Bailey v RSL Lifecare Limited

[2015] NSWSC 448

Supreme Court

New South Wales

Medium Neutral Citation:	Bailey v RSL Lifecare Limited [2015] NSWSC 448
Hearing dates:	27 February 2015
Date of orders:	22 April 2015
Decision date:	22 April 2015
Jurisdiction:	Equity Division
Before:	Darke J
Decision:	Summons is dismissed with costs.
Catchwords:	CONTRACT – formation – whether concluded agreement reached for licence of unit in retirement village – held, no binding contract made EQUITY – equitable estoppel – whether operator of retirement village precluded from denying that it is bound to proceed to licence unit in retirement village – whether reasonable for plaintiff to consider that operator was irrevocably committed to proposed transaction – held, claimed estoppel not established
Legislation Cited:	Retirement Villages Act 1999 (NSW) ss 26, 43 Retirement Villages Regulation 2009 (NSW) cl 15A
Cases Cited:	Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
Category:	Principal judgment
Parties:	Kerrie Lee Bailey (plaintiff) RSL Lifecare Limited (defendant)
Representation:	Counsel: G A Moore (plaintiff) B Ilkovski (defendant) Solicitors: Sharon Moss Legal (plaintiff) Atkinson Vinden (defendant)
File Number(s):	2014/327037
Publication restriction:	Nil

Judgment

Introduction

1. The plaintiff, Kerrie Bailey, alleges that a binding contract was made with the defendant whereby the plaintiff would licence a residential unit (Northern Unit 22) in the retirement village operated by the defendant at Narrabeen (“the Village”). She seeks a decree of specific performance of the alleged contract.

2. The plaintiff contends, in the alternative, that the defendant, by its conduct, is precluded by an equitable estoppel from denying that it is bound to enter into the alleged agreement.

3. The defendant, RSL Lifecare Ltd, denies that a concluded agreement was reached. It contends that it gave no approval to the transaction and that even if approval was given, viewed objectively, it should not be determined that a binding agreement had been reached. The defendant contends that even if a binding agreement had been made, a decree of specific performance should be refused because such a decree would require the defendant to act in breach of the Retirement Villages Act 1999 (NSW) (“the Act”). The defendant further denies that any estoppel arises in the circumstances.

4. The proceedings were commenced by Summons filed on 6 November 2014. The plaintiff’s case is supported by an affidavit she swore on 5 November 2014. The defendant relies upon affidavits sworn by Ron Thompson, its Chief Executive Officer, Mark Broadhead, its Chief Financial Officer, George Main, the General Manager of the Village, and Rita Banning, who is employed in the accounts department at the Village. Only the plaintiff and Mr Main were cross-examined.

Summary of evidence

5. On 10 July 2007, the plaintiff commenced employment with the defendant at the Village. She has fulfilled various roles since then. From about February 2012 she was a Sales Manager. In that position, the plaintiff’s responsibilities included preparing Licence Agreements and Rental Agreements in respect of incoming residents and tenants. At least in more recent times, the plaintiff reported to Mr Main, the General Manager of the Village. The plaintiff will be 55 years of age on 22 October 2015.

6. In 2012, after the plaintiff and her husband had separated, the plaintiff was permitted by Mr Main to move into a unit (CH2) in the Village on a temporary basis until the intending incoming resident moved in. On about 20 November 2012, the plaintiff moved out of unit CH2 and, with the permission of Mr Main, moved into a different unit (EG905) at the Village. Mr Main says that he obtained approval from Mr Thompson for this arrangement. The plaintiff, at Mr Main’s request, prepared a residential tenancy agreement which was then signed by the plaintiff, and by Mr Main on behalf of the defendant.

7. Whilst the plaintiff was in occupation of unit EG905, she arranged a meeting with Mr Thompson. She asked him whether it would be possible for her to “purchase” unit LG801 by way of a special arrangement. Mr Thompson declined the request. The plaintiff says that she made the approach to Mr Thompson rather than Mr Main because the arrangement she was proposing was unusual for an “LG” unit as opposed to an “FC” unit.

8. It appears that it was common for persons employed by the defendant to use the terms “purchase” or “sale” in relation to transactions involving long term licences of units in the Village.

9. In about early 2013, Mr Main informed the plaintiff that she would have to vacate unit EG905 as he wanted to sell it. The plaintiff asked Mr Main whether she could obtain a “long term rental” of unit D & J 21, but this request was also declined. Instead, Mr Main offered the plaintiff accommodation in Northern Unit 22. He asked her to prepare a residential tenancy agreement for such accommodation. The plaintiff did so, and the agreement was again signed by the plaintiff, and by Mr Main on behalf of the defendant. The plaintiff went into occupation of Northern Unit 22 on about 29 April 2013. Under the agreement, the term was expressed as “UFN”, starting on 29 April 2013 and ending on “UFN”. I would take “UFN” to mean “until further notice”. Under the tenancy agreement, the plaintiff was obliged to pay rent of $118 per week.

10. The Northern Units comprise about 80 of the more than 600 units in the Village. The Northern Units are treated as “concessional accommodation”. According to Mr Main, such units are generally licenced for $50,000 each, whereas the next cheapest units in the Village are licenced for $200,000. It seems that the Northern Units are very much in demand, and there is a waiting list for entry. The management of that waiting list was part of the plaintiff’s responsibilities. The Northern Units are commonly made available to persons facing some financial hardship.

11. The plaintiff deposed that in about June 2013 she had a conversation with Mr Main in his office to the following effect:

Plaintiff:   “Could I purchase Northern Unit 22, I can afford it, and I can upgrade to a bigger unit further down the track. […] I am living in my unit and feel safe and secure.”

Mr Main:   “That’s why people want to live in the Village […] I will discuss the matter with Ron [Thompson] at our next meeting.”

12. The plaintiff further deposed that in about July 2013 she had another meeting with Mr Main in his office during which a conversation to the following effect occurred:

Plaintiff:   “Has the decision regarding my purchasing the unit had [sic] been made yet?”

Mr Main:   “I have a meeting with Ron [Thompson] later today and I will raise the matter then.”

13. The plaintiff says that she raised the matter with Mr Main again on 25 September 2013. She deposed that on that day there was a conversation to the following effect:

Plaintiff:   “My term deposit is maturing tomorrow and I need to advise the bank whether to reinvest my funds. […] I am wondering, do you have approval from “up top” yet?”

Mr Main:   “Yes, pay your deposit.”

Plaintiff:   “The unit is a bedsitter and the bathroom has not been refurbished. Can I confirm the purchase price?”

Mr Main:    “The usual price, $50,000.”

Plaintiff:   “I will place a $10,000 deposit on Northern Unit 22 tomorrow morning and pay the remaining $40,000 in three months.”

14. She says that she saw Mr Main nod in agreement before he walked away. The plaintiff says that this conversation took place on a pathway in an area underneath Mr Thompson’s office.

15. Mr Main, in his affidavit, agreed that in June or July 2013 the plaintiff asked him whether she could purchase Northern Unit 22. He says that in response he said to her:

“You will need Ron’s permission to purchase a unit.”

16. Mr Main deposed that he did not recall speaking to Mr Thompson about the plaintiff’s request. He says that, some months later, the plaintiff told him that she was meeting with Mr Thompson privately to discuss buying a unit, and that a further few days later she told him that Mr Thompson had agreed to let her purchase Northern Unit 22. Mr Main says that he then said to the plaintiff:

“OK, you know the process, deposit of $10,000 is required and we will need to prepare the Retirement Village Contract.”

17. Mr Main denied that the plaintiff ever asked him whether the decision regarding her purchase had been approved, or whether he had approval from “up top”. He further denied that he told the plaintiff that Mr Thompson had given his approval as alleged by the plaintiff.

18. On 26 September 2013, the day after the plaintiff says she met with Mr Main, she paid a deposit of $10,000 in respect of Northern Unit 22. The deposit was paid by cheque delivered to the defendant’s accounts department. A receipt was issued.

19. Mr Thompson also swore an affidavit. He deposed that at some stage he had a conversation with Mr Main to the following effect:

Mr Main:   “Kerrie wants to reside in the Village permanently. I told her that she would need your permission to do this, so she would probably be speaking to you soon in this regard.”

Mr Thompson:   “She can’t live here permanently. Her tenancy agreement is only meant to be short term anyway. She needs to leave.”

Mr Main:   “I agree.”

Mr Thompson:   “You’re Kerrie’s manager. I think it’s best that you explain to her that she can’t live here permanently rather than me and that you take steps to have her leave. If she wants to meet with me, I am happy to do so but I will refer her back to you.”

Mr Main:   “Ok.”

20. Mr Thompson further deposed that a few days after the meeting with Mr Main, he was approached by the plaintiff and a conversation to the following effect occurred:

Plaintiff:   “As you know I’m currently living in the Village on a short term tenancy agreement. I enjoy living here and would like to come to a permanent arrangement.”

Mr Thompson:   “You will have to take this up with George as he is the person handling it.”

21. Mr Thompson says that he and the plaintiff then spoke about other matters, but she twice more raised with him the question of long term residence in the Village. He says that each time she raised that matter, he said to her:

“Speak to George.”

22. Mr Thompson says that this is the only occasion he can recall during which he spoke to the plaintiff about her desire to licence a unit. He further says that he never gave her permission to licence a unit.

23. The plaintiff, for her part, deposed that she never had any direct conversation with Mr Thompson about her purchase of Northern Unit 22. She says that all her conversation about it was with Mr Main. In the course of cross-examination she maintained that she only spoke to Mr Thompson about unit LG801, and said that she could not recall him saying that she would need to speak to Mr Main.

24. The plaintiff says that after she had gained authorisation to purchase Northern Unit 22, and after she paid the $10,000 deposit, she obtained a bank loan to cover part of the remaining amount of $40,000. No details of the loan were adduced in evidence. The plaintiff also says that after she had gained authorisation to purchase Northern Unit 22, she sold some items of furniture which had been in storage, and purchased some furnishings specifically suited to Northern Unit 22. She installed blinds and new flyscreens. She had her television fixed to the wall. She also purchased a dishwasher, a rangehood and an air conditioning unit.

25. The plaintiff deposed that in about October 2013, she prepared the licence agreement for her purchase. She says that it was standard procedure for her to prepare such agreements, generally about six weeks after a deposit has been paid, and for the defendant to execute such agreements “closer to the settlement date”. According to the plaintiff, settlement generally occurred within three months of the payment of the deposit. She said that, as far as she was aware, if the purchase did not go to settlement for some reason, the deposit would be refunded. She deposed that she was aware that the standard procedure involved a review of licence agreements by Mr Broadhead, who co-signs the agreements and passes them on to Mr Thompson to sign. In her cross-examination she explained that the agreements so reviewed by Mr Broadhead were ones that had already been executed by the purchaser.

26. The agreement she prepared largely consists of printed terms in an apparently standard form, with various additions and notations made by the plaintiff, some in her handwriting. The agreement is described as a Retirement Village Contract, and specific reference is made to s 43 of the Act which concerns the prescription of standard form contracts.

27. In the Key Terms section of the agreement, the premises are described as Northern Unit 22. The plaintiff inserted the date 17 January 2014 as the date of entry into the contract, the agreed date of occupation, and also the date from which she was obliged to pay the recurrent charges. It is likely that the plaintiff inserted that date on 17 January 2014 itself, shortly prior to the submission of the agreement to Mr Broadhead. The nature of the residence right conferred under the agreement is described in the Key Terms section as a right to occupy the premises rather than as ownership of the premises.

28. In the Financial Terms section of the agreement, it was provided that an entry payment or ingoing contribution of $50,000 was payable. The entry payment was divided into components. $10,000 was described as a “Loan Component”. There was also a “Non-Refundable Component”, being 10% of the entry price or $40,000, whichever is greater. It was noted that the holding deposit of $10,000 formed part of the $50,000 amount. It was also provided that the full entry payment was due prior to or on occupation of the premises. An amount of $200 plus GST was stated to be payable on entry in respect of the administrative costs associated with preparation of the contract.

29. It was further provided that the plaintiff would pay recurrent charges for the premises of $240 per fortnight. Such charges were able to be varied from time to time by the defendant in a certain manner. Finally, the Financial Terms section provided for amounts that were payable on termination of the contract. The plaintiff would be obliged to pay a departure fee, which was based on a percentage of the entry payment up to a maximum of 20% of the entry payment (that is, $10,000), together with the Non-Refundable Component of the entry payment, and any outstanding charges. The defendant would be obliged to pay the Loan Component of $10,000. The plaintiff was not entitled to any portion of a capital gain, and was not responsible for any portion of a capital loss.

30. The Financial Terms section was followed by 11 pages of printed General Terms. There were also 18 pages of printed Additional Terms.

31. The form of agreement provides for execution by the defendant and the plaintiff, and the witnessing of such execution. The execution by the defendant is contemplated to be carried out by its Chief Financial Officer, Mr Broadhead, and its Chief Executive Officer, Mr Thompson, as authorised officers pursuant to s 126 of the Corporations Act 2001 (Cth).

32. One of the attachments to the agreement was a Disclosure Statement (as required by s 18 of the Act) completed by the plaintiff and said to have been given to her on 31 October 2013. The Disclosure Statement is not signed by the defendant. Also attached was a copy of the Village Rules, and an Inspection Report in respect of Northern Unit 22. The Inspection Report was a report prepared in relation to an inspection carried out by the plaintiff and another employee, Ms Sonia Lechner, on 29 April 2013 when the plaintiff first took occupation of the unit. Other attachments concerned services provided to residents, details of operating costs, the use of car parks at the Village, location and floor plans, details of the current Village budget, and a schedule of inclusions.

33. The agreement was kept in the possession of the plaintiff. She executed the agreement on 5 November 2013. The plaintiff paid $35,000 to the defendant on 24 December 2013. A receipt issued in respect of that payment described it as “Partial Settlement – Northern 22”. On 17 January 2014 the plaintiff paid the defendant $5,000, an amount which brought the total paid by the plaintiff to $50,000. The receipt issued on 17 January 2014 in respect of the $5,000 paid on that day described it as “Final Settlement – Northern 22”. As was the case with the payment of the deposit, the payments of $35,000 and $5,000 were made by cheque delivered to the defendant’s accounts department. After she made the payment on 17 January 2014, the plaintiff placed the agreement in the pigeon hole in Mr Broadhead’s office in accordance with the standard procedure.

34. Later on 17 January 2014 Mr Broadhead reviewed the financial arrangements embodied in the agreement and then signed it. He then delivered the agreement to Mr Thompson’s office. The covering letter stated:

“I have reviewed financial arrangements the above-mentioned license agreement to K Bailey, Northern Unit 22. The ingoing contribution is $50,000, with $40,000 non-refundable and 2% per DMF for 10 years. Capital gain or loss is not shared by the resident.

I can recommend signing this agreement.”

35. The agreement was not dealt with by Mr Thompson immediately. On 30 January 2014, Mr Broadhead sent him an email about a pile of contracts which had been left on Mr Thompson’s desk, including one for the plaintiff. Mr Thompson, who had not seen the agreement before that time, promptly sent an email to Mr Main in the following terms:

“George – what’s going on???? Why am I being asked to sign a contract for Kerrie Bailey??!!!! Action now.”

36. Mr Main deposed that he had been told by Mr Thompson in mid-November 2013 that he wanted the plaintiff to move out of the Village, and that he thus understood that she would not be purchasing Northern Unit 22. Mr Main conceded, however, that he did not take steps to inform her of the position, or take steps to terminate the residential tenancy agreement. Mr Main explained this conduct as arising from a combination of being more concerned at the time with very difficult personal circumstances he was then facing, with his son experiencing severe health problems, and a reluctance to give the plaintiff bad news when she herself was about to undergo surgery.

37. After Mr Main returned from annual leave in late January 2014, Mr Thompson told him that he had to sort the matter out quickly. Mr Thompson directed that Mr Main, along with Mr Broadhead, meet with the plaintiff, terminate her tenancy, and return the $50,000 she had paid.

38. On 30 January 2014, Mr Main and Mr Broadhead, in accordance with that direction, met with the plaintiff in her office. Mr Main handed the plaintiff a Notice to Terminate Tenancy Agreement which called for vacant possession of Northern Unit 22 to be given by 1 March 2014. After the plaintiff complained, saying in effect that she had purchased the unit and that the defendant had her money, Mr Main placed a cheque for $50,000 on the plaintiff’s desk for her. He apologised and said that it was nothing to do with her work performance. The meeting ended with the plaintiff saying that she needed to obtain legal advice. The plaintiff did not present the cheque for payment. The plaintiff thereafter instituted some proceedings in the Civil and Administrative Tribunal. She has since remained in possession of Northern Unit 22.

Assessment of the evidence of the plaintiff and Mr Main

39. As mentioned earlier, only the plaintiff and Mr Main were cross-examined. The plaintiff was an impressive witness. She gave her evidence in a clear and straightforward manner. She appeared to have a good recollection of the events, and was evidently trying to honestly answer the questions put to her, even where the answers were not particularly helpful to her case. I have no hesitation in accepting her evidence as truthful and generally reliable.

39. I also formed the view that Mr Main was doing his best to honestly answer the questions put to him. He was prepared to concede during his cross-examination that certain aspects of the plaintiff’s version of what had passed between them had occurred, or may have occurred. Mr Main agreed, for example, that in June and July 2013 he had told her that he would discuss the matter with Mr Thompson. He further agreed that it was possible that in July 2013 the plaintiff asked him whether the decision regarding her purchase of the unit had yet been made. Mr Main did not recall, but was not prepared to deny, that in September 2013 the plaintiff asked him about whether approval had been given from “up top”. He did recall telling the plaintiff on that occasion that the price would be $50,000.

40. Having regard to those concessions and to my positive impression of the plaintiff as a witness, where there is conflict between her evidence and Mr Main’s evidence, I generally prefer the evidence of the plaintiff. In particular, I accept her evidence in relation to the conversations she said occurred in the period between June to September 2013 about purchasing Northern Unit 22.

41. I accept, therefore, that Mr Main told the plaintiff that he would speak to Mr Thompson about the proposed purchase.

42. I further accept the plaintiff’s evidence that she did not speak to Mr Thompson about purchasing Northern Unit 22, and did not tell Mr Main that Mr Thompson had approved of the purchase. I have not overlooked the evidence given by Mr Thompson about a conversation with the plaintiff in which she said she would like to come to “a permanent arrangement”. That evidence was not challenged. However, Mr Thompson’s account is not specific as to time, and the terms of the conversation are not necessarily directed to Northern Unit 22. Given that the plaintiff demonstrated a good recollection of events, and bearing in mind that the matter of securing long term residency in the Village was a matter of great significance to her, I think it is likely that the conversation deposed to by Mr Thompson concerned a unit other than Northern Unit 22 (probably Unit LG801 as suggested by the plaintiff in cross-examination), and took place prior to the period in 2013 when the plaintiff was discussing the purchase of Northern Unit 22 with Mr Main.

43. In any event, whatever belief or understanding Mr Main actually had about Mr Thompson’s attitude, or likely attitude, to a purchase of Northern Unit 22 by the plaintiff, Mr Main had a conversation with the plaintiff on 25 September 2013 to the effect that approval from “up top” had been given, the plaintiff could proceed to pay her deposit, and that the purchase price would be $50,000.

Submissions

45. Mr G A Moore of Counsel, who appeared for the plaintiff, submitted that on the basis of the plaintiff’s version of events, a concluded agreement was reached between the plaintiff and Mr Main, the relevant officer of the defendant dealing with the matter on its behalf. Mr Moore submitted that the plaintiff had been approved as a suitable person to become a licensee, and she had paid the full amount of the agreed price of $50,000. It was contended that it was agreed between the parties that, subject only to the plaintiff paying the deposit and the balance of the purchase price, and signing a residence contract that conformed with the Act, the defendant would accept the plaintiff as the purchaser. In other words, no further approval from the defendant was required after Mr Main told the plaintiff on 25 September 2013 that approval had been given. It was not suggested that a binding agreement was made when the plaintiff paid the deposit. Mr Moore submitted, in the alternative, that even if there was no concluded agreement, the defendant, by its conduct, including from late 2013 when it failed to inform the plaintiff that it did not wish to proceed with any licence, is estopped from denying that it is bound to proceed with a licence agreement on the terms of the agreement prepared by the plaintiff. Reference was made to certain passages from Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 (at 405-408 and 424-425) concerning promissory estoppel and equitable estoppel.

46. Mr B Ilkovski of Counsel, who appeared for the defendant, submitted that even on the plaintiff’s version of events, no binding agreement had been made. He emphasised that both parties were aware of the usual or standard process for the making of licence agreements, which was a process that commenced with the payment of a non-binding deposit and culminated in the execution of the agreement by Messrs Broadhead and Thompson as authorised officers on behalf of the defendant. Mr Ilkovski also emphasised that the licence agreement prepared by the plaintiff was not the subject of any discussion prior to its placement by her in the pigeon hole in Mr Broadhead’s office. The form of agreement, he submitted, was no mere formality. It was required (by virtue of s 43 of the Act and clause 15A of the Retirement Villages Regulation 2009 (NSW), which was inserted with effect from 1 October 2013 by the Retirement Villages Amendment (Standard Contract) Regulation 2013(NSW)) to deal with various matters, including the amount of any ingoing contribution, the agreed date of occupation, whether a departure fee is payable by the resident on termination, and the method of calculating any such fee.

47. In the alternative, Mr Ilkovski submitted that even if there was a concluded agreement, specific performance would not be decreed, as performance in accordance with the contract would require the defendant to act contrary to the provisions of the Act. This is because, so it was submitted, the Act does not permit the operator of a retirement village to enter into a residence contract with someone who is not a “retired person” as defined in the Act. The agreement prepared by the plaintiff stipulates 17 January 2014 as the date the contract was entered into and also the agreed date for occupation of the premises, yet the plaintiff was not then (and is not even now) a “retired person” within the meaning of the Act. This is because she is neither 55 years of age nor retired from full-time employment.

48. Whilst Mr Moore took issue with the proposition that the agreement was tainted by illegality, he seemed to accept that any decree of specific performance could only be made to operate in respect of a period after the plaintiff becomes a “retired person” as defined. This position is reflected in the form of order 2 as sought in the Summons.

49. Finally, Mr Ilkovski submitted that no estoppel arose in this case because there were no clear inducements made by the defendant, and in any event there was no evidence of significant detriment suffered by the plaintiff in reliance upon the defendant’s conduct. He further contended that there could be no estoppel as alleged because such estoppel would itself be contrary to the Act.

Determination

50. For the reasons which follow, it is my opinion that no binding contract was entered into between the plaintiff and the defendant for the licence of Northern Unit 22. The conduct of the respective parties throughout the relevant period from June 2013 to January 2014, when viewed objectively, does not lead to the conclusion that such a contract had been made.

51. The conduct of the parties must be assessed in the light of the context in which it occurred. It is noteworthy that the type of agreement under discussion, namely, a licence agreement conferring a right to occupy a unit in a retirement village, is one which is entered into in the context of the provisions of the Act (e.g. Division 1 of Part 4 of the Act, including s 26 which provides that village contracts are not enforceable by the operator of a retirement village unless the contract is in writing).

52. It is also noteworthy that both parties had experience of a standard procedure that was followed when the defendant entered into licence agreements of units in the Village. That standard procedure involved, inter alia, the payment of a deposit by the intending purchaser, a review by the defendant of the executed agreement, and the execution of the agreement by the defendant.

53. In this case, Mr Main told the plaintiff on 25 September 2013 that approval had been obtained from “up top” (that is, from Mr Thompson) in relation to her request to purchase of Northern Unit 22, that she could proceed to pay a deposit, and that the purchase price would be $50,000. It is likely that Mr Main also said something about the preparation of a Retirement Village Contract. Mr Main deposed that he said something to that effect, and the plaintiff for her part proceeded to prepare such a contract, much as she would in the usual case, following the payment of a deposit.

54. The general nature and content of the contract prepared by the plaintiff is described above (see [26]-[32]). The form of contract appears to conform with the standard form village contract prescribed by clause 15A of the Retirement Villages Regulation 2009. Nevertheless, it is readily apparent that it contains provisions that were not, so far as the evidence discloses, the subject of any discussion between the plaintiff and the defendant. The date stipulated as the agreed date of occupation, the provisions concerning the components of the ingoing contribution, and the provisions concerning amounts payable on termination, are examples. Although there was evidence that the sum of $50,000 was “the usual price”, the evidence did not go so far as to show what was encompassed within the concept of “the usual price”. Neither did the evidence establish that the provisions concerning the ingoing contribution or the amounts payable on termination were encompassed within that concept, or were otherwise usual terms. It therefore seems to me that the form of agreement prepared by the plaintiff included a number of important provisions that were not the subject of agreement with the defendant.

55. I do not think that it can be said that there was a binding contract at the time the agreement was placed in Mr Broadhead’s office on 17 January 2014, even if (as was the case) the plaintiff had by that time paid the full amount of $50,000 to the defendant. In the circumstances, and in accordance with the standard procedure known to both parties, the submission of the form of agreement to Mr Broadhead can only be regarded as the placement of the agreement with the defendant for its review and, if found to be satisfactory, its acceptance. I agree with the submission made by Mr Ilkovski that the form of agreement was no mere formality. That is so even where, as here, the defendant had indicated to the plaintiff that approval had been given in relation to her request to purchase Northern Unit 22. Such an approval, even if given by Mr Thompson himself, cannot in the circumstances be regarded as the acceptance, in advance, of the terms of an agreement to be prepared by the plaintiff. In my opinion, the approval should be regarded as no more than an approval of a general kind, something akin to an approval in principle to a proposed transaction, given in circumstances where the parties contemplated the preparation of a written agreement that would ultimately be submitted to the defendant for its review.

56. In my opinion, the defendant retained the right to make a decision about whether to enter into a licence agreement with the plaintiff. That is to say, the defendant was not bound to proceed at all events, or upon certain terms. The parties had not, by 17 January 2014, reached agreement on all the terms of the licence. It remained open to the defendant to decline to proceed to enter into the agreement, whether on the terms advanced by the plaintiff, or at all. Even though Mr Broadhead was personally satisfied with the financial aspects of the form of agreement, Mr Thompson did not wish the defendant to proceed, and the form of agreement was thus not executed by the defendant and returned to the plaintiff, or otherwise accepted by the defendant. No binding contract for the licence of Northern Unit 22 was made between the parties. The issues raised concerning the remedy of specific performance do not therefore arise.

57. It is necessary to deal with the plaintiff’s alternative argument that the defendant is estopped from denying that it is bound to proceed to licence Northern Unit 22 to the plaintiff. As I understand the argument, it primarily rests upon the contention that the defendant informed the plaintiff in September 2013 that approval had been given for her to purchase Northern Unit 22 then failed, until after the plaintiff had paid the $50,000 price and submitted the form of agreement, to inform her that it did not in fact intend to proceed to licence the unit. The argument further rests upon the contention that it is unconscionable for the defendant to deny that it is bound to proceed on the terms of the agreement prepared by the plaintiff, having regard to the payments made by the plaintiff and her other actions carried out on the understanding that she had obtained approval (or authorisation, as she put it in her affidavit) to purchase Northern Unit 22.

58. The plaintiff undoubtedly placed reliance upon the statements made by Mr Main that approval had been obtained from “up top”, that the plaintiff could proceed to pay a deposit, and that the purchase price would be $50,000. The plaintiff considered that she had thereby obtained authorisation to purchase Northern Unit 22.

59. However, as stated earlier, I do not think that such an approval should be regarded as any more than an approval of a general kind, something akin to an approval in principle to a proposed transaction, given in circumstances where the parties contemplated the preparation of a written agreement that would ultimately be submitted to the defendant for its review. I do not think that it would have been reasonable for the plaintiff to interpret what had been said to her as amounting to a promise or assurance by the defendant that it was irrevocably committed to the transaction and would not later decide against proceeding with it. At most, it would have been reasonable for the plaintiff to regard what had been said to her as an expression of a present intention on the part of the defendant to proceed towards entry into a licence agreement with the plaintiff.

60. On that basis, it may have been reasonable for the plaintiff to think it likely, even very likely, that a binding licence agreement would come into existence, following the submission of the written agreement to the defendant. Nevertheless, I do not consider that it would have been reasonable for the plaintiff to think that the defendant had given up the right to withdraw from the proposed transaction if it wished for any reason to do so.

61. In my view, the plaintiff’s subsequent conduct, including the organising of her finances, the purchase of furniture and other household items, and the installation of blinds and new flyscreens, cannot be regarded as reasonably undertaken on the basis of an assurance by the defendant that it was irrevocably committed to the proposed transaction.

62. The defendant’s conduct on 30 January 2014, in informing the plaintiff that it would not be proceeding to licence Northern Unit 22 to her, did not involve a departure from any representation or assurance given by Mr Main. His statements, viewed objectively, did not convey an assurance that the defendant was irrevocably committed to the transaction. Mr Main’s statements did convey that it was the defendant’s then intention to proceed towards entry into a licence agreement, but that is not inconsistent with the notion that the defendant might later change its mind. In my view, the conduct of the defendant in declining to proceed with the transaction, and in subsequently maintaining that it is not bound to proceed, is not unconscionable in the circumstances. I do not think that any estoppel arises that would preclude the defendant from denying that it is bound to proceed.

63. The defendant may be fairly criticised for not informing the plaintiff sooner that it did not intend to proceed with the licence agreement. It appears that Mr Thompson had made it clear to Mr Main that this was the defendant’s position by no later than about mid-November 2013. Despite having ample opportunity to inform the plaintiff of the position, Mr Main failed to do so. This conduct might well be described as misleading, but the plaintiff did not seek to make out any case on that basis. The defendant’s silence meant that it was reasonable for the plaintiff to continue to rely upon what she had been told by Mr Main. However, as stated earlier, it was not reasonable for the plaintiff to proceed on the basis that the defendant was irrevocably committed to the proposed transaction.

64. For the above reasons, the plaintiff’s estoppel argument also fails. It follows that the plaintiff’s Summons should be dismissed with costs.

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Decision last updated: 23 April 2015