Bourne v Mooney

[2022] NSWCATCD 62

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Bourne v Mooney [2022] NSWCATCD 62

Hearing dates:

28 April 2022

Date of orders:

23 May 2022

Decision date:

23 May 2022

Jurisdiction:

Consumer and Commercial Division

Before:

M Tyson, Senior Member

Decision:

1. Pursuant to s. 6 of the Agricultural Tenancies Act 1990, the respondents are to pay the applicant compensation in the sum of $174,333.26.

2. The respondents are to pay the applicant’s costs as agreed or assessed.

Catchwords:

AGRICULTURAL TENANCY – Consent of the owner – Tenant improvements – Compensation

Legislation Cited:

Agricultural Tenancies Act 1990 (NSW)

Civil and Administrative Tribunal Act 2013 (NSW)

Cases Cited:

Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1

Gerraty v McGavin (1914) 18 CLR 152

McCann v Coffs Harbour City Council [2015] NSWCATCD 150

Rider v Ford [1923] 1 Ch 541

Wilh. Wilhelmsen Investments Pty Ltd v SSS Holdings Pty Ltd [2019] NSWSCA 32

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Courtney Bourne (Applicant)
Ian Geoffrey Mooney (First Respondent)
John Edward Mooney (Second Respondent)

Kerrie Diane Lumsden (Third Respondent)

Representation:

Counsel:
J Tierney (Applicant)

Solicitors:
Blaxland Mawson & Rose (Applicant)
M Fox of Friedlieb Fox Mcleod (Respondents)

File Number(s):

COM 21/47133

Publication restriction:

Nil

REASONS FOR DECISION

1. By application filed 11 November 2021 in the New South Wales Civil and Administrative Tribunal, the applicant seeks orders for compensation pursuant to the Agricultural Tenancies Act 1990 (NSW) (“the Act”). The principal issue in the proceedings was whether, for the purposes of s. 6 of the Act, the owner had given consent to improvements carried out by the tenant on the relevant farm.

2. The matter was heard on 28 April 2022, with the parties appearing by way of an audio-visual linked hearing. Mr. Tierney appeared for the applicant and Mr. Fox appeared for the respondents.

Background

3. Mr. Courtney Bourne, the applicant, is the lessee under registered lease number AN438113R, for a three-year term commencing 1 February 2018 and ending on 31 January 2022 (“the Lease”). The property leased is located at XX Thirteen Mile Road, Maxwell, New South Wales and is the estate more particularly known as folio identifier 2/830119, as well as all improvements on the property, including all fixtures, fittings, furnishings, plant, machinery and equipment installed by the lessor. The property leased is the farm known as “Willow Haven”. Willow Haven is approximately 840 acres or 340 hectares in area and is located at Maxwell, about 22 kilometres from Wagga Wagga. Willow Haven is a mixed farming property, suitable for sheep, cattle and broad acre farming.

4. When Mr. Bourne entered the Lease, the owner of Willow Haven was Elizabeth Patricia Mooney. Around the time the Lease commenced, Mrs. Mooney was moving into a retirement home. Mrs. Mooney passed away in March 2021 and her three children, John Mooney, Ian Mooney and Kerrie Lumsden became the registered proprietors of Willow Haven. John Mooney, Ian Mooney and Kerrie Lumsden are the respondents to the application.

5. Prior to becoming involved with Willow Haven, Mr Bourne had had previous experience with leasing farming properties and operating farming or grazing businesses upon them. He had been looking for a property to purchase and in the course of that endeavour, he came to know John Mooney who was the principal of a real estate firm in Wagga Wagga. Mr. Mooney’s firm had listed several properties which the applicant had considered. Mr. Mooney then approached the applicant about leasing Willow Haven from Mr. Mooney’s mother as she was moving into a retirement home and a then existing lease over Willow Haven was ending.

6. As mentioned above, on 1 February 2018, Mr. Bourne entered into the Lease with Elizabeth Mooney.

7. The Lease was in evidence before the Tribunal. Material terms of the Lease which should be noted for the purposes of this application are as follows: clause 6.3 of the annexure to the Lease, which afforded Mr. Bourne an opportunity to renew the Lease for a further three years from the termination of the Lease, on identical terms to those contained in the Lease, save for the market rent to be re-determined by a licensed valuer at that time and some other limited amendments to the terms of the Lease. Clause 11 of the annexure to the Lease provided Mr. Bourne with a “first right to purchase” Willow Haven, at the same price and subject to the same conditions as the lessor proposed to sell Willow Haven to any other person. Clause 10 of the annexure to the Lease permitted Mr. Bourne to carry out capital improvements to the house on the property after receiving written confirmation of agreement from the lessor. Any such capital costs were to be refunded to the lessee on termination of the Lease, if the whole of the property were not purchased by the lessee.

8. During the term of the Lease, Mr. Bourne had frequent contact with Mr. J. Mooney, through email transmissions, text messages or meeting face to face, at least once every two months, at a coffee house or café known as Cache, situated in Wagga Wagga in the same street as Mr. J. Mooney’s real estate office.

9. In his statutory declaration declared on 2 December 2021, which was in evidence before the Tribunal, Mr. Bourne declared:

“From the start of the lease John [Mooney] made it clear that any improvements I made to the property during the lease could be reimbursed to me if the property sold and I did not purchase the property. John would often say words to the effect of “make sure you keep the receipts for the work so you can be reimbursed.” I never doubted John’s assurances.

Before I engaged any contractor or purchased anything for the property, I would always seek written or verbal consent from John. John’s consent was mainly provided at our frequent meetings at Cache Café or in telephone conversations.”

10. In his statutory declaration, Mr. Bourne details a number of “improvements” he says that he made to the house on the property and to the property more generally, during the term of the Lease. The “improvements” to the house on the property come to a total of $14,329.50. These improvements relate to electrical and air-conditioning works, oven and hot water services, cleaning of water tanks, a mobile reception tower and carpets and vinyl flooring. The “improvements” to the property, not involving the house on the property, and their respective values, comprise works in relation to a shearing shed ($3,866.60), works in relation to drilling for water and installation of a water tank and irrigation works ($56,342.55) and works in relation to livestock containment lots ($100,076.48). The total of the “improvements” claimed by Mr. Bourne is $184,333.63.

11. In March 2021, soon after Mrs. Mooney had passed away, Mr. J. Mooney told Mr. Bourne that Willow Haven would be sold. Mr. Bourne considered his right under the Lease to purchase Willow Haven pursuant to clause 11 of annexure A of the Lease but he wasn’t in a position to exercise that right.

12. In April 2021, Mr. Bourne became aware of an advertisement to sell Willow Haven. The advertisement, which is in evidence before the Tribunal, identifies production and farming infrastructure on Willow Haven which included certain “improvements” made to the property by Mr. Bourne including the “recently drilled bore” and the “1 x 100,000 litre stock water tank connected to small feed lot style pens” and “improvements” to the house on the property in the form of air-conditioning units. Mr. J. Mooney is identified in the advertisement as the contact for appointments to inspect the property.

13. It appears that on 15 April 2021, Mr. Bourne, through his solicitors, made some inquiries about the prospective sale at auction of the house and also made a claim for “improvements.” On 28 April 2021, the solicitors for the respondents answered the questions about the sale, stated that Mr. Bourne would be compensated in the amount of $14,329.50 for works to the house on the property, if Mr. Bourne did not purchase Willow Haven, and requested particulars for the other claims for re-imbursement.

14. On 14 May 2021, Willow Haven was sold at auction, with settlement due in six months.

15. On 14 July 2021, Mr. Bourne emailed Mr. J. Mooney with a spreadsheet setting out his “improvements” expenditures.

16. On 11 November 2021, the application was filed in the Tribunal. On 18 November 2021, the sale of Willow Haven was completed. Mr. Bourne remained the tenant after the sale of the property, having renewed the Lease.

The hearing

17. Soon after the hearing began, Mr. Tierney, counsel for the applicant, informed the Tribunal that of the applicant’s total claim for $184,333.26, a sum of $10,000.00 had already been paid by the late Mrs. Mooney as a contribution to water drilling works installed by Mr. Bourne on Willow Haven and further, that the only “improvements” in dispute were the applicant’s claims works in relation to drilling for water and installation of the water tank and irrigation works ($56,342.55) and the works in relation to livestock containment lots ($100,076.48) on Willow Haven.

18. The water tank and irrigation works are made up of three components: drilling works ($44,486.20), a 110,000 litre water tank ($10,852.60) and installation of a livestock trough ($942.75). The livestock containment lots works are made up of two sets of construction works ($79,387.00 and $17,850.25), shade cloth ($975.70), steel for the shade cloth ($1,111.03) and labour ($752.50).

19. Mr. Fox, solicitor for the respondents, acknowledged on behalf of the respondents, that $28,767.35 was owed by the respondents to the applicant.

a) the applicant’s evidence

20. Mr. Bourne, gave evidence in chief by way of statutory declarations dated 2 December 2021 and 21 April 2022.

21. In his evidence in chief, Mr. Bourne, gave the evidence quoted above in paragraph 9.

22. More specifically with respect to the works which are in dispute in this application, Mr. Bourne gave evidence that in March 2019, he engaged a contractor to install troughs for livestock on Willow Haven, as a recently-installed boundary fence had cut-off access to a dam which had previously provided water for livestock on Willow Haven. Mr. Bourne said that he received “verbal consent” from both Mr. I. Mooney and Mr. J. Mooney for the purchase and installation of these livestock troughs. The invoice from the third-party contractor was paid by Mr. Bourne and was annexed to one of his statutory declarations.

23. As to the installation of the 110,000 litre water tank, Mr. Bourne said that Ian Mooney selected the location for the water tank, carried out levelling and carting of gravel works with respect to the water tank installation, that Mr. I. Mooney was paid for the work he carried out and that Elphicks Earthmoving was engaged to prepare and level the site on 13 November 2019. The invoices issued by Elphicks and Mr. I. Mooney for his labour were paid by Mr. Bourne and are in evidence. Mr. Bourne said that the work relating to the water tank “was approved and discussed with John [Mooney].”

24. As to the feedlots, in early 2019, Mr. Bourne had discussions with Ian and John Mooney about their design and installation location, the water tank related thereto, shade cloth for the livestock as well as grain feeders. Mr. I. Mooney chose the location and design for the feedlots, he created the design for the shade cloth and steel structure design for the containment lots and was paid for that work. Mr. J. Mooney was overseas at the time this work was performed. While Mr. I. Mooney and Mr. Bourne were discussing the feedlot installation, Mr. J. Mooney telephoned. The proposed work was discussed and Mr. J. Mooney “provided his verbal consent for the work.” Mr. J. Mooney telephoned Mr. Bourne himself moments later and advised that the work was approved on the basis that the feedlot was for sheep but not cattle.

25. In November and December 2019, Mr. Bourne engaged three different contractors in relation to the feedlots, one contractor to supply shade cloth, one to provide steel and one for construction work and supply and installation of the feedlots. These invoices were paid by Mr. Bourne and were in evidence.

26. In February 2020, drought was affecting Mr. Bourne’s farming operations at Willow Haven and water from the main supply dam that was feeding the containment lot was very close to empty. Mr. Bourne had discussions with Mr. I. Mooney and Mr. J. Mooney about having a bore drilled on Willow Haven. Mr. I. Mooney advised Mr. Bourne to drill for ground water so as to establish a permanent supply during the drought. Mr. J. Mooney “approved the works”. On this occasion, because he was under financial pressure from the drought, Mr. Bourne asked Mr. J. Mooney whether Mrs. Mooney would make a contribution towards the water drilling, rather than for Mr. Bourne to be refunded for the work later. Three holes were drilled in February and March 2020 and water was found under Willow Haven upon the third hole drilled. The drilling contractor issued Mr. Bourne with an invoice for $27,016.00 for the first two holes drilled and an invoice for $47,470.20 for the third hole drilled but also other works including supply of certain PVC casings, cement and bore development works. In June 2020, Mr. Bourne issued an invoice to Mrs. Mooney for a $10,000.00 contribution towards the drilling. It was apparent from the opening given by counsel for the applicant at the hearing of this application, that the $10,000.00 was paid.

27. Mr. Bourne’s evidence included evidence about other improvements made to the house on the property and the property itself, and the invoices he incurred in relation to those “improvements”, which were annexed to his statutory declarations. As these matters are no longer in dispute, I do not set out details of them here.

28. A draft contract for the sale of Willow Haven was annexed to one of Mr. Bourne’s statutory declarations, which appeared to identify in a schedule of improvements that was part of the contract, some of the “improvements” which the applicant had made to Willow Haven.

29. Another feature of Mr. Bourne’s evidence was that he gave evidence of a number of occasions where he asked Mr. J. Mooney to “sign off” on the expenditures which Mr. Bourne had incurred in relation to Willow Haven.

30. First, he stated that in June 2020, he sent an email transmission to Mr. J. Mooney with “a list of improvements that had been agreed to and their values and a request that we both sign off on that …”. Secondly, he stated that later in June 2020 or July 2020, at another meeting with Mr. J. Mooney at Cache Café, he handed Mr. J. Mooney a copy of a spreadsheet with the list of improvements and asked him to sign it. Mr. J. Mooney said that he still needed to talk to his siblings about the matter. Thirdly, Mr. Bourne stated that on 11 September 2020, he sent a text message to Mr. J. Mooney requesting that he “sign off on the expenditure schedule.” Mr. Bourne received no response to that message. Fourthly, on 14 January 2021, Mr. Bourne said that he again requested Mr. J. Mooney to sign-off on the expenditure schedule. Mr. J. Mooney would not sign the document “but gave me the verbal assurance that I would be reimbursed for the work. He said words to the effect of ‘Documents like these don’t mean much to people like us that have relationships as strong as ours. As I’ve said before, if you don’t buy the property, keep your receipts, all monies will be refunded, you have my word’.”

31. The cross-examination of Mr. Bourne by Mr. Fox was concise. Mr. Fox was able to have Mr. Bourne agree that he never received any written consent from Mr. Mooney for any of the “improvements” claimed by Mr. Fox. Mr. Fox was also able to have Mr. Bourne agree that it would have been prudent for him, as a business man, to have obtained consent in writing for the improvements.

32. There was no cross-examination on behalf of the respondents to suggest that Mr. Bourne’s evidence, quoted above at paragraph 9 in these reasons, was false or inaccurate or should otherwise be disbelieved by the Tribunal. There was no cross-examination on behalf of the respondents to suggest that Mr. Bourne’s evidence, where he said that consent had specifically been given by Mr. J. Mooney to the expenditures that were the subject of the hearing (drilling for water and installation of a water tank and irrigation works and works in relation to livestock containment lots on Willow Haven), was false or inaccurate or should otherwise be disbelieved by the Tribunal.

33. Later in the day during the course of the hearing, the Tribunal drew the attention of the respondents’ legal representative to certain paragraphs in Mr. Bourne’s principal statutory declaration (including Mr. Bourne’s evidence quoted above at paragraph 9 in these reasons) and invited the respondents’ legal representative to re-consider whether he wanted to apply for leave for further cross-examination of Mr. Bourne, noting that Mr. Bourne was present for the duration of the hearing and was due to give evidence in reply later that day. The respondents’ legal representative informed the Tribunal that he did not want to ask Mr. Bourne further questions about the paragraphs to which his attention had been drawn by the Tribunal.

34. After Mr. Bourne’s evidence, the hearing continued with the applicant next relying upon the evidence of Vera Bourne, Mr. Bourne’s wife. Mrs. Bourne had made a statutory declaration on 17 February 2022. Mrs. Bourne gave evidence of meeting with Mr. Bourne and Mr. J. Mooney at the Melba Bakehouse, previously known as the Cache Café, in early February 2021. Mrs. Bourne gave evidence that during the meeting there were discussions about the passing of Mrs. Mooney, the challenges of raising children and their return to school after the school holidays and what Mr. Bourne’s intentions were with respect to Willow Haven. Mrs. Bourne gave evidence that the meeting was concluded with Mr. Bourne mentioning the “outstanding expense reimbursement to which Mr. J. Mooney “assured us ‘you have my word; we will look after you’ and a request to send copies of the invoices we paid in relation to the infrastructure improvements to his email address.”

35. Mrs. Bourne was cross-examined by the respondent’s solicitor. The cross-examination established that that was the only meeting attended by Mrs. Bourne with Mr. J. Mooney and Mr. Bourne, that Mr. Bourne was struggling financially at the time and put forward a proposal about taking a sub-lease of a reduced area of Willow Haven, and that there were no written documents by which any of the respondents gave consent to the works on Willow Haven for which Mr. Bourne had paid. There was no cross-examination challenging the evidence that the meeting was concluded with Mr. Bourne mentioning the “outstanding expense reimbursement” to which Mr. J. Mooney “assured us ‘you have my word; we will look after you’ and a request to send copies of the invoices we paid in relation to the infrastructure improvements to his email address.”

b) the respondent’s evidence

36. At the commencement of the respondents’ case, the respondents’ representative sought to tender a document, dated 4 February 2022 and received by the Tribunal’s Registry on 8 February 2022 as “submissions”. Counsel for the applicant objected to the document as a compilation or curation. The solicitor for the respondents said that the document was in the form which the Tribunal had accepted as evidence in other cases which he had been in and that procedural fairness meant that the Tribunal should accept the document as evidence.

37. The document was on the letterhead of the respondents’ solicitors. It included a section indicating where there were disputes with the applicant’s evidence. It then included a section headed “Respondents Position” and consisted of a number of pages of text, much of which was mainly in the nature of submissions but also featured some assertions of facts. It was then signed on the last page by the respondents’ solicitor. Subscribed under that signature was the signature of each of the three respondents.

36. The Tribunal decided not to accept the document as evidence but marked it as MFI 1. The Tribunal is of course not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice. Further, the Tribunal can act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms: Civil and Administrative Tribunal Act 2013 s. 38(2) and (4). But as the Tribunal pointed out to Mr. Fox during the hearing of the objection to the document, the document sought to be tendered was troubling to the Tribunal because on the very face of the document, there was a risk that the respondents were not giving their independent recollection of events or conversations. In one important conversation, Mr. Bourne says that he sought consent from Mr. J Mooney in a telephone conversation, in the house of Mr. Mooney and in circumstances where it appears Mr. I. Mooney must have been in close proximity to Mr. Bourne. There is risk that the respondents were influenced by discussions with each other or their solicitor. It was also not possible to tell who had contributed to the different parts of the document. I did not consider that accepting the document as evidence would facilitate the just resolution of the real issues in the proceedings (see Civil and Administrative Tribunal Act 2013 s. 36(1)) as I could place no confidence in the probative value of the document. Nor did I consider that I would be acting according to equity, good conscience and the substantial merits of the case if I were to accept the document as evidence.

37. As to the experience of the respondents’ solicitor in other cases before the Tribunal, it is unremarkable that the practice and procedure of the Tribunal may differ from case to case as the practice and procedure which the Tribunal may adopt is flexible and may be tailored to the circumstances of each case. In this case, when the Tribunal made orders at a directions hearing on 13 December 2021 for the service of evidence, the Tribunal expressly ordered “All evidence from a party’s witness(es) in support of that party(ies) must be in the form of a statement, statutory declaration, affidavit or expert report as appropriate.” Further this is a case where leave was granted to both parties to be legally represented at that same directions hearing.

38. As to the respondents’ submission about a potential lack of procedural fairness to the respondents if the document were not accepted into evidence, the premise of that submission is questionable as the Tribunal at the directions hearing on 13 December 2021 had plainly given both parties the opportunity to provide evidence at the hearing, had outlined the form of the evidence to be served and both parties were legally represented from 13 December 2021. In any event, I was prepared to allow the respondents the opportunity to adduce evidence orally at the hearing and I also explored with the respondents’ solicitor whether or not he might make an application to adjourn the balance of the hearing. The course decided upon by the respondents was to adduce evidence orally.

39. The first witness called by the respondents was Mr. I. Mooney. In the course of his evidence, he said that he had never given consent to the applicant to instal the livestock containment lots or the waterworks which are the subject of the application. He also said that he had never heard either Mr. J. Mooney or Ms. Lumsden giving their consent to the applicant to instal the livestock containment lots or the waterworks which are the subject of the application.

40. Mr. I. Mooney was cross-examined by the applicant’s counsel. He agreed that he lived on a small acreage in the middle of Willow Haven. He was asked about MFI 1. He said that all the four signatories of MFI 1 were present in the same room at the same time when it was signed and that the respondents’ solicitor was asking them questions. He was challenged on his evidence that the respondents did not consent to the works the applicant did on Willow Haven which are the subject of the application. He was asked a number of questions about his knowledge and his own involvement in installing the livestock containment lots which are the subject of the application. The substance of his evidence was that he knew nothing about the livestock containment lots until they were going ahead but that once the work started he did assist with parts of those works. He was asked about the water drilling on Willow Haven. He accepted that he was consulted by the applicant about what should be done to try to secure for Willow Haven better access to water, including whether to lay out lines to bring in water or drill for water. He was aware his mother had agreed to provide $10,000.00 to help the applicant to pay for the drilling costs. He accepted that there were three attempts to drill for water and he that he became aware of the three attempts but he denied that he had any discussions with the applicant before the second and third drillings for water.

41. Ms. Lumsden was going to be called next to give evidence but Mr. Fox, having further considered the matter, advised that she would not be called.

42. Mr. J. Mooney was the next witness called in the respondents’ case. In the course of his evidence, he said that during negotiations with the applicant over the Lease, he was acting purely on behalf of his mother rather than as a real estate agent. He said that over the course of the Lease he had many conversations with the applicant “in general” about the farm at Willow Haven. He said that over the years, there were many text messages and emails between himself and the applicant.

43. He denied that he ever consented to the applicant installing the livestock containment lots or the waterworks which are the subject of the application. He denied that he had agreed at any time to reimburse the applicant for the livestock containment lots and he did not agree to reimburse the applicant for the waterworks, apart from the $10,000.00 from his mother. He said that Mr. Bourne said to him that he was going to drill a third time to find water because he was desperate and the only contribution was going to be the $10,000.00 from his mother. He denied that he ever consented to the erection of the feedlots by the applicant. He said that early on during the course of the Lease, Mr. Bourne had told him that he would like to do work on Willow Haven, if he were to buy Willow Haven. Mr. Mooney said that the only compensation would be for works in relation to the house on Willow Haven and Mr. Mooney said to look at the Lease. He was then asked whether that was in accordance with the clause in the Lease which dealt with improvements to the house on Willow Haven and he agreed with that suggestion. He further agreed that at a later date, he had agreed to reimburse Mr. Bourne $10,000.00 towards the cost of the waterworks.

44. Mr. J. Mooney was then cross-examined. He agreed that he had had many conversations with the applicant to discuss Willow Haven and pointed to an occasion where Mr. Bourne’s wife also attended a meeting at a time when Mr. Bourne “was struggling”. He agreed that he didn’t remember everything that was said about Willow Haven during his conversations with Mr. Bourne.

45. He was asked to confirm his evidence in chief that he had no knowledge of the livestock containment lots works until the work started. He confirmed that evidence. He was then shown an email dated 23 September 2019 where Mr. Bourne had proposed setting up lots to counter the effects of drought. Mr. Mooney couldn’t confirm or deny that he had received the email. He was asked whether he knew that during drought conditions stock was taken off paddocks and put in containment lots. Mr. Mooney said that he left farming in 1990. He was then pressed about that answer and he accepted that he understood the concept in general. He was also asked specifically whether in September 2019, he knew how a confinement lot worked to take stock off paddocks during drought conditions. His answer was “if that’s what people say, yes.” Mr. Mooney was asked whether he knew his brother Ian was assisting Mr. Bourne with the installation of the confinement lots. He said he did “but after” the work started. He stated that he didn’t catch-up regularly with his brother.

46. He was asked whether he had visited Willow Haven over the last five years. He said not after his mother died. It was then put to him that when his mother was alive he was regularly visiting her and he agreed to that. It was put to him that at times in his dealings with Mr. Bourne he was the eldest son acting in his mother’s interest. His answer was “after discussing matters with her.” It was then put to Mr. Mooney that what he did with Mr. Bourne in regards to Willow Haven was done with the authority of his mother and Mr. Mooney answered “true” to that question.

47. There were then questions whether Mr. Mooney was holding himself out as real estate agent, when issuing invoices for rent under the Lease to Mr. Bourne.

48. Dealing then with the waterworks installed by Mr. Bourne on Willow Haven, Mr. Mooney accepted that his mother knew the drilling for water was going to go ahead, but with her contribution to be limited to $10,000.00. It was put to him that his mother’s contribution was going to be made on this occasion because Mr. Bourne was having difficulties coping with the drought. Mr. Mooney denied that Mr. Bourne ever said that. He was then shown text messages from Mr. Bourne where he said after some failures with the water drilling, he was going to try once more. Mr. Mooney said that Mr. Bourne informed him that after three failures, he was going to try once more “off his own bat”. Mr. Mooney was asked whether his solicitor had told him that text messages had been provided to his solicitor about the water drilling failures and would be presented to him. He agreed and that the messages had been emailed to him. It was put to him that there weren’t three failures but two failures before the third drilling was successful in reaching water. He was directly challenged on his evidence that Mr. Bourne had told Mr. Mooney that he (Mr. Bourne) said he would do the third drilling “at his own expense”. It was put to him that the evidence was false. The answer was “You can put it to me if you want to.”

49. It was then put to Mr. Mooney that his evidence that Mr. Bourne would do the third drilling for water at his own expense was very important to Mr. Mooney’s case. He accepted that it was. It was put to him that he hadn’t told his solicitor about it. Mr. Mooney replied “it was between Courtney Bourne and me.” He was then asked about a sentence in MFI 1 and was questioned where in that document was it stated that Mr. Bourne said he would do the third drilling at his own expense. Mr. Mooney replied “it was just a conversation with Mr. Bourne.”

50. Mr. Bourne was then shown text messages between himself and Mr. Bourne. One of the text messages concerned Mr. Bourne’s drilling attempt in “a second location tomorrow.” Mr. Mooney responded asking “where are you going to try.” There were a series of questions about the text messages and it was put to Mr. Mooney that he knew about the second drilling attempt. Mr. Mooney responded by saying he only knew about the first drilling attempt. It was put to Mr. Mooney that he approved the second drilling attempt. Mr. Mooney responded “If you say so.” Mr. Mooney was then shown a text message where he said to Mr. Bourne “So sorry it hasn’t worked out.” He was next questioned about having further discussions with Mr. Bourne about then drilling for a third time. Mr. Mooney said there weren’t discussions, but rather, Mr. Bourne told him that he was going to try and drill one more time. The evidence showed that the third drilling attempt succeeded in identifying water on Willow Haven and that Mr. Mooney was happy that water had been found. Mr. Mooney responded by saying that he was happy “on behalf of Mr. Bourne.” It was put to Mr. Mooney that the discovery of water assisted Willow Haven by drought proofing the property. Mr. Mooney agreed.

51. The questions then turned to the topic of the 110,000 litre water tank installed by Mr. Bourne on Willow Haven. Mr. Mooney said that he knew Mr. Bourne had put it on the property. Mr. Mooney denied that the water tank enhanced Willow Haven by putting additional water supply infrastructure on Willow Haven. He was questioned about why, if that was so, the water tank had been included in the contract for the sale of Willow Haven. Mr. Mooney denied that the water tank was included in the contract of sale, suggesting that it was included in the draft contract for sale but not the final version. It was put to Mr. Mooney that the water tank was a fixture on Willow Haven, was constructed on site and was in the original position Mr. Bourne had placed it. Mr. Mooney agreed with those questions, or at least, that was what he had been informed.

52. The questions then dealt with the topic of the feedlots. It was put to Mr. Mooney that he specifically consented to the feedlot works going ahead, in a conversation with Mr. Bourne subject to certain provisos (for example, they were to be for sheep and not cattle). Mr. Mooney’s response was “At his expense, yes.” It was then put that to Mr. Mooney that that happened before the feedlot works were done. Mr. Mooney’s response was “I can’t confirm or deny that.” Counsel for the applicant said that when Mr. Mooney consented to the feedlot works, he did not say “provided it was at your [Mr. Bourne’s’ expense.” Mr. Mooney said “No, it was definitely at his expense.”

53. There was re-examination by Mr. Fox. Mr. Fox put some questions about the invoices sent from Mr. Mooney’s office and Mr. Mooney said although they were sent from his office, they were not on the letterhead of the real estate agency and were not official correspondence, but rather, were sent on behalf of Mr. Mooney’s mother. Mr. Fox also put questions about the second and third water drillings and had Mr. Mooney confirm that he believed Mr. Bourne was doing those drillings “at his [Mr. Bourne’s] expense.” In response to other questions, Mr. Mooney confirmed that the final contract for sale of Willow Haven did not include the water tank. Mr. Mooney said that he in fact informed Mr. Bourne that he could remove the water tank and the feedlots from Willow Haven prior to the sale of Willow Haven.

54. The applicant sought leave to cross-examine about the answers given in cross-examination where Mr. Mooney said that he in fact informed Mr. Bourne that he could remove the water tank and the feedlots from Willow Haven. The leave was granted for further short cross-examination limited to that topic, as it had not been raised squarely in the respondents’ evidence in chief.

55. In the cross-examination that followed, it was put to Mr. Mooney that in making such an offer, Mr. Mooney knew that the respondents had a liability to pay compensation for the relevant works on Willow Haven. Mr. Mooney denied that. It was also put that removal of the water tank would weaken the value of Willow Haven to a prospective buyer. Mr. Mooney denied that. It was put to Mr. Mooney that his answer was a nonsense. He rejected that. Mr. Mooney said that Mr. Bourne said that he reserved the right to remove works he had installed on Willow Haven. It was put to Mr. Mooney that that suggestion was entirely different from other evidence he had given. He rejected that suggestion.

56. There was no further evidence in the respondents’ case.

57. In giving evidence in reply, Mr. Bourne denied that he had ever agreed to do the feedlot works on Willow Haven “at his own expense” and said that the only condition which Mr. Mooney had imposed was that the feedlots not be for cattle but only for sheep.

58. In cross-examination, Mr. Bourne agreed with the question by the respondents’ solicitor that prior to the auction of Willow Haven, Mr. Bourne could remove the water tank and the feedlots. It was put to him that he was aware that the respondents were prepared to sell Willow Haven without the water tank and the feedlots. Mr. Bourne said that he couldn’t take up that option as the works were permanent infrastructure and added that he was still leasing Willow Haven.

59. The applicant then tendered the email chain between Mr. Bourne and Mr. J. Mooney between 6 September 2019 and 23 September 2019 and the text messages sent between the two in February 2020.

Disposition

62. In short summary, the applicant’s case is that he is entitled to compensation under s. 6 of the Act for the improvements which are still in issue between the parties, being the works in relation to drilling for water and installation of the water tank and irrigation works ($56,342.55) and the works in relation to livestock containment lots ($100,076.48) on Willow Haven. The respondent contends that the applicant is not entitled to compensation under s. 6 of the Act for the “improvements” in dispute, because no “consent” by the owner of Willow Haven was given.

63. The representatives of the parties framed the issue of “consent” as the issue in this case. That was apparent from the applicant’s opening, both parties’ evidence in chief, the way that cross-examination of the respondents’ witnesses was conducted and from both parties’ closing submissions.

64. The applicant bears the onus of proof of establishing his claim for compensation under s. 6 of the Act.

Jurisdiction

65. The Lease involves a “tenancy” as defined in s. 4 of the Act, the applicant is a “tenant” under that same section and given its area, Willow Haven is a “farm” as defined in s. 4 of the Act.

66. But there is a more difficult issue to determine. The jurisdiction under s. 6 of the Act is enlivened when the tenant has carried out an “improvement” on the farm. “Improvement” is defined in s. 4 of the Act to mean “any work or thing carried out on a farm in the course of a tenancy, being a work or thing that would be of value to an incoming tenant, but does not include the repair or replacement of any work or thing on the farm when the tenant first became a tenant, except as provided by this Act.”

67. Counsel for the applicant submitted that “improvement” was not in issue in the case. He made submissions referring to some of the works which are the subject of the application as “improvements” and other submissions which tended to assume that the works which were the subject of the dispute each constituted an “improvement” for the purposes of s. 4 of the Act. The respondents’ legal representative did not directly dispute any of those submissions. The respondents’ legal representative in closing address made no submission about whether or not the drilling for water and installation of the water tank and irrigation works and the works in relation to livestock containment lots on Willow Haven, constituted an “improvement” for the purposes of s. 4 of the Act.

68. Notwithstanding the apparent agreement between the parties that “improvement” is not in issue in this case, it seems to me that before exercising jurisdiction, I need to be satisfied that the works in relation to drilling for water and installation of the water tank and irrigation works and the works in relation to livestock containment lots on Willow Haven, each constituted an “improvement” for the purposes of s. 4 of the Act.

69. As to this matter, there was no direct or express evidence that an “incoming tenant” “would” place value on the works in relation to drilling for water and installation of the water tank and irrigation works and the works in relation to livestock containment lots on Willow Haven.

70. There was evidence about the value of the works to the applicant, the existing tenant of Willow Haven. Mr. Bourne gave evidence that the irrigation troughs installed from March 2019 were required because a new boundary fence had been erected which cut off a dam which previously provided water for livestock. As to the water tank and the livestock feedlots, Mr. Bourne gave evidence that in November 2019, severe drought was evident on Willow Haven, paddocks were bare and dams running empty, suggesting value to the existing tenant in erecting feedlots, so that livestock could be hand fed with water supply from the water tank, the purpose of which was to supply water to the feedlot. When drought set in in February 2020, and water from the main supply dam was close to empty, Mr. Bourne started the process of having a bore drilled on Willow Haven. He did so because, he said, the “alternative was to sell livestock and put the business in jeopardy of survival.” Mr. J. Mooney accepted during cross-examination that the discovery of water during the drilling campaign by Mr. Bourne assisted the drought-proofing of Willow Haven.

65. There was evidence from Mr. Bourne that he had experience in leasing properties and conducting business as a farmer and grazier, prior to becoming the tenant of Willow Haven under the Lease.

66. Despite the absence of direct or express evidence that an “incoming tenant” “would” place value on the works in relation to drilling for water and installation of the water tank and irrigation works and the works in relation to livestock containment lots on Willow Haven, based on the circumstances of this case, and particularly the circumstances I have outlined in the two preceding paragraphs of these reasons, I draw the more probable inference (see Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 5) that the works in relation to drilling for water and installation of the water tank and irrigation works and the works in relation to livestock containment lots on Willow Haven would be of value to an incoming tenant of Willow Haven. I draw the reasonable and definite inference because I am satisfied that as a result of the installation of the water tank and the construction of the livestock containment lots that are the subject of this application, an incoming tenant of Willow Haven, would have an enhanced ability to operate a farming or grazing business on Willow Haven, particularly during drought conditions, such that the works would be of value to that incoming tenant. With respect to the trough installation works, I draw the reasonable and definite inference that an incoming tenant of Willow Haven, would have an enhanced ability to operate a farming or grazing business on Willow Haven, in circumstances where the water supply from the dam which had previously supplied water for livestock was cut-off, such that these works would also be of value to the incoming tenant. With respect to the eventually successful water drilling campaign, I draw the reasonable and definite inference that an incoming tenant of Willow Haven, would have an enhanced ability to operate a farming or grazing business on Willow Haven, particularly during drought conditions, such that the works would be of value to the incoming tenant.

67. I also need to be satisfied that the application was made by the applicant tenant within time: s. 20 of the Act. There were no submissions about this issue during the hearing but because I need to be satisfied that I have jurisdiction, I need to consider this issue.

68. There is another decision of the Tribunal which suggests that improvement compensation is not payable until the end of the tenancy where a lease has been renewed: McCann v Coffs Harbour City Council [2015] NSWCATCD 150 at [42] – [45]. I have been unable to find any decision of a court which confirms that view as to the operation of the Act or any decision of the Appeals Panel of this Tribunal which confirms that view. For my own part, and with respect, I do not take the view that improvement compensation is not payable until the end of the tenancy where a lease has been renewed, as there is a well-established principle of law that where there is an option to renew a lease, that right is properly-analysed as a right to call for fresh lease, and when exercised, there is a fresh lease with fresh covenants: Rider v Ford [1923] 1 Ch 541 at 547 per Russell J; Gerraty v McGavin (1914) 18 CLR 152 at 163. In bringing this application on 11 November 2021, the applicant brought his claim under the Act within the time limit provided by s. 20 of the Act.

69. Accordingly, the Tribunal has jurisdiction to determine compensation in this matter (s. 6(4) of the Act) and make the orders referred to in s. 21 of the Act. See also Schedule 4 clause 3(1) to the Civil and Administrative Tribunal Act 2013.

Section 6(1) of the Act: owner

76. As to whether any of the works which are the subject of this application were carried out with the consent of the “owner”, the relevant works were carried out at a time when Elizabeth Mooney was still the “owner” of Willow Haven. There is no evidence of direct communications between her and the applicant about any of the relevant works, apart from the invoice for $10,000.00 sent to Mrs. Mooney in June 2020.

77. The applicant, in the opening put by his counsel, foreshadowed that he would put his case on the basis that Mr. J. Mooney, in his dealings with Mr. Bourne, was at all times acting on behalf of the “owner”. That is, Mr. J. Mooney was the agent acting on behalf of the principal, his mother the “owner” of Willow Haven. The applicant relied on the passage in Wilh. Wilhelmsen Investments Pty Ltd v SSS Holdings Pty Ltd [2019] NSWSCA 32 from [74] and following, per Beazley ACJ, as setting out the principles of law relating to the ostensible authority of an agent. In closing submissions, the applicant relied on the characterisation of Mr. J. Mooney’s dealings with Mr. Bourne, as the dealings of an agent, furnished by his principal with ostensible authority to bind her. I accept that submission.

78. The respondents themselves adduced some evidence that invoices issued for rent due under the Lease were issued by Mr. J. Mooney on behalf of Mrs. Mooney. At no stage did the respondents dispute or cavil with the applicant’s submission that Mrs. Mooney had permitted Mr. J. Mooney to act as her agent in dealings with the applicant, with respect to the improvements in dispute, and made the relevant representation to the applicant that Mr. J. Mooney had authority to grant consent to “improvements” carried out by the applicant on Mrs. Mooney’s Willow Haven farm.

79. As the evidence developed, there was some evidence to suggest that Mr. J. Mooney was not just the ostensible or apparent agent of Mrs. Mooney, but was an agent who had actual authority on behalf of his mother in relation to the “improvements” carried out by the applicant on Willow Haven. As mentioned above, in the cross-examination of Mr. J. Mooney, it was put to him that at times in his dealings with Mr. Bourne he was the eldest son acting in his mother’s interest. His answer was “after discussing matters with her.” It was then put to Mr. Mooney that what he did with Mr. Bourne in regards to Willow Haven was done with the authority of his mother and Mr. Mooney answered “true” to that question. There was also the evidence that Mr. Bourne had made the request, through Mr. J. Mooney, for Mrs. Mooney to make the $10,000.00 contribution to water drilling, when Mr. Bourne was struggling with the drought in early 2020 and that contribution was in fact later made.

80. I find for the purposes of s. 6(1) of the Act, that Mr. J. Mooney was the agent of the “owner” and was able to give consent on behalf of the owner to any improvement carried out by the applicant on Willow Haven.

81. As to the form of the consent which is needed for the purposes of s.6(1) of the Act, Mr. Fox in his cross-examination of both Mr. Bourne and Mrs. Bourne, elicited concessions from them that they had nothing in writing to support the applicant’s claim that the owner had consented to the improvements which are the subject of this application. In both his closing submissions, and also when eliciting evidence from Mr. J. Mooney, Mr. Fox also drew attention to the clause in the Annexure to the Lease which, in the case of improvements to the house on Willow Haven, required written confirmation of agreement from the owner.

82. Nonetheless, there is nothing in the text of the Act which requires the consent, for the purposes of s. 6(1) of the Act, to be a consent in writing or to take any particular form. Further and notwithstanding s. 3(b) of the Act, there is nothing in the objects of the Act (see s. 3 of the Act) which requires the Tribunal, as a matter of statutory interpretation, to construe “consent” in s. 6(1) of the Act, to require a written consent to a tenant’s “improvements”, or at least, evidence in writing that the consent has been provided.

Section 6(1) of the Act: the factual issue in dispute, was “consent” given?

83. Mr. Fox submitted that just because the improvement works which are the subject of this application were undertaken – and both parties accept that the works were undertaken – does not mean that the respondents gave their consent to the works. That submission is correct but there was specific evidence in this case that consent was given.

84. Mr. Bourne gave clear evidence that verbal consent had been provided to him by Mr. J. Mooney, for the works which are the subject of the application: see paragraphs 10, 14 and 19 in Mr. Bourne’s first statutory declaration.

85. I found Mr. Bourne to be a credible witness. I was impressed by Mr. Bourne’s demeanour when he gave evidence that he was a credible witness.

86. Although the respondents did seek to undermine the plausibility of Mr. Bourne’s evidence by challenging the lack of any written evidence of consent being given, there was no cross-examination directly challenging Mr. Bourne’s evidence on the question whether consent was given.

87. I do not find anything unreasonable or implausible about Mr. Bourne carrying out the improvements which are the subject of the application without first obtaining some written confirmation from Mr. J. Mooney. It was clear that Mr. Bourne trusted and respected Mr. J. Mooney. Mr. Bourne had dealings with Mr. J. Mooney before entering the Lease, it was Mr. J. Mooney who introduced Mr. Bourne to Willow Haven and the vacant lease. After the Lease was entered, Mr. Bourne had very frequent dealings with Mr. J. Mooney, by text message, by email transmission and at face to face meetings at a café or coffee house near Mr. J. Mooney’s real estate office in Wagga Wagga. The evidence also showed that Mr. Bourne was not afraid to show his vulnerability to Mr. J. Mooney. Mr. Mooney gave evidence that he saw Mr. Bourne “was struggling” during one of their meetings at the café. The content of the text messages and email transmissions which are in evidence also point to, at least, a friendly and open relationship from Mr. Bourne towards Mr. J. Mooney. Indeed, Mr. J. Mooney’s text message to Mr. Bourne “So sorry it hasn’t worked out” after the second drilling attempt to find water failed, points to a close relationship between these two men.

88. Mrs. Bourne’s unchallenged evidence was that Mr. J. Mooney said to Mr. Bourne in her presence, in February 2021, “you have my word, Courtney; we will look after you”, when Mr. Bourne raised with Mr. J. Mooney his claim for reimbursement for the improvements he made on Willow Haven. That evidence from Mrs. Bourne, and the respondents’ failure to challenge it, tends to weaken the submission that the applicant’s case is not plausible or does not discharge his onus of proof, in circumstances where Mr. Bourne failed to obtain any written consent from Mr. J. Mooney to the relevant “improvements”. Here there is clear, unchallenged evidence that Mr. J. Mooney himself was saying to Mr. Bourne that Mr. J. Mooney’s word could be relied upon.

89. In his evidence, Mr. I. Mooney gave a broad denial that he had ever consented to Mr. Bourne carrying out the works that are the subject of this application and he stated that he had never heard his brother John consenting to the improvements in dispute. There is a point where there is a potential conflict between Mr. Bourne’s evidence and Mr. I. Mooney’s evidence: that is, in regards to the feedlot works. Mr. Bourne’s evidence suggested that Mr. Bourne was sitting in Ian Mooney’s house discussing the proposed feedlot works when Ian spoke to John Mooney by telephone. “Moments later” to the call between Ian and John Mooney, John Mooney telephoned Mr. Bourne and John Mooney provided his verbal consent to the work. It is not clear to me that there is in fact a conflict between Mr. Bourne’s evidence in this respect and Mr. I. Mooney’s evidence to the effect that he never heard his brother John giving consent. What John Mooney may have said to Mr. Bourne was said in a telephone call between the two of them. In any event, as John Mooney’s evidence later made it clear, he was asked whether Mr. Bourne could do the feedlot works and he agreed to that, albeit on the condition, he says, that the works would be ‘at Mr. Bourne’s expense.’ Mr. I. Mooney never suggested he heard anything to that effect, so it is likely to be the case that what was said between Mr. J. Mooney and Mr. Bourne, was not overheard by Ian Mooney.

90. As for Mr. J. Mooney’s evidence, where it was in conflict with Mr. Bourne’s evidence, I prefer Mr. Bourne’s evidence. One of the topics that led me to reach my view that I should prefer Mr. Bourne’s evidence where it was in conflict with Mr. J. Mooney’s evidence, is in regards to the livestock containment lot works. When giving evidence in chief, Mr. J. Mooney’s evidence was clear that he did not know about those works until after they started. That evidence was contradicted by Mr. Bourne’s evidence and an email transmission dated 23 September 2019 sent to Mr. J. Mooney. It was also later contradicted by Mr. J. Mooney’s evidence during cross-examination where he suggested that Mr. Bourne had consulted him about installing the livestock containment lot works and Mr. J. Mooney had given approval for those works but on the condition they were at Mr. Bourne’s expense.

91. Another topic that led me to the view that I should prefer Mr. Bourne’s evidence where it was in conflict with Mr. J. Mooney’s evidence, is in regards to the water drilling. It seems to be acknowledged by the respondents that consent was sought by the applicant before the first drilling attempt, and the $10,000 contribution was sought from Mrs. Mooney, but then there is a conflict in regards to the second and third drillings. It is clear from text messages that were in evidence that Mr. Bourne informed Mr. J. Mooney that there would be subsequent drilling attempts. Mr. J. Mooney’s evidence that he had a conversation with Mr. Bourne before the third drilling attempt that the drilling would be at Mr. Bourne’s expense, doesn’t seem plausible in the circumstances then prevailing. Mr. J. Mooney never sent a text message to that effect. No account of that nature was put to Mr. Bourne during cross-examination. The third drilling happened at a time when the evidence showed that Mr. Bourne was struggling financially and that Mr. J. Mooney was sorry that the second drilling attempt had failed. Mr. Mooney accepted that the discovery of water through the drilling campaign was of assistance to Willow Haven. A blunt statement that a further drilling would be at Mr. Bourne’s expense, doesn’t seem to fit well with the other circumstances of the third drilling attempt.

92. Mr. J. Mooney accepted that he had had many conversations and communications with Mr. Bourne over the years and that he couldn’t recall all the details of those communications and the sequence of events. It seems to me that Mr. J. Mooney’s inability to recall details of his communications with Mr. Bourne is the most likely cause of Mr. J. Mooney’s unconvincing evidence where his evidence conflicted with Mr. Bourne’s.

93. I find on the balance of probabilities that Mr. J. Mooney gave verbal consent to the applicant for the works which are the subject of the application: see paragraphs 10, 14 and 19 in Mr. Bourne’s first statutory declaration.

Section 6 of the Act: compensation

94. As mentioned above, the main contest between the parties at the hearing was over the question whether the owner had consented to the improvements which the tenant had carried but there is a potentially difficult issue to determine as to what amount of compensation, if any, is payable pursuant to s. 6 of the Act. Section 6 of the Act is contained within Part 2 of the Act.

95. Counsel for the applicant submitted that quantum is not in issue and that the invoices in evidence all involve work by third parties or Mr. I. Mooney, and are not subject to any challenge. The applicant submitted that once an “improvement” was established, assuming that the owner had consented to the carrying out of the improvement, that there was an “unequivocal right” to compensation under s. 6 of the Act. References were also made to the Tribunal’s “discretion” to award compensation. The Tribunal is not persuaded that the issue is necessarily so simple. The applicant relies on a particular statutory right under s. 6 of the Act to be entitled to an amount of compensation. The case has to fall within s. 6 of the Act and the particular modes set out therein which allow compensation to be determined in an applicant’s favour.

96. The solicitor for the respondent submitted that Mr. Mooney never intended to pay for the improvements carried out by the applicant and that the starting point for analysis in this case is the Lease, which required written confirmation to any improvements to the house on Willow Haven, and that such an approach could also impact on the applicant’s ability to claim compensation for other improvements. But again, a statutory right is in question and Mr. Mooney’s intentions are not determinative in establishing the statutory right under the Act, nor are the terms of the Lease, as agreed initially between the parties thereto, necessarily determinative.

97. This was not a case where there was any evidence before the Tribunal which would allow the Tribunal to set fair compensation by reference to the method of calculation outlined in Division 1 of Part 3 of the Act or more particularly, based on evidence as to what the value of the improvements the subject of this case “to an incoming tenant” (see s. 15(1) of the Act) or to support the calculation required by s. 15(2) of the Act, which takes into account the financial returns that might be expected to a accrue to a (hypothetical) incoming tenant on account of the improvement, if the farm were to be subject to a further tenancy. There was no evidence of any of these matters before the Tribunal.

98. Nor was there any evidence before the Tribunal about the factors specifically mentioned in s. 17 of the Act, namely the “financial resources of the parties” or “the financial returns that might be expected from the improvement”. There were no submissions about what “other factors”, referred to in s. 17 of the Act, were material for the purposes of this case. The phrase “other factors” suggests a potentially wide range of factors may be relevant.

99. It seems to me that for the applicant to succeed in this case, on the evidence now before the Tribunal, he must establish an amount of compensation “fixed by agreement”, for the purposes of s. 6(2) of the Act. If the case does not fall into that category, I do not have evidence that would allow me to determine fair compensation by reference to s. 15 of the Act, if this case does not involve compensation fixed by agreement at a fair amount or fixed at all: see s. 6(3) of the Act. The Tribunal can have regard to “other factors” (s. 17) for the purposes of determining the “fair” compensation.

100. The applicant’s evidence, as mentioned above, was that “from the start of the lease”, Mr. J. Mooney made it clear that any improvements the applicant made to Willow Haven could be reimbursed to him if the property were sold and the applicant did not purchase the property; Mr. J. Mooney would often say words to the effect “make sure you keep the receipts for the work so you can be reimbursed.” That evidence was unchallenged.

101. I find that there was an agreement. In my view, those conversations referred to in the preceding paragraph above amounts to an offer from Mr. J. Mooney, which the applicant could accept by undertaking “improvements”. The applicant did accept the offer by undertaking the improvements described above and the subject of these proceedings. I find that the compensation was fixed by the agreement. The compensation would be fixed by reference to the amounts in the receipts which the applicant retained in relation to each improvement. The compensation was in the nature of money to reimburse the applicant for his expenditure on the improvements. I note in that regard that the applicant in this case has not purported to charge the respondents with any labour costs for his own time and work in relation to the improvements the subject of the application or any margin on top of the work the third-contractors did in relation to the improvements the subject of these proceedings. As to the meaning of the phrase “receipts so you can be reimbursed”, Mr. J. Mooney was, in my view, requiring evidence that the applicant had in fact made expenditures relating to the improvements. I find that by the applicant retaining the invoices relating to the relevant, and in the circumstances where the respondents accept that the work the subject of the invoices was undertaken, the applicant has sufficiently complied with that term of the agreement.

94. As to s. 17 of the Act, and especially the “other factors” phrase used therein, I have considered all the facts and the circumstances which the parties presented in the evidence and I am satisfied that there is nothing which would lead me to conclude that the agreed amount, being the amounts which appear in the invoices in the evidence and to re-imburse the applicant, is an unfair amount. On their face, each of the invoices seems to involve a fair charge for the work the subject of the invoice. Mr. I. Mooney was involved directly in some of the improvements which are the subject of the application. He did not suggest any reason why it would be unfair to reimburse the applicant for any of the improvements with which he was involved. The fact that some of the improvements were mentioned in the advertisement for the auction sale of Willow Haven and the fact that during the drilling campaign, Mr. Bourne gave Mr. J. Mooney some updates on how the campaign was progressing, are some of the other particular factors which lead me to conclude that the compensation sought by the applicant is fair. At no stage when giving evidence did any of the Mooneys suggest that some or all of the improvements involved unnecessary or valueless improvements to Willow Haven or that there were other, cheaper alternatives to the works being carried out on Willow Haven.

95. I will order the respondents to pay compensation in the amount of $174,333.26. If it is the case that the respondents have already paid the $28767.35 which they accepted was payable to the applicant, then the intention of the Tribunal is that that amount should be deducted from the $174,333.26 referred to in the order.

Costs

104. I invited the parties to make any submissions on costs towards the end of the hearing and I heard the parties’ submissions on costs at the conclusion of the hearing. The applicant submitted that costs should follow the event. The applicant has now prevailed. The matter was heard in the Consumer and Commercial Division and involved a claim for an amount over $30,000.00. The applicant has been successful in his claim. The applicant did not conduct his case in a way that created unnecessary costs for the respondents. In my view, the respondents should pay the applicant’s costs as agreed or as assessed and I will make an order to that effect.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 27 June 2022