Summary
Case summary re: 123 259 932 Pty Ltd (123) v Cessnock City Council (Council) (No 2) [2021] NSWSC 1329 (Cessnock case).
The decision of the Cessnock case demonstrates that public authorities, such as Councils should take reasonable action to ensure compliance with lease agreements and other related contracts. The case also highlights the importance of having knowledge of the assets held by another party, as expectation damages will not be awarded if there are no assets.
The Facts
In Cessnock Case, 123 sought damages against the Council for the breach of contract and unconscionable conduct.
Council was the landowner and developer. Council proposed to subdivide Cessnock Airport to include aviation and non-aviation uses. On 26 July 2007 an Agreement for Lease (AFL) was executed by the parties for one of the subdivided lots. To successfully lodge a development application on itself, the Council split its role as developer and its role as the regulator. As the developer Council lodged the DA, and using its planning authority it could then consider and approve the development. 123 proposed to occupy the suite to run adventure flights, a venue for hire and an aviation museum. The AFL provided that if the plan of subdivision was registered by 30 September 2011 Council would grant a 30 year lease to 123. 123 commenced occupation of the land and subsequently erected a 3.5 million dollar hangar on the site.
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