Causing economic harm to property developers : damages for starting an incurably bad appeal?

A recent decision of the Queensland Court of Appeal involved an unusual statement of claim made on behalf of the developer of a proposed resort in Port Douglas. The decision is The Beach Club Port Douglas Pty Ltd v Page [2005] QCA 475. The issue The defendant had objected to a development application of the plaintiff developer and lodged an appeal in the Planning and Environment Court against the council decision granting a development permit. The main issue in the Planning and Environment Court was whether the site coverage of the proposed resort was excessive. In a separate action (the subject matter of the present appeal), the plaintiff developer claimed damages for ‘negligence’ alleging that the defendant had breached a duty of care not to appeal without properly or reasonably assessing whether the development qualified for a permit given that the resort qualified for the maximum allowable site coverage. It was alleged that the appeal lodged by the defendant in the Planning and Environment Court had no reasonable prospects of success and that any reasonable person properly advised would know, or ought reasonably to have known, that to be so. The defendant had been “put on notice” that the plaintiff would incur loss of $10,000 for every day there was a delay in starting construction of the resort. The claim made by the developer required the court to consider those circumstances where a person may lawfully and deliberately cause economic harm to another. Was a duty of care owed by the defendant for negligent conduct of litigation that caused economic loss to the plaintiff?