mr Coulston’s evidence at some length.

Mr Yan was cross-examined, through an interpreter, and it was apparent that he had limited recollection of events, but was anxious to advance his case by asserting the construction which he contends should be given to the Nomination Deed, irrespective of whether a question raised that matter. Mr Yan was cross-examined as to the meetings on 7 and 8 December 2016 which he had not recalled in his first affidavit but had addressed in his second affidavit. His evidence in cross-examination (T274) was initially that he recalled two meetings with Mr Coulston, later amended to three meetings, one at his restaurant (which would be the 7 December 2016 meeting), one at his solicitor’s office (which may refer to the 8 December meeting, although that took place at the office of 1VD’s solicitor) and a third at a Chinese restaurant (which would be the 21 December meeting). Mr Yan’s evidence, inconsistent with the contemporaneous documentation, was that the first meeting at his restaurant occurred in the afternoon, closer to 6 pm than 2 pm and went for more than half an hour (T275). The error in the time of the meeting, and the limits in what he recalled, is significant so far as it emphasises that, unsurprisingly, his memory of these matters is not strong, despite the detail with which they were addressed in his affidavit evidence.

Importantly, Mr Yan acknowledged the lack of reference to studio apartments in discussions and negotiations 2016 in cross-examination, as follows:

That acknowledgment falsified the affidavit evidence that Mr Yan (and Ms Wang) had previously given that that matter was expressly discussed (Yan 7.8.20, reaffirmed on 1.10.21, [43], and to similar effect, Wang 7.8.20, [32]; Yan 7.8.20, reaffirmed on 1.10.21, [45]).

Mr Yan’s evidence in cross-examination was ambiguous as to any instruction he had given in respect of units of a size of 50 square metres, although he referred to discussion of one, two and three bedroom units (T278, 280) and accepted that any reference to that size was directed to the size of one bedroom units:

Mr Yan was unable to offer any adequate explanation of how substantial parts of his affidavit came to be identical with substantial parts of Ms Wang’s affidavit, or how he and Ms Wang had come to make the same errors in their evidence and correct them in the same way. He was not cross-examined as to the extent of the similarities between his and Mr Ngo’s affidavit evidence, which I will note below. It seems to me that Mr Yan’s evidence reflected only a weak recollection of events and was, at best, a reconstruction shaped to advance AEN’s case, and affected by whatever steps had brought about its identity with large parts of Ms Wang’s evidence. I do not accept Mr Yan’s evidence, unless corroborated by documents, and it is largely not corroborated by documents in respect of relevant aspects of AEN’s cross-claim.

AEN also read two affidavits of its solicitor, Mr Ngo, which dealt with contested factual matters, although he continued to act for AEN in the proceedings. By his first affidavit dated 7 August 2020, Mr Ngo’s evidence was initially that he was not involved in any meetings prior to 22 December 2016 (Ngo 7.8.20, [15]), although he subsequently corrected that evidence in his second affidavit. He referred to the instructions which he received from AEN, which I set out in the chronology above, and to his “understanding” that no apartment was to be smaller than 50 square metres (Ngo 7.8.20, [29]) and to the drafting of cl 24.11 of the Nomination Deed. He also addressed events after 22 December 2016 in terms that substantially corresponded to Ms Wang’s and Mr Yan’s affidavits concerning those events, as I will note below. By his second affidavit dated 1 April 2022, Mr Ngo addressed Mr Coulston’s affidavit dated 5 February 2022 and gave evidence, for the first time, that he recalled being present at the meeting at 1VD’s solicitors’ office on 8 December 2016, although his evidence was that he did not do any interpreting at that meeting and knew little about what was happening, where this was the first occasion on which he was asked to attend a meeting in the matter. Mr Yan also took issue with Mr Coulston’s account of a meeting in April 2018 in that affidavit.

Mr Ngo was cross-examined. He accepted that he did not have records of, inter alia, the meetings that he attended in relation to the matter in December 2016, or any telephone conversations he had with Mr Yan in December 2016 about the development site, or the meeting that he attended at the offices of 1VD’s solicitors on 8 December 2016, or the dinner at the Golden Century Restaurant on 21 December 2016 (T321, 323). He accepted that his initial recollection, set out in his first affidavit, as to when he first attended meetings in the matter was incorrect (T322). He accepted that he attended the 8 December 2016 meeting at 1VD’s solicitors’ office, although he did not recall it and had not referred to it in his first and second affidavits (T321), and he had also not referred to the 21 December 2016 dinner meeting in those affidavits (T323). He accepted that he had no record of any written instruction given by Mr Yan that apartments smaller than 50 square metres were to be excluded from the development, although he approached that question in cross-examination in a somewhat argumentative fashion, as follows:

Mr Ngo also had no records within the file maintained by his firm recording any instruction from Mr Yan that there were to be no studio apartments within the development (T330). I recognise the possibility that that answer reflects a general lack of records of any oral instructions given by AEN, rather than a lack of records of instructions as to that particular matter. I also recognise that the lack of records of these matters will likely have impacted on the reliability of Mr Ngo’s evidence. I am not persuaded by Mr Ngo’s evidence, to the extent it is to be understood as indicating that he received any oral instructions that there were to be no apartments of less than 50 square metres in area. There are several obvious difficulties with that evidence, including that Mr Ngo did not approach the Nomination Deed in a manner consistent with his having received such an instruction; no experienced solicitor would proceed on the basis that he did not seek to reflect such an instruction in the relevant contract because it was the “common understanding” of the parties which that contract was intended to document; and Mr Ngo does not now suggest that he had failed to implement an instruction that he was given in that regard.

I will address other aspects of Mr Ngo’s cross-examination below, where he gave varying accounts of the manner in which identical paragraphs were included in the affidavits of Mr Yan and Ms Wang and his own affidavit.

AEN also read, by leave, two affidavits of Ms Chen dated 30 August 2022 and a third affidavit dated 6 September 2022. In her first affidavit, Ms Chen’s evidence was that she introduced Mr Yan to Mr Overton, who was then working as a real estate agent, and attended with Mr Overton and Mr Yan at the Kogarah site at the end of 2016, presumably at the October 2016 meeting to which I have referred above. Ms Chen’s evidence is that she also attended a lengthy dinner “meeting” in early December 2016, lasting several hours, at the “Beijing Restaurant”. She referred to having observed Mr Coulston and Ms Wang in conversation “regarding” the project at that dinner and that she observed Ms Wang “interpreting things” for Mr Yan, from what Mr Yan was saying in Mandarin and from English to Mandarin. Her evidence was that she “saw nothing wrong” with the interpretations and saw “now [sic] difficulty in the interpreting”. Ms Chen also referred to her understanding that Ms Wang had qualifications in English.

Ms Chen disagreed with Mr Coulston’s evidence that the first meeting at the restaurant was “casual” and referred to a “casual” meeting later that month at the “Neptune restaurant”, which she then corrected in her second affidavit to refer to the Golden Century restaurant. Ms Chen also recalls Mr Yan saying to Ms Wang that he did not want apartments less than 50 square metres in the development application and wanted more larger apartments, and Mr Yan saying he wanted no less than a number (which she does not recall) of apartments in the mix and wanted more 2 and 3 bedroom apartments and that “if you achieve a better result then I will pay you more”. Plainly, that statement could only have been made by Mr Yan in Mandarin to Ms Wang, since he does not speak English; Ms Chen then says that she “saw” Ms Wang repeating these things in English to Mr Coulston; and she then refers to other things which she said she heard in the conversation, and recalls reference to one bedroom, two bedroom, and three bedroom apartments in the conversation and the fact that the word “studio” was not mentioned. That evidence is consistent with the evidence given by Mr Yan in cross-examination that there was no consideration of, or reference to, studio apartments at this time, although that evidence is not consistent with Mr Yan’s and Ms Wang’s affidavit evidence to the contrary.

Ms Chen was cross-examined at some length. I am inclined to think that she was trying to give honest evidence in difficult circumstances, where she has a close relationship with Mr Yan’s wife and her husband had a business relationship with Mr Coulston in respect of this transaction. Regrettably, I am also comfortably satisfied that her memory of events is unreliable, although this is understandable where she only agreed to give evidence in the course of the hearing, her evidence was prepared over a short period, and her attempt to recall events of over five years ago was unsuccessful.

There are several reasons why I reach this conclusion. First, Ms Chen fairly accepted in cross-examination that she did not seek to recall what was said at the meeting in early December 2016 until over 5 years after it took place, on or about the date of giving her affidavit on the afternoon of 30 August 2022. There was no reason that she should have had a particular recollection of what was said at that meeting, when the issues would not have been particularly controversial when the meeting took place and she had no direct personal interest in the detail of those matters, beyond the fact that she had introduced Mr Yan to Mr Overton and, through him, to Mr Coulston. It was also notable that Ms Chen had no particular recollection of anything that occurred immediately before or immediately after that meeting. Second, it was essential to Ms Chen’s account of that meeting that it included both a business discussion and a meal continuing over several hours, served by Mr Yan’s private chef while his restaurant was closed, and she unequivocally rejected the suggestion that meeting occurred at 9.30am on that date. However, it is plain from contemporaneous documents that the meeting did commence at that time and that suggests that Ms Chen has understandably confused the morning meeting on 7 December 2016, which she likely did not attend, with the dinner on 21 December 2016, which she plainly did attend.

Third, there are real inconsistencies in Ms Chen’s three accounts of what was said in that meeting, the first in her first affidavit dated 30 August 2022; a second in a third correcting affidavit dated 6 September 2022; and a third when asked to recall what was said in cross-examination, and her evidence as to how the change in her account between her first affidavit dated 30 August 2022 and her third affidavit dated 6 September 2022 arose was unclear. Her first account of the conversation, in paragraph 23 of her affidavit dated 30 August 2022, is that:

By the time of Ms Chen’s third affidavit dated 6 September 2022, she had amended the matters that she had clearly recalled in her first affidavit by amending part of what was said and including additional words, as follows:

Ms Chen appeared to suggest, in cross-examination (T475) that the error had arisen in her 30 August 2022 affidavit because she had told Mr Santisi and Mr Ngo on 30 August 2022 that Mr Yan said that he wanted “no more than” the specified number of apartments but Mr Ngo wrote “no less” in her affidavit, but that does not explain the omission of the reference to “one bedroom” or of the additional sentence included in her third affidavit, where she was recalling a conversation that had occurred more than five years ago that she had previously recounted only several days before. Ms Chen’s further version of that correspondence in cross-examination (T466-468) did not correspond to, or have the detail of, either of her versions in her affidavits dated 30 August 2022 and 6 September 2022.

Fourth, it seems to me that Ms Chen’s presence in Court during parts of the hearing is likely to have affected the reliability of her evidence, at least in the sense of focussing her attention on issues that have been squarely raised in the parties’ openings and Mr Yan’s evidence. Fifth, the reliability of Ms Chen’s evidence is undermined by the fact that she is plainly mistaken in her evidence that the meeting on 21 December 2016 was “casual”, by contrast with the 7 December 2016 meeting, since the meeting at the Golden Century Restaurant on 21 December 2016 involved discussion of significant terms of the Nomination Deed, as the contemporaneous file note prepared by AEN’s solicitors which I set out above demonstrates, and then a lengthy and apparently convivial dinner. That error is consistent with the possibility that she has confused the two occasions given the passage of time.

I am unable to place any significant weight on Ms Chen’s evidence, again without any criticism of her. In any event, little ultimately turns upon the accuracy of Ms Chen’s recollection of what was said at the dinner meeting in early December 2016, or which version of that recollection should be adopted. I find below, in dealing with AEN’s representational case, that any earlier discussions as to the delivery of a particular number of apartments of a particular size plainly ceased to have any continuing effect, given the clear recognition of 1VD’s ability to vary the apartment mix in response to statutory and Council requirements in the heavily negotiated provisions of the Nomination Deed.

I now turn to a wider issue as to the affidavit evidence. Mr Yan and Ms Wang made the same errors as to several matters in their first affidavits, and corrected them in the same way in their second affidavits, in respect of their incorrect reference in their first affidavits to Mr Coulston having attended the meeting at the Kogarah site in October 2016, and in the absence of reference in their first affidavits to the meeting at Mr Yan’s restaurant on 7 December 2016, at 1VD’s solicitors’ office on 8 December 2016 and at the Golden Century restaurant on 21 December 2016. Large parts of the lengthy affidavits of Mr Yan and Ms Wang were also identical, with only cosmetic changes between corresponding paragraphs.

Since AEN does not accept either the extent or the significance of the now admitted fact of the copying between Ms Wang’s affidavit and Mr Yan’s affidavit, or vice versa, I set out the corresponding passages (omitting some that are less material) in the table that occupies the next 45 or so pages of this judgment, adopted from Ex P4 and from Ms Wang’s affidavit (Ex P5, tendered with a limiting order under s 135 of the Evidence Act as proof of what was said and not proof of the truth of its content). I do so on the basis that this table and the extent of the copying between the two affidavits will demonstrate the nature and significance of this issue more clearly than any evaluative statement by me could do:

The difficulty that arises from the copying of parts of Mr Yan’s and Ms Wang’s affidavits is not limited to those affidavits. The affidavit dated 7 August 2020 of AEN’s solicitor, Mr Ngo, also contains passages, dealing with factual matters, that are identical to parts of Ms Wang’s and Mr Yan’s affidavits of the same date. Without seeking to be exhaustive, paragraphs 8-12 of Mr Ngo’s affidavit are wholly or partly copied from paragraphs 16-20 of Mr Yan’s affidavit or vice versa; part of paragraph 13 of Mr Ngo’s affidavit from paragraph 11 of Ms Wang’s affidavit or paragraph 23 of Mr Yan’s affidavit or vice versa; paragraph 14 of Mr Ngo’s affidavit from paragraph 25 of Mr Yan’s affidavit or vice versa; part of the quote in paragraph 45 of Mr Ngo’s affidavit from paragraph 269 of Ms Wang’s affidavit or paragraph 240 of Mr Yan’s affidavit or vice versa; paragraphs 47-50 of Mr Ngo’s affidavit from paragraphs 270-271 and 343-344 of Ms Wang’s affidavit or paragraphs 241-242 and 310-311 of Mr Yan’s affidavit or vice versa; paragraphs 52-60 of Mr Ngo’s affidavit from paragraphs 345-353 of Ms Wang’s affidavit or paragraphs 312-320 of Mr Yan’s affidavit or vice versa; paragraph 62 of Mr Ngo’s affidavit from paragraph 358 of Ms Wang’s affidavit or paragraph 325 of Mr Yan’s affidavit or vice versa; and paragraphs 71-73 of Mr Ngo’s affidavit from paragraphs 393-395 of Ms Wang’s affidavit or paragraphs 359-361 of Mr Yan’s affidavit or vice versa.

Mr Ngo, in cross-examination, gave varying accounts of the manner in which identical paragraphs were included in the affidavits of Mr Yan, Ms Wang and his own affidavit. Mr McInerney, with whom Mr Pokoney appears for 1VD, drew attention to Mr Ngo’s evidence in cross-examination as follows:

As Mr McInerney points out, Mr Ngo was then given the opportunity to identify those passages which he regards as containing the “representations”, in respect of which he “used that as the phrase that they would have used”. He initially identified only paragraphs 70 and 73 of Ms Wang’s affidavit as having the character of representational evidence (T347). I then allowed him further time to review the affidavits and identify any other paragraphs to which that characterisation applied and he gave the following evidence:

Mr Ngo then gave the following evidence:

He then indicated that he adopted Ms Wang’s evidence in preparing Mr Yan’s affidavit “insofar as it relates to instructions of the representations”, provided that Mr Yan gave instructions that were “in line” with what Ms Wang had said (T349-350). Mr Ngo was then unable to provide any satisfactory explanation as to why Mr Yan’s affidavit referred to conversations prohibiting the inclusion of studio apartments in the development, when Mr Ngo accepted that his instructions were that there had been no mention of studios at any time before August 2018 (T350), and, I should add, Mr Yan had readily accepted in cross-examination that there had been no such reference.

Mr Ngo was then cross-examined as to the schedule of identical or substantially identical evidence in Mr Yan’s and Ms Wang’s affidavits (Ex P4) and he accepted that it was “highly unlikely” that two witnesses would give evidence using identical or substantially the same words in two affidavits (T354) but then gave evidence that:

I do not accept that Mr Ngo’s evidence in cross-examination was a complete and truthful account of his approach, where it is inconceivable that Mr Yan in giving instructions in Mandarin through an interpreter, and Ms Wang, in giving instructions in English, would have given identical or substantially similar accounts of numerous representations which were then reflected in multiple identical paragraphs of the two affidavits. That account also provided no explanation of why paragraphs recording oral representations in Mr Ngo’s affidavit were also identical to paragraphs recording those representations in Mr Yan’s and Ms Wang’s affidavit, where it is even less credible that all three witnesses had identical recollections of the relevant representations, which could be fairly reflected by copying Ms Wang’s evidence into both Mr Yan’s and Mr Ngo’s affidavit. It is apparent that Mr Ngo copied many paragraphs of Ms Wang’s affidavit into Mr Yan’s affidavit, or vice versa, on occasion with the same misprints: for example, paragraph 350 of Mr Yan’s affidavit corresponds to paragraph 383 of Ms Wang’s affidavit, with the same misprint in the word “though” and paragraph 351 of Ms Wang’s affidavit corresponds to paragraph 385 of Mr Yan’s affidavit, with the same misprint in the word “amnened”. There are also many other non-representational paragraphs that are wholly or partly in the same form, and I raised a number of those paragraphs with Mr Ngo at the conclusion of his cross-examination.

At the risk of repetition, I do not accept that Mr Yan in Mandarin through an interpreter and Ms Wang in English had given the same or substantially the same instructions as to those many matters to Mr Ngo, where it is inconceivable that two witnesses giving independent evidence would have raised the same thoughts in the same order, particularly when giving evidence one in English and one in Mandarin through an interpreter, including giving the same inadmissible evidence of their understandings of matters and making submissions as to other matters in the same form. The only available inference from Mr Ngo’s evidence, if it were accepted, would be that Mr Yan and Ms Wang had colluded in giving their instructions to Mr Ngo concerning their affidavits, to the extent that he was told the same thing by each of them in respect of numerous matters, by Mr Yan in Mandarin through an interpreter and by Ms Wang in English, and then reflected the identity of the collusive instructions that he had been given by copying Ms Wang’s evidence into Mr Yan’s affidavit, and then extending that process to copying aspects of Ms Wang’s evidence or Mr Yan’s evidence into his own affidavit. Other possibilities, not accepted by Mr Yan in cross-examination, is that Mr Ngo prepared pro forma affidavits for the review of Ms Wang or Mr Yan or both, which they adopted without any real independent review, or he used a detailed template to ask questions of them which shaped their evidence to the extent that it was substantially identical, or took evidence from one witness and then prepared a draft affidavit which was provided to the other, from which he then copied aspects of his own evidence. Mr Ngo denied each of those propositions, and maintained that denial when I invited him to reflect on whether there were any aspects of his evidence that he wished to correct, given the potential consequences for an officer of the Court of a finding that his or her evidence could not be believed, extending across a substantial amount of evidence and a lengthy cross-examination.

Not surprisingly, Mr McInerney submits that:

AEN, represented by Mr Santisi and Mr Ngo, addressed these issues at some length in submissions. In the unusual circumstances of this case, I also advised the parties (and Mr Ngo, who was still acting as AEN’s solicitor) that I would likely grant leave for Mr Ngo to be separately represented at the point of closing submissions, in the manner permitted by the Court of Appeal in British American Tobacco Australia Services Ltd v Cowell (2002) 7 VR 524; [2002] VSCA 197 at [11], if he wished to seek such leave. Mr Ngo initially indicated, through Mr Santisi, that he wished to take up that opportunity and I adjourned the closing submissions which were to be made on 9 September 2022 to 13 September 2022 to allow him the opportunity to obtain such representation and prepare such submissions. When closing submissions then commenced on 13 September 2022, Mr Santisi indicated that Mr Ngo did not wish to take up the opportunity that had been afforded to him.

Nonetheless, Mr Santisi made detailed written submissions as to these matters under the striking heading:

Those submissions commence with the proposition that 1VD, by its Senior Counsel, “sought to make an issue” by cross-examining Mr Yan and then Mr Ngo and raised “very serious allegations” against them both. It seems to me that the issue which I have identified above was not in any sense “ma[d]e” by Mr McInerney but arose from the many identical or substantially identical paragraphs in Mr Yan’s and Ms Wang’s affidavits, the common errors in their first affidavits, their common corrections in their second affidavits, and the fact that some of the same or substantially the same paragraphs were also reproduced in Mr Ngo’s affidavits. That issue was, with respect, an issue that arose from AEN’s conduct of its case and cannot be attributed to Mr McInerney.

Mr Santisi refers to parts of Mr Yan’s cross-examination and I have regard to Mr Yan’s denial that he spoke together with Mr Ngo and Ms Wang about the evidence they would give in the case and his denial that he communicated with Mr Wang about his evidence and his claim that his evidence was “entirely based on my own memory, slowly, bit by bit” (T290-291, 292). Mr Santisi also referred to Mr Yan’s evidence in cross-examination that he had “wrongly” remembered that the meeting at the Kogarah property had been attended by Mr Coulston, and that he could not explain why Ms Wang had made the same error and suggested that “[m]aybe she had also remembered it wrongly”. I bear in mind that Mr Yan also denied the proposition that he and Ms Wang made that mistake and other mistakes in the same way because they had “spoken about the evidence” given in their affidavits (T295). Mr Santisi also referred to Mr Yan’s evidence concerning his (and Ms Wang’s) omission of a reference to the meeting at his restaurant on 7 December 2016 in his first affidavit (and Ms Wang’s corresponding omission) and his (and Ms Wang’s) reference to that meeting in their second affidavits, and to the submission put to Mr Yan, and denied by him, that he had acted dishonestly by discussing his evidence for the proceedings with Ms Wang, or by discussing the evidence that he and Ms Wang would give with Mr Ngo. Mr Yan initially did not squarely respond to the latter proposition, when put over several questions in cross-examination, but ultimately denied that he and Mr Ngo had worked together “to make sure [he] and Ms Wang were giving the same evidence”.

Mr Santisi in turn submits that any issues as to collaboration between the witnesses (which he puts in somewhat more extravagant terms) is “purely based on [the] comparison” to which I referred above. While that comparison, and the many identical passages in the affidavits which it reflects, raises that issue, it is ultimately to be determined by reference to the improbability that two witnesses would give identical evidence or identical instructions to Mr Ngo, involving identical errors, over a number of matters recalled from several years ago, when one was providing instructions in Mandarin through an interpreter and the other in English.

Mr Santisi submits that documentary evidence corroborates the account given by Mr Yan, and the account that would have been given by Ms Wang had she been available for cross-examination, and speculates that “[t]he fact they had access to the AEN business records may explain the similarity in the evidence”. Neither Mr Yan nor Mr Ngo gave evidence to that effect in cross-examination to explain the identical passages in their affidavits. Mr Santisi then refers to a number of documents which are likely relevant to 1VD’s substantive claims, but provide no explanation of the extent of the identical evidence in Mr Yan’s, Ms Wang’s or Mr Ngo’s affidavits. Mr Santisi also refers to Mr Ngo’s evidence as to steps he had taken to translate the relevant affidavits for witnesses, which he contends were directed to “preserve the integrity of the two witness accounts” and to Mr Ngo’s denial of the “allegations” against him. That evidence also provides no explanation of how identical evidence arose to this extent, absent collusion between the witnesses or copying of evidence by Mr Ngo, where three witnesses would not, in the ordinary course, have substantively identical recollections of the many matters as to which they gave identical evidence.

Mr Santisi submits, correctly, that the Court is “left with denials both from Mr Yan and Mr Ngo”, but that submission does not come to grips with the fact that I am also left without any credible explanation of how identical evidence on this scale could have arisen without collusion or copying of evidence which was not based on identical instructions. Mr Santisi in turn speculates that several matters which “could have” given rise to similarity in the evidence. He observes that Mr Yan experienced the same events as Ms Wang. Obviously enough, many witnesses who give evidence in this and other Courts have shared the experience that is the subject of the litigation; however, precise identity of their evidence is rare, because genuine recollection does not ordinarily give rise to identical evidence over lengthy affidavits. Mr Santisi also submits that “[t]here is no real way of expressing the same event, differently, hence the similarities in expression”. I do not accept that proposition, which is again falsified by experience, where witnesses who are giving independent evidence generally do not recall the same events in identical or substantially identical terms.

Mr Santisi also submits that:

Mr Santisi also asks, rhetorically:

Mr Santisi also draws attention to authority, which I accept, that the evidence of witnesses should be assessed by reference to contemporaneous documents, and I have adopted that approach here. He refers to the application of s 140 of the Evidence Act, to which I have had regard so far as issues of collusion or copying of one witness’ affidavit to other affidavits by Mr Ngo are plainly serious matters. Mr Santisi submits that evidence is to be preferred which is inherently probable in the circumstances or is given by a witness against their interest, and that evidence of independent witnesses may resolve conflicting evidence of interested parties, although neither proposition appears to advance AEN’s position here. He submits, and I accept, that the fact that a witness has been found to be lying about one thing does not automatically mean that they are to be disbelieved about everything else, and that the Court should be cautious about global credibility findings, and that disbelieving a witness’ evidence of a particular proposition does not mean that the opposite proposition has been proved. However, the fact that a witness has not given independent evidence of his or her own recollection about many things may plainly undermine his or her evidence, by making it impossible for the Court to know what evidence that witness would have given, had his or her evidence been given independently.

Mr Santisi in turn submits that:

Turning now to the case law, in Macquarie Developments Pty Limited and Anor v Forrester and Anor [2005] NSWSC 674 Palmer J considered the weight to be attributed to two affidavits dealing with significant matters in substantially identical terms, where a solicitor had “copied and pasted” portions from one affidavit to the other and observed (at [89]-[91) that:

I also addressed the difficulty which arises from the copying of affidavits, in a much less extreme case than this matter, in Colorado at [17]ff as follows:

In Dentown Pty Ltd v PWI Group Pty Ltd as trustee of The Australia No 1 Group Trust (2019) 141 ACSR 330; [2019] NSWSC 1032 at [15]–[19], Rees J observed that the contents of identical affidavits are devalued by reason of them being identical and a judge will approach the contents with caution. Her Honour added that oral evidence is likely to be more indicative of what actually happened than events described in their duplicated affidavits. In Plus One International Pty Ltd v Ching (No 3) [2020] NSWSC 1598 at [284], Hallen J took the same view.

In this case, the level of copying of evidence between the three affidavits of Mr Yan, Ms Wang and Mr Ngo is extreme by any standard, with the effect that each of Mr Yan and Ms Wang, and on occasion also Mr Ngo, recalled the same conversations in the same terms, reacted to the same correspondence in the same way, and thought the same thoughts which they expressed in the same terms, over lengthy affidavits. Those difficulties relate to all disputed conversations. I consider that these matters go beyond the position that Mr Yan’s and Mr Ngo’s affidavit evidence cannot be treated as reflecting a genuine individual recollection of events as distinct from a collective reconstruction of them, to the point that those affidavits can be given little or no weight as to contested matters. That question does not arise in respect of Ms Wang’s affidavit evidence, only because her affidavits could not be read where she was not available for cross-examination.

I also bear in mind the gravity of an adverse finding as to Mr Ngo’s credit for his reputation and for his practice as a solicitor, and that I should only reach that finding if I am satisfied of it to the standard in Briginshaw v Briginshaw (1938) 60 CLR 336 and s 140 of the Evidence Act. Nonetheless, and with regret, I am obliged to record that I do not believe Mr Ngo’s evidence as to the manner in which Mr Yan’s, Ms Wang’s and his affidavits were prepared, and in particular I do not believe his claim to have received the same instructions from Mr Yan (in Mandarin, through an interpreter) and Ms Wang (in English), and implicitly to have had the same recollection himself, before he copied passages of one affidavit to another in the many passages (which I addressed above) where identical affidavit evidence was given. I recognise that questions also arise as to whether Mr Ngo’s conduct of these proceedings may have been affected by a conflict of duty and interest, arising from a conflict between his duties to AEN in respect of the conduct of the proceedings and any personal interest in avoiding claims by AEN against him or his firm if the Nomination Deed did not achieve its commercial objectives, and as to whether Mr Ngo’s continuing to act for AEN in these proceedings, where he gave evidence material to the determination of contested issues, was likely to and did prejudice the administration of justice, for the purposes of r 27.2 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW). It is not necessary to decide those questions in order to decide the matter and I do not do so.

I should also note, for completeness, that Mr Santisi suggested in the course of his oral closing submissions (although his comment does not seem to be recorded in the transcript) that I was “smirking” when he submitted that the identical evidence of Mr Yan and Ms Wang was explained by the fact that Mr Yan and Ms Wang had given identical instructions (presumably, other than for the fact that the former was in Mandarin and the latter in English) to Mr Ngo, which were in turn identical with Mr Ngo’s recollection of relevant matters, possibly prompted by their review of AEN’s business records. While I cannot observe my own facial expression, I think it highly unlikely that I had such an expression, in its usual usage of smiling in a smug or condescending way. There is nothing about the matters to which I have referred above which then seemed to me to be cause for smiling, and the then apparent possibility that I might not be able to accept Mr Guo’s evidence was cause for concern not amusement where he is an officer of the Court. I may well have appeared disturbed or troubled by the submission, but that was not what Mr Santisi suggested.

I first set out the identified claims before turning to the relevant terms of the Nomination Deed and then to the parties’ submissions in that regard. 1VD contends that it has satisfied the requirements for payment of the Final Instalment of the Nomination Fee under the Nomination Deed. Its case is put simply in its Amended Commercial List Statement (“ACLS”), and the complexity of the issues in the proceedings arises not from that case but from AEN’s response to it. 1VD pleads (ACLS [3]) the terms of the Nomination Deed; it pleads (ACLS [15]) that the amended plans in the Final DA were prepared in accordance with the Apartment Design Guide, provided for 96 residential apartments and comprised a variation of the apartment mix authorised by cll 24.11 and 25.1 of the Nomination Deed; it pleads (ACLS [16]) that the approval of the Final DA was a Development Approval within the meaning of the Nomination Deed; and it identifies (ACLS [17]-[18]) AEN’s obligation to pay the specified amount under item 2(c) of the Schedule to the Nomination Deed, to which I refer below.

AEN contends (CLR [5]), in response, that on a proper construction of the Nomination Deed, before 1VD became entitled to the Final Instalment of the Nomination Fee, the Development Approval had to provide “as a minimum”:

AEN also seeks a declaration (ACS [4]) that the Nomination Deed contained a term, on its proper construction or had an implied term with the effect that:

In its Amended Commercial List Cross-Claim Statement, AEN also pleads (ACCS [5]) a complex (and not identical) term which it contends to be found in the Nomination Deed, presumably as a matter of construction or implication, as follows:

AEN in turn contends that the variation of the Development Application (as defined in the Nomination Deed) and drawings to provide for 38 studio and one bedroom apartments, with at least 17 apartments that were less than 50 square metres in internal area (excluding the balcony), and “pass[ing] off the 23 October 2018 approval as the Development Approval, was in breach of the Nomination Deed”. That turns upon the questions of construction of the Nomination Deed that I will address below.

It is important to have regard, first, to the basis on which AEN is entitled to be paid the Nomination Fee (as defined) under the Nomination Deed. Clause 2.1 of the Nomination Deed provided that AEN agreed to pay 1VD a “Nomination Fee” of $2,269,736 pursuant to cl 1.1 and item 2 of the Schedule to that Deed as consideration for the parties entering in to the Nomination Deed. The term “Nomination Fee” was defined as the “amount set out in item 2 of the Schedule and payable in accordance with cl 3.1 and any other monies payable under the Deed.” Clause 3.1 provided that:

By cl 24.1 of the Nomination Deed, the parties acknowledged and agreed that the release of the Final Instalment of the Nomination Fee in accordance with item 2(c) of the Schedule “is subject to [1VD] serving on [AEN’s] solicitor a copy of the Development Approval [as defined] on or before the DA Sunset Date, as may be varied by the parties by agreement in writing”. The term “Development Approval” is defined as the approval or determination of the Development Application (on such conditions as were reasonably imposed by Council) issued by Council, any relevant authority, or a Court of competent jurisdiction. The term “DA Sunset Date” is also defined in cl 1.1 of the Nomination Deed.

Clause 24.4 of the Nomination Deed in turn required 1VD, at its sole cost, to use its reasonable endeavours to prepare a Development Application (as defined) and obtain the Development Approval (as defined); serve a copy of the Development Approval on AEN’s solicitors within five business days of its receipt from Council; and keep AEN regularly advised as to developments with respect to it and consult with it on the Development Application and the Development Approval. The term “Development Application” is defined in cl 1.1 of the Nomination Deed, as the Development Application prepared by 1VD in accordance with cll 24 and 25 of the Nomination Deed, relating to the proposed redevelopment of the Properties (as defined). AEN did not plead (or identify material facts relating to) any claim that such reasonable endeavours were not taken, or such advice and consultation did not occur, although Mr Santisi sought to raise complaints as to that matter in submissions.

On release of the Final Instalment of the Nomination Fee to 1VD, AEN is also required to pay 1VD’s costs relating to the Development Application that lead to the Development Approval up to a limit of $200,000 plus GST pursuant to cll 24.7(a) and 24.8; and 1VD is then required to take certain steps in respect of the transfer, assignment or novation of its right, title and interest in the Development Approval (as defined) to AEN.

Clause 24.11 of the Nomination Deed in turn provides that:

This clause relevantly provides that the Development Application and Development Approval are to be prepared in accordance with the Apartment Design Guide (as defined) and sets out percentage requirements as to one, two and three bedroom apartments of specified areas, but does not address the position in respect of studio apartments, and also addresses the number of car parks, subject to statutory, authority and council requirements. The “Apartment Design Guide” was defined in cl 1.1 of the Nomination Deed as “the State Environmental Planning Policy No 65 – Design Quality of Residential Apartment Development, as varied from time to time”. I will address the scope of the permission to vary the apartment and car parking mix “pursuant to the requirements of the relevant statutory, authority and Council requirements” and the consequential limit of AEN’s right to rescind or terminate the Nomination Deed below. This clause also provided that the Development Approval may not contain more than 22 one bedroom apartments, and allows AEN to rescind the Nomination Deed and obtain an immediate refund of the Final Instalment of the Nomination Fee on doing so.

Clause 25.1 of the Nomination Deed in turn provides that:

Clause 25.2 of the Nomination Deed provides that:

Sub-clause (c) of item 2 in the Schedule to the Nomination Deed in turn provides for the release, refund or payment of the Final Instalment of the Nomination Fee, as follows:

Mr McInerney points out that the term “residential apartment” used in that provision is not defined in the Nomination Deed. He submits and I accept that the term “residential apartment” is given content by the documents incorporated into the Nomination Deed, that is, SEPP 65, and in turn, the Apartment Design Guide, and that term refers to any form of residential apartment, including studio apartments, one-bedroom apartments, two-bedroom apartments, and three-bedroom apartments. In closing oral submissions, Mr McInerney contended that AEN was obliged to pay the Final Instalment of the Nomination Fee under cl 2(c) of item 2 of the Schedule, irrespective of the other matters in issue. I accept that the requirements of cl 24.1 of the Nomination Deed were satisfied, because 1VD had in fact served on AEN’s solicitor a copy of the Development Approval (as defined, being the orders made in the LEC proceedings) on or before the DA Sunset Date (as defined). However, it is still necessary to have regard to the other provisions of the Nomination Deed, both to read the obligations in the Schedule in their context, and because the question whether a payment to 1VD or a refund to AEN was required turns on those obligations, and it is also necessary to have regard to the matters raised in AEN’s Cross-Claim so far as they seek to alter the operation of the Nomination Deed.

Turning now to Mr McInerney’s wider submissions as to the operation of the Nomination Deed. Mr McInerney submits in opening that the term “one bedroom apartment” in the Nomination Deed, in contradistinction to a “studio apartment”, “two bedroom apartment” or “three bedroom apartment”, is an apartment that contains one bedroom (which is a room for sleeping) separated from the kitchen and living space, and does not include a “studio apartment” which is in turn defined as one habitable room inclusive of the living, kitchen and sleeping space. I accept that submission as a matter of general English usage. I also accept Mr McInerney’s further submission that the Nomination Deed is to be construed by reference to its commercial context which includes SEPP 65, which is expressly incorporated by reference into cl 24.11 of the Deed, and the Apartment Design Guide, which distinguishes a “studio apartment”, defined as “an apartment consisting of one habitable room that combines kitchen, living and sleeping space” of minimum internal area of 35 sqm, from a “one bedroom apartment” of minimum internal area of 50 sqm, “two bedroom apartment” of minimum internal area of 70 sqm, and “three bedroom apartment” of minimum internal area of 90 sqm. Mr McInerney submits and I accept that a studio apartment is identified in the Apartment Design Guide as different and distinct from a one bedroom apartment and, properly construed, a reference in the Nomination Deed to a “one bedroom apartment” in cl 24.11 refers only to a one bedroom apartment, and not to a “studio apartment”. Indeed, it might be thought that the proposition is so obvious that a contrary reading of the clause was never reasonably available.

Mr McInerney also emphasises that the apartment and car parking mix specified in cl 24.11 of the Nomination Deed was qualified by the variation proviso to which I referred above, so that it was “subject to all statutory, authority and Council requirements”, and “may be varied pursuant to the requirements of the relevant statutory, authority and Council requirements (provided such statutory, authority and Council requirements are in writing)”; and, where that occurred, AEN was not “entitled to make any objection, requisition, claim, rescind or terminate this Deed as a result of or in relation to any matter or thing arising out of this clause, including but not limited to any variation of the apartment/car parking mix”. Mr McInerney fairly recognises that the variation proviso was itself limited – I interpolate, emphasising that extent to which this provision had been negotiated between the parties and their legal representatives – with effect that “[n]otwithstanding this Clause 24.11 and Clause 25.1, the parties acknowledge and agree that the Development Approval may not contain more than twenty-two (22) one bedroom apartments” and, in the event that the Development Approval did so, “the parties acknowledge and agree that the Nominee shall be entitled to rescind this Deed and obtain an immediate refund of the Final Instalment of the Nomination Fee”. Where I have found that the concept of a “one bedroom apartment” does not include a “studio” apartment, that requirement was not breached here.

Mr McInerney further addressed questions of construction of cl 24.11 of the Nomination Deed at some length in a supplementary written note provided in closing submissions. Mr McInerney submits, and I accept, that there are four parts to cl 24.11. He points out that the first part of that clause is contained in cl 24.11(a)-(d) (inclusive), commencing with the words “The Nominator warrants and agrees…” down to “(d) Not less than one hundred and thirty (130) car parking spaces in total.” Mr McInerney submits that the Development Application (as initially made) was prepared in accordance with the first clause in clause 24.11(a)-(d) (inclusive). He submits that the Development Approval (as distinct from the Development Application) also satisfied cl 24.11(a)-(d) (inclusive) because the Final DA, the subject of the s 34 Conciliation Conference and the orders made on 23 October 2018 by the Land and Environment Court, was the determination of the Development Application on “such terms as a reasonably imposed by Council”, issued by the Land and Environment Court. I will address that question below.

Mr McInerney then draws attention to the second part of that clause, forming a qualification to the first part, which commences with the words “however for the avoidance of any doubt, the parties acknowledge and agree…” down to the words “… the Nominee shall not be entitled to make any objection, requisition, claim, rescind or terminate this Deed as a result of or in relation to any matter or thing arising out of this clause, including but not limited to any variation of the apartment/car parking mix”. As I noted above, that qualification expressly states that the “apartment/car parking mix will at all times be subject to all statutory, authority, and Council requirements”. Mr McInerney submits and I accept that the words “will endeavour” in this qualification means “will reasonably endeavour” or “will use reasonable endeavours” and refers to the consideration of that phrase in Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; 306 ALR 25; [2014] HCA 7 (“Woodside”) at [41]-[43]. He submits and I accept that the obligation imposed by the words “will endeavour” was not absolute or unconditional, and was necessarily conditioned by what is reasonable in the circumstances, and did not require 1VD to disregard its own interests. In any event, AEN did not identify any claim that 1VD had not endeavoured, or reasonably endeavoured, to achieve the specified result, which it had pursued over a long period.

Mr McInerney also submits and I accept that the words, also in the second part of the clause, “[AEN] shall not be entitled to make any objection, requisition, claim, rescind or terminate this Deed as a result of or in relation to any matter or thing arising out this clause, including but not limited to any variation of the apartment/car parking mix” are analogous to cl 10.1 in the standard contract for the sale of land, although their effect is clear enough without that comparison. He also draws attention to case law relating to the treatment of multiple causes of events, in respect of the reference to “pursuant to” in this part of the clause, including City Centre Cold Store Pty Ltd v Preservatrice Skandia Insurance Ltd (1985) 3 NSWLR 739 at 743-745 and HIH Casualty & General Insurance Ltd v Waterwell Shipping Inc (1995) 43 NSWLR 601. I find little assistance in that case law, where this term must be construed in its contractual context. I return to the construction of this term below.

Mc McInerney points out that there is then an exception to the qualification in the second part of the clause, found in the third part of the clause commencing with the words “Notwithstanding this Clause 24.11 and Clause 25.1, the parties acknowledge and agree that the Development Approval may not contain more than twenty-two (22) one bedroom apartments…” down to the words “… the parties acknowledge and agree that the Nominee shall be entitled to rescind this Deed and obtain an immediate refund of the Final Instalment of the Nomination Fee”. Mr McInerney then notes the final part of cl 24.11, commencing with the words “The parties acknowledge and agree that the mechanism for the refund of the Final Instalment of the Nomination Fee pursuant to this clause is the only remedy…” down to the words at the end of the clause that read “…For the avoidance of any doubt the parties acknowledge and agree that the Nominator’s Solicitor is irrevocably directed and authorized to release the funds in accordance with this clause”.

Mr Santisi, for AEN, emphasised AEN’s and Mr Yan’s commercial intentions in respect of the development. Mr Santisi first submits that the Development Approval that was assigned by 1VD under the Nomination Deed is not the Development Approval as defined but “something totally different”, because it included studio apartments, and that no provision for studio apartments was made at cll 1.1, 24 and 25 and the Schedule of the Nomination Deed. However, as I noted above, 1VD’s entitlement to the Final Instalment of the Nomination Fee was determined under cl 24.11 and the Schedule to the Nomination Deed which did not specifically address the position in respect of studio apartments.

Mr Santisi also refers, in closing submissions, to a suggested breach of the Nomination Deed arising from a suggested failure to obtain AEN’s written approval for developments applications filed and any variations of them, but the material facts relevant to such an allegation were not identified in AEN’s Amended Commercial List Cross-Claim Statement and I should not address it further. Mr Santisi also submits that 1VD breached the Nomination Deed because any variation was not a consequence of writing by the Council, authority or statutory requirement, and submits that 1VD breached the Nomination Deed by varying the apartment mix. I have addressed the qualified character of 1VD’s obligations under cl 24.11 above, and noted the absence of an identified claim that it failed to use reasonable endeavours to achieve the specified apartment mix or car parking spaces, above. Mr Santisi also advances several other contentions that seems to me variations of those propositions, but also raise the questions whether the Development Approval included more than 22 one bedroom apartments, or there is an implied term of the Nomination Deed or a case for rectification or misleading or deceptive conduct is established. I address those issues below.

Mr Santisi also submits that prior negotiations and discussions, through an agent, could not be said to be merely introductory, presumably referring to Mr Yan’s meeting with Mr Overton at the development site in October 2016, which Mr Yan had wrongly claimed Mr Coulston had attended. I need not address this submission further, since AEN did not raise, or identify the material facts underpinning, any claim against 1VD arising from any agency relationship between 1VD and Mr Overton. Mr Santisi also submits that, by 7 December 2016, Mr Yan had at least two sets of drawings, one showing a childcare centre and providing for 88 apartments of one, two and three bedrooms, and another with no childcare centre that provided for 96 apartments of one, two and three bedrooms and “had the benefit of all the representations such drawings contained”. I will assume, without deciding, one or both sets of drawings had been provided to Mr Yan at that time. Those drawings conveyed no more than the existing plans for the development which may be able to proceed if (which had not yet occurred) the zoning of the property was changed to permit those plans to go forward and Council gave the necessary approvals. The later Nomination Deed plainly contemplated the making of later changes, including in the apartment mix and the number of parking spaces, and I have referred above to the manner in which such changes may affect the Final Instalment of the Nomination Fee.

Mr Santisi also submits that an earlier heads of agreement prepared by Mr Coulston and Mr Yan’s instructions to his solicitors, which I addressed above, show his concern with obtaining no fewer than 96 apartments including only “one, two and three bedroom apartments”. I accept that Mr Yan initially sought to obtain 96 apartments of that size, as did 1VD in its dealings with AEN, other potential counterparties and Council, and in heads of agreement which were drafted by 1VD for discussion with AEN and other potential counterparties. However, that outcome was plainly subject to contingencies including, obviously, whether the zoning of the property was changed to allow the development to proceed and Council’s consent to the development. I accept that the parties then contemplated the inclusion of one, two and three bedroom apartments and prepared documents on the basis that would occur. I do not accept that they had then agreed any exclusion of studio apartments or apartments of less than 50 square metres from the project, as distinct from not then expecting their inclusion in the project. Mr Santisi also submits that the “real agreement” was to preserve a gross floor area of 8,000 plus square metres. I do not accept that any different “real agreement” has been established to that documented by the Nomination Deed. I will return to that issue in dealing with AEN’s rectification claim below.

Mr Santisi also submits that Mr Yan said “he did not want any apartments less than 50 square metres in the mix” and submits that this by implication excluded studio apartments from the development. I do not accept that submission, given the evidentiary findings that I have reached above. I also do not accept Mr Santisi’s submission that that position is corroborated by contemporaneous documents, because documents that record no more than an assumption or expectation at a point in time that the project will comprise one, two and three bedroom apartments do not evidence an agreement that smaller apartments could not be included in the future, particularly if statutory or Council requirements changed.

Mr Santisi also submits that the “real intent and agreement” of the parties was not reflected in the Nomination Deed and AEN seeks to imply a term that studio apartments were excluded as a matter of construction. I have not accepted that Mr Yan had required the exclusion of apartments of less than 50 square metres as at December 2016 and there was no reference to studio apartments, or to their exclusion, at that time, although I again recognise that both 1VD and AEN then expected that one, two and three bedroom apartments would be included in the project. Mr Santisi also submits that the Court should proceed on the basis that the parties were dealing with each other on the understanding that “studios and one bedroom apartments were the same”. I do not accept that submission, where studio apartments and one bedroom apartments were different as a matter of ordinary usage, and plainly recognised as different in contemporaneous documents including the Apartment Design Guide, and the parties did not turn their minds to the position as to studio apartments as distinct from one bedroom apartments.

Mr Santisi further elaborated these submissions in a document headed “Defence Supplementary Submissions”. His first submission, directed to the first part of cl 24.11, was, in substance that the requirements of cl 24.1(a)-(d) of the Nomination Deed were not satisfied, unless the qualification to those requirements in the second part of that clause was available. That appears to be common ground. As to the second part of that clause, he submits that:

Mr Santisi submits that the words “Statutory or Relevant Statutory, Authority or Relevant Authority” [sic] in that clause are not defined and the Court is left to guess at their meaning and 1VD “should fail on this issue al[one]”. It seems to me that, as a matter of ordinary usage and on construction of the Nomination Deed, at least SEPP 65 and the Apartment Design Guide, the LEP and DCP, and any requirement of the Council or the Land and Environment Court fall within that concept. Mr Santisi also submits that those statutory instruments were not “pleaded” by 1VD. I recognise the role of pleadings in this List and their significance for procedural fairness. However, there can be and was no suggestion that AEN was caught by surprise by 1VD’s reliance on the primary statutory and regulatory requirements applicable to the project, particularly where it is represented in these proceedings by the same solicitor who represented it in the transaction and was party to contemporaneous communications as to the impact of those requirements.

Mr Santisi submits that the relevant requirement must exist at the time the change was “filed”, namely 5 September 2018, implicitly a reference to the date of lodgement of the Further Amended DA with Council, and that excludes reliance on the order later made by the Land and Environment Court. I need not address that submission, given the finding I reach on other grounds below. He relies on the decision in Perpetual Trustee Company Ltd v Meriton Property Management Pty Ltd [2004] NSWSC 1528, which I drew to Counsels’ attention and which I address below. He also submits that “[1VD] points to [Ex] P2, the planning instruments and supplementary documents in the second folder and in fact the whole LEC process to the date of order as the writing. That is clearly wrong and should [be] rejected.” I have addressed the content of those requirements above and will return to their significance below. He also refers to Mr Dickson’s and Mr Coulston’s evidence as to these matters, which I have addressed above, and focusses upon Mr Dickson’s acceptance that, unsurprisingly, none of the statutory requirements or Council had specifically required 17 studio apartments in the particular development, as distinct from imposing requirements of more general application as to the height and apartment mix in the project. He also sets out extracts from Mr Dickson’s cross-examination at length, and I have had regard to those extracts and that cross-examination as a whole. Mr Santisi also points to the fact that the solicitors acting for 1VD in the LEC proceedings and officers of the Council did not give evidence for 1VD, but it seems to me that such evidence was neither necessary not desirable where events emerge clearly from the documentary record, and would have merely increased the length and cost of an already unreasonably long and costly hearing. He also contrasts that position with the proposition that Mr Ngo has been “wrongly accused and in fact falsely accused”. I have addressed the issues as to Mr Ngo’s credit and the manner in which AEN’s affidavit evidence was prepared above.

Mr Santisi also identifies a question as to what the parties meant by “writing” in cl 24.11 of the Nomination Deed. There seem to me no difficulty in the construction of that term as a matter of general usage or in its contractual context, where the requirement for writing serves to avoid the risk of disputes as to whether Council had imposed oral requirements. SEPP 65 and the Apartment Design Guide, the LEP and DCP are plainly all in writing, and Mr Santisi’s submission that there is no written requirement to introduce studio apartments or reduce the number of other apartments is simply a reformulation of the submission that their requirements are, unsurprisingly, of general application. Mr Santisi also submits that:

I approach the question of construction of the Nomination Deed in accordance with well-established principles of contractual construction. Mr McInerney submits, uncontroversially, that an objective approach is required to determine the rights and liabilities of a party to a commercial contract, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose; and that the meaning to be given to its terms is determined by reference to what a reasonable businessperson would have understood those terms to mean, having all the background knowledge that would be reasonably available to the contracting parties at the time of the contract, and this requires consideration of the language used in the contract, the surrounding circumstances known to the parties, and the commercial purposes or objects sought to be secured by the contract: Woodside at [35]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [46]; Price v Spoor (2021) 270 CLR 450; 391 ALR 532; [2021] HCA 20 at [27] and [42], where the High Court observed that an objective approach is applied in determining the rights and liabilities of a party to a commercial contract, by reference to its text, context and purpose, and “[t]he meaning to be given to its terms is determined by reference to what a reasonable business person would have understood those terms to mean.”

For the reasons I have set out above in dealing with the parties’ submissions, it seems to me there is no textual support in the Nomination Deed for the term for which AEN contends as a matter of construction, that the Development Approval had to provide “as a minimum” for “no more than 22 apartments that in combination were 1 bedroom apartments and/or 1 sleeping facility apartments and that had no apartment with less than 50 square metres of internal area excluding balcony area; and/or [sic] that did not provide for studio apartments and if it did they would be viewed as a one bedroom apartment and not otherwise as no apartment was to be of less than 50 square metres of internal area.” That clause is inconsistent with the distinction between a one bedroom apartment and a studio apartment to which I have referred above, as a matter of general usage, under the Apartment Design Guide and under the Nomination Deed.

However, it is still necessary to determine whether 1VD has satisfied the requirements of cl 24.11 of the Nomination Deed so as to preserve its entitlement to payment of the Final Instalment of the Nomination Fee under the Schedule, despite the change in the apartment mix and, to the extent the issue is properly raised, the number of car parking spaces. Mr McInerney submits, first, that the Final DA made in the LEC proceedings on 23 October 2018 was a determination by the Court in writing, having regard to the statutory requirements imposed by the town planning instruments found in the SEPP 65, the Apartment Design Guide, the LEP and the DCP, which was treated under the Nomination Deed as a determination by “Council” (as defined in cl 1.1 of the Deed to include the Court) of the Development Approval (as defined term in cl 1.1 the Deed also to include development approval by the Court) and that it varied the apartment and car parking mix stated in cl 24.11 of the Deed, “pursuant to the requirements of the relevant statutory, authority and Council requirements (provided such statutory, authority and Council requirements are in writing)”, so as to fall within the variation proviso in cl 24.11 of the Nomination Deed. Alternatively, Mr McInerney submits that cl 24.11 was satisfied so far as the change in the apartment mix was necessitated by statutory or Council height and apartment mix requirements. Mr Santisi contests that proposition on the basis that the height requirement could have been satisfied by fewer and larger apartments and, as I noted above, neither the apartment mix requirement nor Council specifically required the inclusion of 17 studio apartments in the project.

Mr Santisi responds that it is “common ground” that there is no writing from Council and no authority or statutory requirement that “expressly call[s] for the introduction of 17 studio apartments”. That proposition is correct in the limited sense that Council did not specifically identify a requirement for the inclusion of 17, rather than 16, 18 or 19 studio apartments, and incorrect so far as the DCP contemplated an apartment mix that would include studio apartments in an appropriate case. Mr Santisi in turn submits that the “only issue(s)” raised by Council was the “height violation” and the street setback in respect of the proposed development. I do not accept that submission, which is plainly inconsistent with the range of issues raised in the documents filed by Council in the LEC proceedings, to which I have referred above. Mr Santisi submits that 1VD made a choice to include 17 studio apartments, preserve 19 one bedroom apartments, and reduce the number of (or, in Mr Santisi’s term, “sacrifice”) two bedroom and three bedroom apartments and 18 car parking spaces in order to obtain Council approval. He submits that that reflected 1VD’s choice of the best option under the Nomination Deed to “benefit and avoid penalty” and to “avoid the Sunset Date”. Mr Santisi also points to the possibility that 1VD might have sought a voluntary development agreement with Council; it is not necessary to address that possibility further, where the material facts of that possibility were not identified in AEN’s Commercial List Response and it is not a matter raised for the Court’s determination.

In dealing with this issue, I am substantially assisted by the reasoning of Brereton J (as his Honour then was) in Birchill v Premier Holdings Pty Ltd [2011] NSWSC 1020 (“Birchill”), to which I drew Counsels’ attention. His Honour was there dealing with the question whether a sale occurred “pursuant to this deed”, as I am dealing here with whether a variation occurred pursuant to a statutory or council requirement. His Honour observed (at [35]-[37]) that:

Adopting an objective approach to cl 24.11 of the Nomination Deed, by reference to its text, context and purpose, and having regard to what a reasonable business person would have understood the terms of the clause to mean, and having all the background knowledge that would be reasonably available to 1VD and AEN at the time of the contract, it seems to me that the clause and the phrase “pursuant to” in that clause must be construed as requiring at least some connection, of a reasonably direct character, between the relevant statutory or council requirement and the variation to be made to the apartment mix as a result of that requirement. A reasonable business person would recognise that, if the variation proviso was interpreted as permitting any variation that 1VD sought to make, once a statutory or Council requirement existed, then it would deprive the apartment mix requirement in cl 24.11 of the Nomination Deed of any real content and would expose AEN to the risk that many changes, including changes that were highly adverse to it, could be justified as consistent with or promoting one of the widely phrased objectives in, for example, the DCP. However, a reasonable business person would also recognise that the variation proviso was directed to protecting variations that had a reasonably direct connection with Council or statutory requirements, including as to the height of and apartment mix in the development.

On balance, although with some hesitation, I am not satisfied that the variation proviso in the second part of cl 24.11 of the Nomination Deed is satisfied on the former basis put by Mr McInerney, by reference to the Land and Environment Court’s orders, so as to prevent AEN declining to pay the Final Instalment of the Nomination Fee on the basis that the apartment mix provisions were not satisfied and claiming the return of that fee, although that clause would prevent its rescission of the Nomination Deed on that basis. It seems to me that, because the variation of the apartment mix and the introduction of studio apartments preceded any relevant requirement under those orders, where it was negotiated between the parties before those orders were made, it was not made “pursuant to” those orders.

However, also with real hesitation, it seems to me that a sufficiently direct relationship does here exist between at least the height requirement and possibly also the apartment mix requirement to satisfy the variation proviso in cl 24.11. I recognise that the change then made in the apartment mix, including the introduction of studio apartments, was one of several alternative means of complying with the height requirement in respect of the development, and addressing Council’s insistence upon compliance with that requirement in the LEC proceedings. It is common ground between the parties that, and indeed Mr Santisi cross-examined Mr Dickson on the basis that, the reduction in the height of the building required that either the number of apartments contained in the building be reduced or the size of the apartments be reduced and the layout changed if the number of apartments was not reduced. I also accept Mr Dickson’s evidence that the steps which were taken to introduce studio apartments into the development were received favourably by Council on the basis that they promoted the apartment mix requirement. I also recognise that, as Mr Santisi pointed out, the objective in respect of apartment mix in the DCP is one of several matters to be taken into account, and did not, in terms, mandate the inclusion of studio apartments if Council considered there were good reasons not to insist upon it or mandate the inclusion of a particular number of studio apartments.

It also seems to me likely that 1VD, in choosing whether to maintain the number of apartments and include several studio apartments in order to comply with the height requirement, and at the same time improve the development’s compliance with the requirements as to apartment mix in the DCP, or instead to reduce the number of apartments to retain larger apartments and risk Council’s continued opposition to the development because it did not meet the apartment mix objective, preferred its own interest in obtaining a prompt consent result in the LEC proceedings so as to avoid the expiry of the DA Sunset Date under the Nomination Deed, and satisfy the requirement for the number of apartments in the Nomination Deed to avoid the loss of the Final Instalment of the Nomination Fee. There can be no suggestion that it was not free to do so at general law, where it was not in a fiduciary relationship with AEN, it had not undertaken to prefer AEN’s commercial interests to its own, and there was nothing in the Nomination Deed that required it to advance AEN’s interest in having the opportunity to terminate that Deed, because Development Application was not approved before the DA Sunset Date, or in avoiding payment of the Final Instalment of the Nomination Fee, to its own contrary commercial interest in receiving that Final Instalment.

It seems to me that the fact that other alternative courses were available to 1VD in response to the height requirement and the apartment mix requirement, including reducing the number of apartments so as to include fewer studio apartments and more one, two or three bedroom apartments, possibly to the economic advantage of AEN and certainly to 1VD’s disadvantage in respect of its entitlement to the Final Instalment of the Nomination Fee, does not displace the fact that the choice which was made had a sufficient connection with the height requirement which prevented the building proceeding in its previous form and with the apartment mix requirement that was promoted by that choice. On that basis, the choice to take the option that advantaged 1VD rather than AEN, rather than a contrary choice which advantaged AEN and disadvantaged 1VD, in that situation was nonetheless “pursuant to” that statutory and Council requirement as to the height of the building or the apartment mix. That choice was one of the choices available to address that issue, although other choices would also have done so and would also have been “pursuant to” that requirement.

I reach that conclusion as a matter of construction of cl 24.11 of the Nomination Deed in the relevant commercial context, and having regard to the approach taken in Birchill. I recognise that it is arguably not consistent with the construction given to a clause that used different language in Perpetual Trustee Company Ltd v Meriton Property Management Pty Ltd above, which I had drawn to Counsels’ attention and on which Mr Santisi relies. The clause in issue in that case prevented, inter alia, a rescission or termination of a contract “because of” a minor variation “arising from” the requirement of a consent authority or Land and Property Information New South Wales. Bergin J (as her Honour then was) there observed (at [100]) that:

Mr McInerney submits that, whether or not Bergin J was correct in expressing the opinion that, in the context of the words “arising from a requirement of Council”, “it would have to be a necessary consequence of the requirement and not merely one that the party benefiting from such variation would prefer to have in place”, that conclusion is of limited utility, because it is confined to the proper interpretation of the phrase in question, in the specific circumstances of the contract in issue in that case, and “says nothing whatsoever about whether a differently worded clause, such as the qualification clause 24.11, should be construed in the same way”. It seems to me that Bergin J’s approach in Perpetual Trustee Company Ltd v Meriton Property Management Pty Ltd should be distinguished where it deals with different language, and I should give greater weight to the approach in Birchill which deals with the same concept in a commercial context. The approach that I have taken, although with hesitation, also seems to me to be consistent with the principles of construction to which I have referred above.

I accept Mr McInerney’s submission that the Final DA granted on 23 October 2018 by the Land and Environment Court contained 21 one bedroom apartments (which are distinct from studio apartments as I have held above) and did not contain more than 22 one bedroom apartments for the purposes of the limitation to the variation proviso in cl 24.11 of the Nomination Deed. I therefore do not accept AEN’s alternative contention that it was entitled to rescind the Nomination Deed on the basis that the Development Approval contained more than 22 one bedroom apartments for the purposes of cl 24.11, because that was not the fact.

Where I have reached this conclusion, and subject to the implied term for which AEN contends and the other matters raised in AEN’s Amended Commercial List Cross-Claim Statement, I accept Mr McInerney’s submission that the Final Instalment of the Nomination Fee of $1,419,736 was payable under cl 24.1 and item 2(c) of the Schedule to the Nomination Deed, where there were 96 residential apartments (including studio apartments) within the Development Approval, “subject to [1VD] serving on the [AEN’s] Solicitor a copy of the Development Approval on or before the DA Sunset Date”. The “DA Sunset Date” was in turn defined in cl 1.1 as, in effect, 18 months after Council, the NSW Department of Planning, or the Greater Sydney Commission, had gazetted the LEP approving a floor space ratio of 4:1, which occurred on 26 May 2017, and the DA Sunset Date was therefore 26 November 2018. That requirement is satisfied since, on 25 October 2018, 1VD notified AEN that the Court had granted approval to the Final DA on 23 October 2018, and attached a copy of the Final Development Approval comprised of the Notice of Orders made by the Land and Environment Court and also attached a zip file with copies of the tax invoices incurred by AEN in respect of the development application which, on their face, were in excess of $200,000 plus GST.

I also accept Mr McInerney’s submission that, under cll 24.7-24.8 of the Nomination Deed, on release of the Final Instalment of the Nomination Fee, AEN was required to reimburse 1VD all reasonable consultant costs and other costs, evidenced by way of valid tax invoices, incurred by AEN for the preparation of the Development Application documentation and any lodgement fees, etc, with such fees to be capped at $200,000 plus GST. The tax invoices as to costs in respect of the Development Application record, on their face, apparently reasonable costs totalling at least $200,000 plus GST. In closing submissions, Mr Santisi submits, by no more than bare assertion, that 1VD’s claim for $200,000 by way of costs is not made out, because the costs do not meet the definition in cl 24.7 of the Nomination Deed. In his Defence Supplementary Submissions, he takes that proposition no further, submitting only that:

1VD therefore succeeds on its primary claim, subject to the implied term for which AEN contends and the several other matters raised in AEN’s Amended Commercial List Cross-Claim Statement.

In determining whether the term for which AEN contends can alternatively be implied, I have regard to the well-known conditions for implication of a term, stated in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282–283; 52 ALJR 20, which require that the term must be reasonable and equitable; the term must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it; the term must be so obvious that “it goes without saying”; the term must be capable of clear expression; and the term must not contradict any express term of the contract. I also have regard to the observations of Mason J in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337; [1982] HCA 24 (“Codelfa”), Mason J observed that, to justify the importation of an implied term it is ‘“not sufficient that it would be reasonable to imply the term. … It must be clearly necessary”. His Honour also observed (at 346) that:

In Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 at 241; [1986] HCA 14 , the High Court held that a contract there under consideration was “capable of sensible operation in the absence of… implied terms” and that “the appellant’s submission amount[ed] to little more than an assertion that the terms are necessary to make the contract work in a manner that will avoid additional liability of the assured”.

Those observations were recently applied by the Court of Appeal in Hobhouse v Macarthur-Onslow [2022] NSWCA 158 (“Hobhouse”), where Macfarlan JA drew (at [20], with whom Ward P and White JA agreed) particular attention to the observation of Mason J in Codelfa:

Macfarlan JA also there noted that an implied term should not be found in that case where it was only necessary to make the contract work in a manner that enhanced one party’s opportunity to exercise an option. His Honour also pointed (at [28]) to examples of inconsistency between express and implied terms, including Besier v Foster (1952) 94 CLR 526 at 530; [1952] HCA 14 where it was held that the proposed implication “disregards what the words say and attempts to introduce into them a change of actual meaning”; Sanders v Snell (1998) 196 CLR 329; [1998] HCA 64 at [16] where it was held that to imply a term into an employment contract which expanded the circumstances in which the employer could make payment of salary to the employee in lieu of notice of an intention to terminate the employment “would fly in the face of the express provisions in the agreement”; and Ikin v Danish Club “Dannebrog” Inc [2001] VSCA 123 at [17] where an attempt at implication failed because its effect would have been to add into a written contract of employment an additional ground for dismissal beyond those stated in the contract.

It seems to me that the relevant provisions in the Nomination Deed were not unworkable such that it was necessary to imply a term to give them business efficacy although, as events developed, they did not restrict the inclusion of studio apartments in a manner that may have advanced AEN’s commercial interests in some circumstances, or possibly frustrated them if the development could not proceed without including such apartments. It cannot be said that the need to imply a term to prevent studio apartments would have been regarded by a reasonable bystander as so obvious that “it goes without saying”, and a reasonable bystander might well have consider that it would be desirable to permit the inclusion of such apartments if the development would not otherwise be approved. The pleaded expression of the term is not clearly expressed but convoluted and obscure. It also contradicts the express terms of the Nomination Deed, so far as it would constrain the express permission to amend the apartment mix to address regulatory requirements, which plainly could require the inclusions of studio apartments within the development. Finally, as in Codelfa and Hobhouse, the Nomination Deed is a “detailed and comprehensive” contract, in which such a term would not readily be applied. For these reasons, the pleaded term cannot be implied.

I have addressed the construction and implied term claims raised by AEN in its Amended Commercial List Cross-Claim Statement above. I now turn to the other matters raised in AEN’s Cross-Claim.

By its Amended Cross-Summons, AEN seeks an order for rectification of cl 24.11(a) of the Nomination Deed by adding the words, “such that no apartment is to be less than 50 metres square in internal area excluding the balcony area in the mix” following the words, “as described in Clause 24.11(a)”. AEN also contends (ACCS [13]-[14]) that:

It is uncertain whether this pleading is limited to AEN’s claim for rectification or whether AEN also here pursues a claim that there existed a collateral contract with 1VD. Mr Santisi did not address the latter claim and it may be that it was not made, or is not pressed, although Mr McInerney responded to it in closing submissions. If that claim is pressed, I do not accept it for the reasons put by Mr McInerney, including that the asserted agreement would be directly inconsistent with the express terms of the Nomination Deed, and would not satisfy the requirement that a collateral contract be consistent with and not contradict or conflict with the terms of the main agreement: Hoyt’s Pty Ltd v Spencer (1919) 27 CLR 133 at 147; Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507 at 517; Esanda Ltd v Burgess [1984] 2 NSWLR 139 at 145-146, 152.

Mr Santisi addressed the factual basis of the rectification claim, which was pressed, although he did not address the applicable legal principles. It is sufficient for present purposes to set out Rees J’s helpful summary of those principles in Property Investors Alliance Pty Ltd v C88 Project Pty Ltd (in liq) [2022] NSWSC 1081 at [72]ff as follows:

Mr McInerney rightly points out that AEN’s cross-claim identifies no material facts to support a rectification claim in equity whether for unilateral mistake or common mistake. This is not merely a pleading point, where it would be a denial of procedural fairness for a claim for rectification to be established by reference to findings of fact which 1VD has not had the opportunity to meet. It appears from Mr Santisi’s submissions that claim is based on the proposition that the “real agreement” of the parties, to which Mr Santisi referred, was that no apartment in the development was to be less than 50 metres square in internal area excluding the balcony, implicitly even if Council would not approve the apartment without the inclusion of smaller or studio apartments. I have not accepted that that agreement has been established. This claim cannot succeed, both because the material facts on which it relies have not otherwise been identified and because the findings I have reached above do not support it.

By its Amended Cross-Summons, AEN also seeks further declarations, including declarations in respect of a claim for misleading and deceptive conduct and/or unconscionable conduct under the Australian Consumer Law.

I should briefly refer to the applicable principles in respect of misleading and deceptive conduct and unconscionability. I outlined the applicable principles in a claim for misleading and deceptive conduct in Changizi v Rizaie [2021] NSWSC 613 at [93]–[94] as follows:

In Atlas at [211], I accepted Counsel’s summary of the matters relevant to whether misleading and deceptive conduct is established as follows:

A claim under s 20 of the Australian Consumer Law is directed conduct that is unconscionable within the meaning of the unwritten law of the states and territories. That section will at least be contravened by conduct within the four classes of cases identified by French J at first instance in Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2000) 96 FCR 491; 169 ALR 324 at 331; [2000] FCA 2, namely, exploitation of vulnerability or weakness; the abuse of a position of trust or confidence; insistence upon rights in circumstances which make that hard or oppressive; or inequitable denial of legal obligations. The wider scope of claims for statutory unconscionability has been recognised in cases including Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1; (2019) 368 ALR 1; [2019] HCA 18 and Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd (2021) 388 ALR 577; (2021) 151 ACSR 98; [2021] FCAFC 40.

AEN’s puts its misleading and deceptive conduct and unconscionability claims in its Amended Commercial List Cross-Claim Statement as follows:

In addressing these claims, I bear in mind that an Amended Commercial List Cross-Claim Statement is not, strictly, a pleading: Icon Co (NSW) Pty Ltd v Owners - Strata Plan No 97315 [2022] NSWCA 114 at [12]. However, the Amended Commercial List Cross-Claim Statement performs the same functions as a pleading in allowing procedural fairness to the cross-defendant and identifying the issues to be decided by the Court: Gunns Ltd v Marr [2005] VSC 251 at [57]; Young v Holmes [2013] NSWSC 580 at [82]; Re Graziers Pastoral Pty Ltd; Re Windsor Livestock Holdings Pty Ltd; Re Windsor Livestock Pty Ltd [2021] NSWSC 1680 at [51].

I now turn to the material facts identified by AEN in respect of this claim. First, AEN contends that, between 26 April 2016 and 11 October 2016, the architects retained by 1VD prepared drawings in versions A to F which did not include any studio apartments, and versions D and F were provided to Mr Yan. There is no suggestion that there was any intention to include studio apartments in the development at this time, prior to the requirements introduced by the DCP, and these matters are outside the time period to which AEN’s representational claim is directed. Second, AEN contends that, in October 2016, Mr Yan undertook a site inspection with a Mr Overton who provided drawings that did not include studios; that Mr Yan expressly identified that he did not want any apartments less than 50 square meters and sought exclusion of a child care centre and the inclusion of larger apartments; that Mr Overton stated that was achievable and changes could be made; that the drawings did not provide for studio apartments but only for one, two and three bedroom apartments and that Mr Overton made a number of representations concerning the apartment mix, and studio apartments were not mentioned as being included. AEN also contends that, in December 2016, within the time period to which the representational claim is directed, meetings took place between representatives of 1VD and AEN which I have addressed above in dealing with the chronology of events and affidavit evidence. AEN contends that, at a meeting with Mr Coulston on 7 December 2016, Mr Yan communicated the same wishes as he had expressed to Mr Overton and the apartment mix was confirmed by Mr Coulston, and that Mr Coulston and Mr Overton issued emails after that meeting setting out proposed terms and making the version D and F drawings available for discussion. AEN also contends that the same representations were made at a meeting at the offices of 1VD’s solicitors on 8 December 2016, attended by Mr Yan, Ms Wang, Mr Ngo, Mr Overton, Mr Coulston and Mr Garling. I do not accept Mr Yan’s evidence of this meeting for the reasons noted above.

Mr McInerney responds that, in AEN’s evidence in chief, Mr Yan initially identified two relevant meetings , namely a meeting on the development site at Kogarah attended by Mr Overton, Mr Coulston and Ms Wang (but not Mr Ngo) and a meeting in the Sydney central business district attended by Mr Overton, Mr Coulston and Ms Wang (but not Mr Ngo) where Mr Coulston made the alleged representations. Mr Ngo’s evidence was initially that he had not attended any meeting with Mr Yan and Ms Wang in respect of the development before 22 December 2016. Mr McInerney also points out that, in reply, Mr Yan acknowledges that the meeting on site at Kogarah in October 2016 was attended only by Mr Yan, Ms Wang and Mr Overton (although, I interpolate, it appears that Ms Chen was also present), and Mr Coulston was not present at that meeting; there was a meeting at Mr Yan’s restaurant in George Street on 7 December 2016 attended by Ms Wang, Mr Ngo, Mr Overton and Mr Coulston, where Ms Wang translated certain representations made by Mr Coulston to Mr Yan; and there was a meeting at 1VD’s solicitors’ office on 8 December 2018 attended by Mr Overton, Mr Coulston, Ms Wang, and Mr Ngo, where Ms Wang translated the representations made by Mr Coulston to Mr Yan. In reply, Mr Ngo changed his evidence to indicate that he was present at the meeting at 1VD’s solicitors on 8 December 2016. I have addressed Mr Yan’s and Mr Ngo’s evidence and their cross-examination above. Mr McInerney submits that the evidence of Mr Yan and Ms Ngo as to their respective recollections about the two meetings in early December 2016 is unreliable and should not be given any weight.

The October 2016 meeting is outside the time period to which the representational claims is directed, Mr Yan has now accepted that Mr Coulston did not attend it, and no claim is advanced in respect of Mr Overton. I have reached findings in respect of the December 2016 meetings above. The terms of the Nomination Deed were in any event inconsistent with any obligation to exclude studio apartments or apartments of less than 50 square metres, particularly if they were required in order to meet height restrictions and satisfy apartment mix requirements under the DCP as noted above.

The representations pleaded in paragraph 15 of the Amended Commercial List Cross-Claim Statement, as set out above, are alleged to have been made between 7 and 22 December 2016, and I have referred above to the meetings and circulation of draft documents which took place prior to the execution of the Nomination Deed on 22 December 2016. The content of the representations is identified in that paragraph as, first, a positive representation in the text italicised in paragraph 191 above and, second, an absence of disclosure, namely that 1VD did not disclose that “it would seek to make use of the Apartment Design Guide to try and classify studio apartments as anything other than a one bedroom apartment or other than a one sleeping facility”. Even putting aside the fact that I cannot place reliance on Mr Yan’s evidence for the reasons noted above, I am satisfied that a representation of that complex character cannot be found in the conversations and exchange of documents prior to 22 December 2016. It is apparent that, not surprisingly, 1VD recognised that its ability to deliver an apartment mix depended on statutory and council requirements and the exchange of draft agreements made absolutely clear that it would not and did not commit to delivering any such mix irrespective of such requirements, still less did it represent the Final Instalment of the Nomination Fee would be repaid to AEN if that did not occur. The premise of AEN’s non-disclosure case is not established, since the Apartment Design Guide itself treated studio apartments and one bedroom apartments as different, as one might expect as a matter of general usage, and irrespective of any conduct of 1VD, and it has not been established that 1VD has sought to use that Guide for the impugned purpose.

The allegation in paragraph 16 of the Amended Commercial List Cross-Claim Statement is not established where the alleged representations are not established. The allegations in paragraph 17 and 18 of the Amended Commercial List Cross-Claim Statement are not established, since no intention not to comply with the alleged representations is established where they are not shown to have been made, and there is no basis to find that 1VD has used the Apartment Design Guide in the manner alleged in paragraph 17, or done anything other than to treat that document as part of the applicable regulatory regime, as it is.

The contraventions alleged in paragraph 19 of the Amended Commercial List Cross-Claim Statement relate to misleading and deceptive conduct (s 18), unconscionable conduct within the meaning of the 'unwritten law' (s 20), the making of false or misleading representations about goods or services (ss 29 and 151) and false or misleading representations in respect of the sale of land (ss 30 and 152). Mr Santisi addresses the claim in unconscionability briefly in his “Defence Supplementary Submissions” as follows:

The contraventions alleged in paragraph 19 of the Amended Commercial List Cross-Claim Statement are not established, where the factual premises of the allegation are not established. Where the Nomination Deed was negotiated between commercial parties, represented by legal practitioners who exchanged several drafts and did not seek to exclude studio apartments from the number of “residential apartments” for the purposes of the calculation of the Nomination Fee in the Schedule, there is nothing unconscionable in permitting its operation in accordance with its terms. It is not necessary to address AEN’s claim for damages in paragraph 20 of the Amended Commercial List Cross-Claim Statement where neither its factual premises nor the alleged contraventions are established.

In paragraphs 21-25 of the Amended Commercial List Cross-Claim Statement, AEN then pleads as follows:

Paragraph 21 of the Amended Commercial List Cross-Claim Statement does not identify the content of any such representation, or when it was made, or by whom it was made for 1VD, or to whom it was made for AEN, other than by identifying a general subject matter (the type of development application, the apartment mix and apartment number) and, importantly, does not identify any material fact that any representation was made that a particular apartment mix or number of apartments could be achieved. It is at least clear that those representations are alleged to have been made prior to entry into the Nomination Deed, and I have noted above that the prior exchange of draft agreements made clear that AEN would not and did not commit to delivering the apartment mix or number of apartments initially sought by 1VD irrespective of relevant statutory and council requirements.

Paragraph 22 of the Amended Commercial List Cross-Claim Statement does not identify the basis on which the unidentified apartment mix could not be achieved, or who for AEN is alleged to have that knowledge, or any material facts that had the consequence that the unidentified apartment mix could not in fact be achieved. To the extent that any “promise” was made as to that matter in the Nomination Deed, it was qualified in the manner noted above. Paragraph 23 raises a suggestion the unidentified representations and unidentified inducement were as to future matters, but that cannot be assessed where their content is not disclosed. Paragraph 24 does not identify any material facts to support its premise that the unidentified representations and inducements (now in the plural) were false, deceptive or misleading, still less that 1VD had knowledge of such a matter. The allegation in paragraph 25 is not established, because its factual premises are not identified, still less established.

AEN’s claims for misleading and deceptive conduct and unconscionability and its allegations of statutory contraventions are therefore not established

AEN seeks several declarations in its Amended Cross-Claim Cross-Summons. In addressing these claims, I bear in mind that the Court should not generally make a declaration, even if it has jurisdiction to do so, unless it is satisfied both that the declaration sought is appropriate and that it has sufficient practical utility or where it would merely be prefatory to other relief: Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286; [1974] HCA 18; Attorney-General (NSW); Ex rel Corporate Affairs v Australian Softwood Forests Pty Ltd [1979] 2 NSWLR 73 at 76 per Hutley JA (with whom Reynolds and Samuels JJA agreed); PW Young, C Croft and ML Smith, On Equity (Lawbook Co, 2009) at 1084.

First, AEN seeks, in paragraph 1 of the relief sought in the Amended Cross-Claim Cross-Summons, a declaration that AEN is entitled to specific performance of the Nomination Deed as varied on 29 March 2017 and 24 April 2017 “namely clause 24.2 and 24.11 and the Schedule as such did not merge or stop to be enforceable on rescission for breach”. I put aside the fact there is no evidence that the Nomination Deed was varied in the manner assumed by the declaration sought. I cannot make that declaration where it is directed to a hypothetical situation, since AEN has not established a basis to terminate or rescind the Nomination Deed.

Second, AEN seeks a declaration that it is entitled to rescind the Nomination Deed on 6 November 2018 and seeks a release and refund of the Final Instalment of the Nomination Fee. That declaration cannot be made given the findings that I have reached above, and the restrictions on AEN’s right to rescind under cl 24.11 of the Nomination Deed, which I addressed above. In any event, this declaration would not have been necessary, so far as the relevant issues have been determined by this judgment and it would be merely anterior to any relief ordered.

Third, AEN seeks a declaration that 1VD was not entitled to raise tax invoices and seek and demand payment of the Final Instalment amount in a specified sum, as it and Mr Coulston had breached the Nomination Deed and failed to perform their obligations under the Nomination Deed by the due date of 26 November 2018 and at all. That declaration cannot be made given the findings that I have reached above. In any event, it would not have been necessary to make that declaration, where the issues are sufficiently determined by this judgment, and that declaration could not be made in the form sought where AEN did not identify the material facts of any breach of Mr Coulston’s obligations as guarantor under the Nomination Deed.

Fourth, AEN seeks:

Sixth and seventh, AEN seeks two orders for rectification of the Nomination Deed and a consequential order. Those orders should not be made since AEN’s claim for rectification is not established. The eighth order sought by AEN is consequential on the making of rectification orders and should not be made where they are not made.

Ninth, AEN seeks a declaration that:

Twelfth, AEN seeks an order, by way of specific performance of the Nomination Deed, that AEN and Mr Coulston direct the solicitors holding the first instalment amount to release and refund it to AEN, pursuant to cll 24.1, 24.2, 24.11 and item 2(c) of the Schedule to the Nomination Deed or, alternatively, 1VD and Mr Coulston pay the sum of $1,419,736 plus GST to AEN. That declaration cannot be made given the findings that I have reached above. There would in any event be no basis for making such an order against Mr Coulston where AEN did not plead the material facts of any breach of his obligations as guarantor under the Nomination Deed in that respect. Thirteenth and fourteenth, AEN seeks equitable damages and damages. No basis for equitable damages or damages was established.

Fifteenth, AEN seeks a declaration that 1VD’s and Mr Coulston’s conduct is in contravention of certain provisions of the Australian Consumer Law. The basis for that declaration is not established given the findings I have reached above. Sixteenth, AEN claims damages or other relief consequential on the fifteenth declaration, and the basis for that relief is not established where the basis for that declaration is not established. Seventeenth, AEN seeks interest which is not established where a claim for damages or compensation is not established Eighteenth, it seeks costs, and I will deal with the question of costs below. Nineteenth, it seeks such further orders as the Court seems fit, and the question of further orders in respect of its liability as to costs may arise after judgment.

Twentieth, AEN seeks an order that:

Twenty-first, AEN seeks damages, identified as payments made to 1VD and Mr Coulston being all of the instalment amounts already released and holding costs. That order could not be made on the findings that I have reached above and because AEN has not established a cause of action that would result in an award of damages, nor has it quantified the amount of damages that could be awarded, where its quantified claim does not allow for the benefit which it has obtained from ownership of the land and the development opportunity in respect of the land, and it does not quantify the holding costs that it claims.

For completeness, 1VD also relies on an estoppel in its Commercial List Reply, apparently in the nature of a promissory or representational estoppel of the kind considered in Waltons Stores (Interstate) Ltd v Maher (1998) 164 CLR 387 (“Waltons v Maher”) and Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39 (“Verwayen”), in response to AEN’s denial of its contractual claims. In its Reply to AEN’s Commercial List Response, 1VD repeats paragraph 4(c) of its Commercial List Cross-Claim Response (to which I refer below) and contends that AEN is estopped from rescinding the Nomination Deed, contending that a valid Development Approval cannot provide for more than 22 one-bedroom apartments and studios in total and/or apartments having less than 50 square metres in total area and asserting that the Final DA is not a valid Development Approval within the meaning of cl 24.1 of the Nomination Deed.

1VD’s estoppel claim is more fully articulated in its Amended Commercial List Cross-Claim Response (ACCR [4(c)]), where 1VD identifies a number of occasions from August 2018 until October 2018 which it contends amounted to notification to AEN that it intended to change the apartment mix for the purposes of the Development Approval in order to meet Council’s requirements, by including studio apartments of less than 50 metres internal area such that there would be greater than 21 one bedroom apartments and studios in total.

1VD refers, first, to a meeting on 9 August 2018 at the offices of 1VD’s solicitors, attended by Mr Coulston, Mr Ngo and Mr Huang. Mr Coulston’s evidence is that the possible inclusion of studio apartments in the project was first raised at this meeting. Mr Ngo denies that matter was raised at that meeting. On balance, I prefer Mr Coulston’s evidence to Mr Ngo’s evidence, both because of the view that I have formed as to their respective credit, and because it is likely that it was raised at that meeting, when it was confirmed in a letter dated the next day, 10 August 2018 (Ex P6, 2554) which Mr Coulston emailed, inter alia, to Mr Ngo and Mr Huang on 12 August 2018 (Ex P6, 2555) which also attached amended sketches and a dropbox link providing access to proposed further amended plans. By the attached letter dated 10 August 2018, Mr Coulston put a proposal as to a dispute between the parties as to 1VD’s then threat to terminate the Nomination Deed, and then went on to observe that AEN “reserves its right to otherwise vary the apartment/carpark mix in accordance with clauses 24.11, 25.1 & 25.2 including but not limited to the inclusion of A[partment] D[esign] G[uide] compliant studio apartments in order to ensure the DA accords with the Gazettal” (Ex P6, 2555; emphasis added). By email dated 14 August 2018 to Mr Ngo, Mr Coulston requested an urgent response to his email dated 12 August 2018 and provided a further copy of that letter (Ex P6, 2556).

However, on 14 August 2019, Mr Ngo responded (Ex D1, 1119) that:

1VD refers, third, to emails dated 23 and 26 September 2018 referring to a change of unit mix to include “6 studio serviced apartments”. As I noted above, on 23 September 2018, Mr Coulston emailed Mr Huang and Mr Ngo providing an update regarding the Development Application process, including the reduction in height and variation of the apartment mix, which formed part of the Final DA (Ex P6, 2647). On 26 September 2018, Mr Coulston emailed Mr Ngo outlining the Council’s remaining issues with the Final Development Application, and stating that one of the strategies being used was the inclusion of smaller Apartment Design Guide compliant studio apartments into the apartment mix (Ex P6, 2648).

1VD also refers to further emails dated 5 October 2018 and 14 October 2018. On 4 October 2018, Mr Dickson’s firm emailed amended architectural plans for inclusion in the Final Development Application to Mr Coulston (Ex P6, 2654) and, by email dated 5 October 2018, Mr Coulston sent a copy of the final architectural plans to Mr Ngo (Ex P6, 2656, 2658). On 14 October 2018, Mr Coulston advised Mr Ngo that approval from Council was likely to be obtained in accordance with the final architectural plans sent to Mr Ngo on 5 October 2018 (Ex P6, 2717).

1VD pleads that AEN did not communicate any objection to those matters and, by its silence, represented from August 2018 onwards that it had no such objection and, in reliance on that representation, 1VD procured the Final DA, incurred costs in doing so and thereby acted to its detriment. By its Commercial List Reply to the Commercial List Cross-Claim Response, AEN responds to that claim in somewhat convoluted terms as follows:

The applicable principles in respect of a claim for a promissory or representational estoppel were summarised in Waltons v Maher where Brennan J observed (at 428) that, to establish an equitable estoppel, the plaintiff must first prove that:

In Silovi v Barbero (1988) 13 NSWLR 466 at 472, Priestley JA (with whom Hope and McHugh JJA agreed) summarised the principle arising from Waltons v Maher as requiring, relevantly:

In Verwayen, Deane J observed (at 444) that the law does not permit an unconscientious departure by one party:

I also bear in mind Ball J’s summary of those principles and the differences between the relevant forms of estoppel in Twigg v Twigg (No 4); Lambert v Twigg Investments Pty Ltd (No 3) (2020) 147 ACSR 389; [2020] NSWSC 1159 at [147]-[149], as follows:

I am not satisfied that 1VD has established the basis for a promissory or other estoppel here, given Mr Ngo’s 14 August 2019 email. On balance, I am not persuaded that 1VD (through Mr Coulston) assumed, from the point at which it advised AEN (through Mr Ngo) of the inclusion of studio apartments, that AEN did not object to that course or that AEN, by its silence after Mr Ngo’s email, induced 1VD to adopt any such assumption. I also cannot find that AEN acted on reliance on such an assumption, to establish a promissory estoppel, although I recognise that it incurred significant further costs to progress the development application in a form that included studio apartments. This is also not, it seems to me, a case of conventional estoppel, because AEN may well have been keeping its options open, being content to leave 1VD to incur the costs of completing the development approval while leaving open whether it would or would not seek to avoid paying the Final Instalment of the Nomination Fee or reimbursing those costs. On that basis, I would not find that AEN was estopped from relying on the inclusion of studio apartments in the development in order to deny 1VD’s entitlement to the Final Instalment of the Nomination Fee or the reimbursement of expenses subject to the cap in the Nomination Deed, had I reached the view that it was contractually entitled to do so.

For these reasons, 1VD succeeds in its primary claim and AEN fails in its Cross-Claim. AEN must, in the ordinary course, pay 1VD and Mr Coulston’s costs of the proceedings, and I note that Mr McInerney has foreshadowed that an order for costs may be sought on a special basis.

I direct the parties to bring in agreed short minutes of order to give effect to this judgment, including as to costs, or otherwise their respective short minutes of order and short submissions as to the differences between them within 7 days of this judgment.