Clancy & v Salienta Pty Ltd

The appellants, Clancy and another, appealed to the Full Court of the Supreme Court of Western Australia against a decision concerning improvements made to a property known as Yarrawah. The dispute arose from an agreement where the appellants occupied and significantly improved the property under a licence coupled with an option to purchase. The appellants alleged they had acquired an equity in the property due to the circumstances surrounding the proposed purchase and the substantial capital improvements they undertook, seeking either a charge over the property or its conveyance to them.

The Full Court was required to determine whether the appellants were entitled to an equitable interest in Yarrawah, and if so, the nature and extent of that interest. Specifically, the court had to consider whether the appellants' actions and the parties' conduct gave rise to a proprietary estoppel or a *Baumgartner* equity, and how any such equity should be satisfied, whether by a charge or by a transfer of the property, and on what basis the amount of relief should be calculated.

The court reasoned that the appellants had established a *Baumgartner* equity, arising from their expenditure on improvements to the property in circumstances where they reasonably expected to acquire ownership. The court found that the initial licence and option agreement, coupled with the significant capital works undertaken by the appellants, created an unconscionable outcome if they were not compensated for their contributions. However, the court did not find that the appellants had established a proprietary estoppel. The court determined that the appropriate relief was not a conveyance of the property, but rather a charge over the property to secure the amount of the unrecouped expenditure.

The appeal was upheld in part, with the court ordering that the appellants were entitled to a charge over Yarrawah. The appellants were also ordered to pay the respondents' costs of the appeal.