Shaun McElwaine, SC, counsel for the plaintiff Gunns Limited (Receivers and Managers Appointed) (In Liquidation), today told Justice Robert Pearce in the Supreme Court in Launceston that the case was about a dam permit and the failure to grant a water licence.

"As may be expected, one needs a licence from the minister to take water lawfully from a water course," he said.

Mr McElwaine said that the minister or his delegate published a notice about Gunns's water licence application in June 2005, but then took almost six years to make a decision about whether the licence should be granted or not.

He said that Gunns claimed damages for economic loss in the negligent failure to exercise a state law, and there was also a course of action in negligent misstatement, when Gunns replied upon representations made by departmental officers that a water licence would be granted, and therefore constructed the new dam.

Mr McElwaine said that Gunns sold the property, which contained the dam, for $1.55million.

He said the amount of Gunns's primary claim was $645,260, but alternative options were $485,000 or $300,000.

Mr McElwaine said that Gunns was not making a claim beyond the date the administrators were appointed, being September 25, 2012.

In his opening address, Crown counsel Paul Turner, for the defendant, said that he rejected the plaintiff's argument about "negligent misstatement", where Gunns claimed that departmental officers gave the company assurances that a water licence would be granted, which Gunns said it relied upon and then suffered financial loss.

Mr Turner said the officers in fact had no authorisation to give such representations and never made such statements in the first place. 

The trial continues.

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