Dunlop v Woollahra Municipal Council

JurisdictionUK Non-devolved
Judgment Date1981
CourtPrivy Council
[PRIVY COUNCIL] ROGER JOHN MASSIE DUNLOP APPELLANT AND WOOLLAHRA MUNICIPAL COUNCIL RESPONDENT [APPEAL FROM THE SUPREME COURT OF NEW SOUTH WALES] 1981 Jan. 12, 13, 14; Feb. 23 Lord Diplock, Lord Simon of Glaisdale, Lord Edmund-Davies, Lord Scarman and Lord Bridge of Harwich

Australia - New South Wales - Beaudesert principle - Resolutions of local authority - Resolutions void - Whether local authority acting unlawfully - Whether misfeasance in discharge of public duty - Negligence - Duty of care to whom? - Local authority - Resolutions of authority diminishing value of development land - Resolutions invalid - Whether duty to take proper legal advice - Whether misfeasance

In 1972 the plaintiff incurred a bank overdraft in purchasing land which he intended to sell for development. The land lay within a zone where under a local planning scheme buildings of flats over three storeys high were permitted but only with specific planning permission from the council as responsible authority under the scheme. On June 10, 1974, on the advice of its solicitor, the council, purporting to exercise powers to regulate building as council for the area which were additional to those under the planning scheme, passed two resolutions, one under section 308 of the Local Government Act 1919 fixing a building line for the plaintiff's land and the other under section 309 of that Act imposing a three storey height restriction. The plaintiff employed an architect to advise him whether having regard to the price paid for the land it would be financially worthwhile to develop it in compliance with the resolutions. The architect advised that it would not. The plaintiff applied to the Supreme Court for a declaration that the resolutions were invalid and void. Wootten J. granted the declaration and held that in making the resolution under section 308 the council had not complied with the procedural requirements as to notice and fair hearing and in making the resolution under section 309 that it had acted ultra vires. He rejected the plaintiff's allegation that in passing the resolutions the council had acted in bad faith. After October 25, 1975, (the date of expiry of the time for any appeal by the council) the plaintiff applied to the council for planning permission for a seven-storey block of flats on the land. That was granted and he sold the land in 1977.

The plaintiff brought an action against the council alleging that he had suffered loss as the result of (1) the unlawful, intentional and positive acts of the council (a claim under the principle enunciated by the High Court of Australia in Beaudesert Shire Council v. Smith (1966) 120 C.L.R. 145); (2) negligence and (3) misfeasance by the council as a public officer in the discharge of its duty. The plaintiff claimed damages for his financial losses in respect of interest and charges on his overdraft from June 10, 1974, to October 24, 1975, rates and taxes for the same period and the architect's fee for the development plans complying with the void resolutions. Yeldham J. dismissed the action on the ground that the plaintiff had suffered no actionable wrong.

On the plaintiff's appeal to the Judicial Committee:—

Held, dismissing the appeal, (1) that, although on the facts the resolutions if valid would have had the effect of reducing the market value of the plaintiff's property, a void resolution was not in itself capable of constituting an unlawful act sufficient to establish a claim under the Beaudesert principle and that, accordingly, since the council's resolutions were the only acts complained of, the plaintiff's claim under that principle failed (post, pp. 699C–D, 701E–702A).

Mogul Steamship Co. Ltd. v. McGregor, Gow & Co. [1892] A.C. 25, H.L.(E.) applied.

Beaudesert Shire Council v. Smith (1966) 120 C.L.R. 145 distinguished.

(2) That, assuming that the council had owed the plaintiff a duty of care, a failure to give him notice of its intention to pass the resolution under section 308 or a fair hearing, although it had been sufficient to render the resolution void, did not in itself constitute a breach of the duty of care sounding in damages; that on the facts, in taking its solicitor's advice as to the passing of the resolutions the council had done all that it could reasonably be expected to do and that, although in regard to the resolution under section 309 that advice had turned out to be wrong and the resolution was ultra vires, such advice on the finely balanced question of law involved given before the judgment of Wootten J. could not amount to negligence on the part of the solicitor giving it, and that, accordingly, the plaintiff's claim in negligence failed in respect of both the resolutions (post, pp. 702C–F, F–703A).

(3) That although the council as a statutory corporation exercising local government functions was a public officer within the scope of the tort of abuse of public office, in the absence of malice or knowledge of the resolutions' invalidity the action of the council in passing them could not amount to a misfeasance sufficient to constitute the tort (post, p. 703B–C).

Judgment of Yeldham J. affirmed.

The following cases are referred to in the judgment of their Lordships:

Beaudesert Shire Council v. Smith (1966) 120 C.L.R. 145.

Dunlop v. Woollahra Municipal Council [1975] 2 N.S.W.L.R. 446.

Grand Central Car Park Pty. Ltd. v. Tivoli Freeholders [1969] V.R. 62.

Kitano v. Commonwealth of Australia (1974) 129 C.L.R. 151.

Mogul Steamship Co. Ltd. v. McGregor, Gow & Co. (1889) 23 Q.B.D. 598, C.A.; [1892] A.C. 25, H.L.(E.).

The following additional cases were cited in argument:

Abbott v. Sullivan [1952] 1 K.B. 189; [1952] 1 All E.R. 266, C.A.

Anns v. Merton London Borough Council [1978] A.C. 728; [1977] 2 W.L.R. 1024; [1977] 2 All E.R. 492, H.L.(E.).

Beaurain v. Scott (1812) 3 Camp. 388.

Brayser v. Maclean (1875) L.R. 6 P.C. 398.

Caltex Oil (Australia) Pty. Ltd. v. Dredge “Willemstad” (1976) 136 C.L.R. 529.

Calvin v. Carr [1980] A.C. 574; [1979] 2 W.L.R. 755; [1979] 2 All E.R. 440, P.C.

Carrington v. Taylor (1809) 11 East 571.

Central Canada Potash Co. Ltd. v. Government of Saskatchewan (1978) 88 D.L.R. (3d) 609.

Dorset Yacht Co. Ltd. v. Home Office [1970] A.C. 1004; [1970] 2 W.L.R. 1140; [1970] 2 All E.R. 294, H.L.(E.).

Eaton & Sons Pty. Ltd. v. Warringah Shire Council (1972) 129 C.L.R. 270.

Foster v. Dodd (1867) L.R. 3 Q.B. 67.

Garret v. Taylor (1620) Cro.Jac. 567.

Henly v. Mayor and Burgesses of Lyme (1828) 5 Bing. 91.

Hoffmann-La Roche (F.) & Co. A.G. v. Secretary of State for Trade and Industry [1975] A.C. 295; [1974] 3 W.L.R. 104; [1974] 2 All E.R. 1128, H.L.(E.).

Keeble v. Hickeringill (1706) 11 East 574n.

Keighley's Case (1609) 10 Co.Rep. 139a.

McGillivray v. Kimber (1915) 26 D.L.R. 164.

Rex v. Whitaker [1914] 3 K.B. 1283; C.C.A.

Rogers v. Dutt (1860) 13 Moo.P.C.C. 209.

Roncarelli v. Duplessis (1959) 16 D.L.R. (2d) 689.

Salemi v. Mackellar (1976) 137 C.L.R. 388.

Shrewsbury's (Earl of) Case (1610) 9 Co.Rep. 46b.

Takaro Properties Ltd. v. Rowling [1978] 2 N.Z.L.R. 314.

Tarleton v. M'Gawley (1794) Peake 270.

Tiernan v. Newcastle City Council (1954) 19 L.G.R. (N.S.W.) 313.

Whaley v. Laing (1857) 2 H. & N. 476.

APPEAL (No. 33 of 1980) by Dr. Roger John Massie Dunlop, the plaintiff, from a judgment of Yeldham J. in the Supreme Court of New South Wales delivered on July 28, 1978, dismissing the plaintiff's action against Woollahra Municipal Council for damages in respect of the plaintiff's financial loss alleged to have been incurred as a result of the council's passing two invalid resolutions on June 10, 1974, which adversely affected the plaintiff's land at 8, Wentworth Street, Point Piper. The plaintiff claimed the amount of interest from June 10, 1974, to October 24, 1975, paid to his bank on an overdraft which had financed the purchase of 8, Wentworth Street, overdraft fees and rates and taxes on the property for the same period and architect's fees.

The facts are stated in the judgment.

A. B. Shand Q.C., Brian Rayment (both of the New South Wales Bar) and Roger Toulson for the plaintiff.

Murray Wilcox Q.C. and P. D. McClellan (both of the New South Wales Bar) for the council.

Cur. adv. vult.

February 23. The judgment of their Lordships was delivered by LORD DIPLOCK.

The action in which this appeal to Her Majesty in Council is brought by the unsuccessful plaintiff, Dr. Dunlop, is the sequel to a previous action between the self-same parties tried before Wootten J. in which the plaintiff was successful: Dunlop v. Woollahra Municipal Council [1975] 2 N.S.W.L.R. 446. From that judgment the defendant, the council, did not appeal. Both that action and the present action arose out of two resolutions which the council passed on June 10, 1974, in purported exercise of their powers under section 308 and section 309 respectively in Part XI of the Local Government Act 1919, to fix a building line for the plaintiff's property at no. 8, Wentworth Street, Point...

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