EK Nominees Pty Ltd v Woolworths Ltd - [2006] NSWSC 1172

No judgment structure available for this case.

CITATION: E K Nominees Pty Ltd v Woolworths Ltd [2006] NSWSC 1172
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 28; 29 & 30 November 2005; 1; 2; 5; 6 & 7 December 2005.

JUDGMENT DATE :
16 November 2006

JURISDICTION: Equity Division
Commercial List

JUDGMENT OF: White J

DECISION: Order the parties to bring in short minutes in accordance with the reasons.

CATCHWORDS: TRADE & COMMERCE – Trade practices and related matters – Misleading and deceptive conduct – Plaintiff, a developer, and defendant, an owner of chain of supermarkets, commenced negotiations for agreement for lease with respect to land owned by plaintiff – Proposed agreement for lease provided for construction of supermarket on plaintiff’s land – Plaintiff expended significant moneys in order to obtain development approval and otherwise prepare land for development – Expenditure made in anticipation of formal agreement for lease with defendant – Defendant encouraged plaintiff’s expenditure – Defendant claimed right to recover costs and loss of profits if plaintiff failed to proceed – Defendant reserved right to withdraw from proposed agreement if it were not signed within twelve months of board approval - Third party developer approached defendant with superior development opportunity – Defendant withdrew from negotiations with plaintiff prior to expiry of twelve months period in order to pursue development opportunity with third party – Whether defendant engaged in misleading and deceptive conduct by representing intention to enter into agreement for lease – Whether defendant engaged in misleading and deceptive conduct by representing that there had been no material change to likelihood of its entering into agreement for lease – ss 4(2), 52 and 84 Trade Practices Act 1975 (Cth) considered – Held that defendant engaged in misleading and deceptive conduct – Whether defendant’s misleading and deceptive conduct causative of plaintiff’s decision to expend moneys on development – Whether plaintiff entitled to damages pursuant to s 82 Trade Practices Act – Whether plaintiff derived benefit of residual value by its expenditure on development – Damages awarded – Calculation of damages - ESTOPPEL – Equitable estoppel – Principles of equitable estoppel – Whether plaintiff entitled to equitable compensation for its expenditure on basis of principles of equitable estoppel – Whether defendant’s representation that it would enter into an agreement for lease with the plaintiff was sufficiently clear to found an estoppel – Whether necessary for plaintiff to assume that defendant was not free to withdraw from anticipated legal relationship – Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 considered – Whether proposed agreement for lease was sufficiently defined for an estoppel to operate – Held that defendant estopped from departing from plaintiff’s assumption that defendant would enter into agreement for lease – Held that plaintiff entitled to equitable compensation – Calculation of equitable compensation.

LEGISLATION CITED: Environmental Planning and Assessment Act 1979 (NSW)
Trade Practices Act 1974 (Cth)
Fair Trading Act 1987 (NSW)
Civil Procedure Act 2005 (NSW)
Evidence Act 1995 (NSW)

CASES CITED: Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546
Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31
Kimberley NZI Finance Ltd v Torero Pty Ltd [1989] ATPR (Digest) 53
193
Winterton Constructions Pty Ltd v Hambros Australia Ltd (1992) 39 FCR 97
Warner v Elders Rural Finance (1993) 41 FCR 399
Lam v Ausintel Investments Australia Pty Ltd & Ors (1989) 97 FLR 458
[1990] ATPR 40-990
Tesco Supermarkets Ltd v Nattrass [1972] AC 153
Elajou v Dollarland Holdings plc [1994] 2 All ER 695
The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
Ted Brown Quarries Pty Ltd v General Quarries (Gilston) Pty Ltd (1977) 16 ALR 23
British Westinghouse Electric & Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673
Monroe Schneider Associates (Inc) v No. 1 Raberem Pty Ltd (1991) 33 FCR 1
Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333
Ruthol Pty Ltd v Tricon (Australia) Pty Ltd [2005] NSWCA 443
Makita Pty Ltd v Sprowles (2001) 52 NSWLR 705
Australian Securities and Investments Commission v Rich (2005) 216 ALR 320
Hadid v Australis Media (28 October 1996
Sperling J
unreported)
Connex Group Australia Pty Ltd v Butt [2004] NSWSC 379
Giumelli v Giumelli (1999) 196 CLR 101
Sabemo Pty Ltd v North Sydney Municipal Council [1977] 2 NSWLR 880
British Steel Corp v Cleveland Bridge and Engineering Co Ltd [1984] 1 All ER 504
Dickson Elliott Lonergan Ltd v Plumbing World Ltd [1988] 2 NZLR 608
Brenner v First Artists’ Management Pty Ltd [1993] 2 VR 221
POS Media Online Ltd v Queensland Investment Corp [2001] FCA 809
Sinclair v Rankin (1908) 9 WALR 233
ABB Engineering Construction Pty Ltd v Abigroup Contractors Pty Ltd [2003] NSWSC 665
Australian Securities and Investments Commission v Edwards (2005) 220 ALR 148
Mason and Carter
Restitution Law in Australia
S Christensen “Recovery for Work Performed in Anticipation of Contract: Is Reliance an Element or Benefit?” (1993-1994) 11 Aust Bar Rev
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
A Wyvill “Enrichment
Restitution and the Collapsed Negotiations Cases” (1993-1994) 11 Aust Bar Rev 93
Attorney-General (Hong Kong) v Humpreys Estate Ltd [1987] 1 AC 114
Mobil Oil Australia Ltd v Wellcome International Pty Ltd (1998) 81 FCR 475
Legione v Hately (1983) 152 CLR 406
Ramsden v Dyson (1866) LR 1HL 129
Holiday Inns Inc v Broadhead (1974) 232 EG 951
Plimmer v The Mayor of Wellington (1884) 9 App Cas 699
Commonwealth v Verwayen (1990) 170 CLR 394
Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466
Austotel Pty Ltd v Franklins Self Serve Pty Ltd (1989) 16 NSWLR 582
S & E Promotions Pty Ltd v Tobin Brothers Pty Ltd (1994) 122 ALR 637
Baird Textile Holdings Ltd v Marks & Spencer plc [2001] All ER 352
Evans v James [2001] CP Rep 36
[2000] 42 EG 173
Akiens v Salomon (1993) 65 P&CR 364
Secretary of State for Transport v Christos [2004] 1 P&CR 17
Gillett v Holt [2001] Ch 210
Gonthier v Orange Contract Scaffolding Ltd [2003] EWCA 873
Inwoods v Baker [1965] 2 QB 29
Pacific National (ACT) Ltd v Queensland Rail [2006] FCA 91

PARTIES: E K Nominees Pty Ltd
v
Woolworths Ltd

FILE NUMBER(S): SC 50093/03

COUNSEL: Plaintiff: R Angyal SC & D Jay
Defendant: R McHugh & P W Flynn

SOLICITORS: Plaintiff: Landerer & Co
Defendant: Clayton Utz

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WHITE J

Thursday, 16 November 2006

50093/03 E K Nominees Pty Ltd v Woolworths Ltd

JUDGMENT

CONTENTS

Heading Paragraph No.

Introduction [1]

The Auburn Road Site [5]

Woolworths’ Interest in Auburn [8]

Consensus on Terms [14]

Board Approval [27]

Obtaining Council Approval [30]

Work Continued Whilst Agreement for Lease Discussed [43]

Markham Corporation’s Approach on the Queen Street Site [56]

Progress of the Auburn Road Development [63]

Further Discussions on Queen Street [72]

Further Progress on Auburn Road and Discussions with Markham Corporation [75]

The Woolworths Property Committee Meeting of 7 May 2002 [96]

The Woolworths Property Committee’s Decision [102]

Mr Hunt’s Advice to Mr Marcocci [104]

Decision Not to Proceed with Auburn Road [107]

Mr Hunt’s Credit [115]

No Alternative Development [118]

E K Nominees’ Claim for Damages or Equitable Compensation [119]

Misleading and Deceptive Conduct Claim [120]

Representation that Woolworths Intended to Enter into an Agreement for Lease and Lease of the Auburn Road Site [127]

Representation that Likelihood of Woolworths Entering Into Agreement for Lease had Not Materially Changed [131]

Misleading and Deceptive Conduct by Non-Disclosure [140]

No Change of Intention Prior to 7 May 2002 [143]

Change to Likelihood of Woolworths’ Proceeding with Auburn Road [150]

Causation [157]

Damages for Expenses Incurred from 29 January 2002 [170]

A Question of Evidence [206]

Equitable Compensation for Expenses Incurred from 18 July 2001 [211]

Equitable Estoppel [219]

Clarity of Representation [228]

No Assumption that Woolworths was Obliged to Proceed [231]

Was the Proposed Agreement Sufficiently Defined? [269]

Date From Which Equitable Compensation is Payable [279]

Conclusion in Relation to Estoppel Claim [281]

Quantum of Claim for Equitable Compensation [282]

Conclusion [291]

APPENDIX Page 116

Introduction

1 HIS HONOUR: In these proceedings E K Nominees Pty Ltd claims damages or equitable compensation from Woolworths Ltd. E K Nominees seeks to recoup expenditure it made in obtaining development approval, satisfying conditions of development approval, and preparing a development site, in anticipation of entering into a formal agreement for lease with Woolworths. The agreement for lease would have provided for the construction of a Woolworths supermarket on the site. Woolworths encouraged this expenditure and held out to E K Nominees that an agreement for lease would be entered into. It decided not to enter into the agreement for lease when a better opportunity presented itself.

2 E K Nominees alleges that from 10 January 2002 to 7 May 2002, Woolworths engaged in misleading and deceptive conduct by not disclosing that it no longer intended to enter into a lease of the site, or that the likelihood of its doing so was materially diminished by negotiations for the grant of a lease of a supermarket at a nearby site. It claims damages of $924,653 for expenditure incurred from 10 January 2002 until it ceased work on the site shortly after 7 May 2002, when it learned that Woolworths had entered into such negotiations.

3 E K Nominees also claims that Woolworths is estopped from departing from an assumption which E K Nominees made from 18 July 2001 that Woolworths would enter into the agreement for lease. It claims that Woolworths actively induced it to make that assumption, knew that it was acting to its detriment in reliance on that assumption, and encouraged it to do so. E K Nominees claims equitable compensation in the amount of $1,264,463 for the expenses it incurred from 18 July 2001 in reliance on that assumption.

4 Both claims are for the recovery of expenditure. The second claim covers a longer period. If E K Nominees succeeds on the latter claim, both claims will be satisfied by an award of equitable compensation plus interest.

The Auburn Road Site

5 The site in question is land at 93-105 Auburn Road, Auburn and 5 Beatrice Street, Auburn. The land is owned by E K Nominees. E K Nominees purchased the land at 97-105 Auburn Road in 1985. Until 1990, a retail store known as “Venture” conducted business on the site. That retail store closed in 1990. The building formerly housing the Venture store was used by a casual tenant (or flea market as counsel described it) which paid outgoings. That building was demolished in June or July 2001.

6 The Auburn Road site is irregular in shape. E K Nominees has been attempting to develop it for many years. The zoning permits residential development over retail shops. In 1995, E K Nominees applied for development approval for the construction of a retail, commercial and residential development with two residential towers. However, that application was not proceeded with following a recommendation from Council staff that it be rejected. In 1997, E K Nominees lodged a new application for development consent for the construction of two residential buildings over retail or commercial space. This application was refused in March 1998.

7 The shareholders of E K Nominees are Mr Ervin Katz and Mrs Katz. Since about 1990, Mr Antonio Marcocci has been engaged as a full-time consultant to E K Nominees. Although not a director or employee, all major business decisions for E K Nominees are made by Mr Marcocci and Mr Katz. Mr Katz said that Mr Marcocci was in charge of the day-to-day operations of E K Nominees and had full authority to make decisions on its behalf. Mr Marcocci attempted over several years to interest a major retailer in a lease of the Auburn Road site. He had discussions with Woolworths, Franklins and Coles.

Woolworths’ Interest in Auburn

8 From at least 1995, Woolworths was interested in establishing a supermarket and a Big W discount department store in Auburn. Negotiations took place between Woolworths and the owners of a large site in Queen Street, Auburn, then known as the “RAAD site” (after the name of the then owners). However, there were difficulties from Woolworths’ perspective in establishing both a Big W store and a Woolworths supermarket on the Queen Street site. E K Nominees’ site is not large enough to accommodate a Woolworths Supermarket and a Big W store. The Queen Street site had advantages over the Auburn Road site from Woolworths’ perspective if both a Woolworths supermarket and a Big W store could be built on it. The Queen Street site was closer to the retail centre of Auburn and to Auburn railway station.

9 The major difficulty in the negotiations in relation to the Queen Street site was that neither Woolworths’ architects, nor RAAD’s architects, could create a design for a Big W store that satisfied the Big W division at Woolworths. Big W had standard designs for its stores and was extremely reluctant to enter a site on which a standard design could not be used. The negotiations for Woolworths were conducted by Mr Anthony Isaac. He later became a consultant to E K Nominees. From Mr Isaacs’ perspective, there were also difficulties in the negotiations in that he believed that Auburn Council would be unlikely to consent to a development containing a residential tower, which he believed RAAD proposed to construct above the retail component.

10 In 1998, Woolworths opened negotiations with E K Nominees in relation to the Auburn Road site in case negotiations for the Queen Street site fell through. Mr Katz knew of Woolworths’ interest in the Queen Street site. He sought an assurance from Woolworths that Woolworths’ interest in the Auburn Road site was genuine. On 8 April 1998, Mr Isaac wrote to the relevant executives in Woolworths advising them of his discussions with Mr Katz. Amongst the persons to whom Mr Isaacs’ memorandum was sent was Mr Peter Hunt, who then held the position of National Property Manager at Woolworths. Mr Isaac wrote as follows:

At a meeting held with Ervin last Thursday, he was most anxious to ascertain from us that we are genuine in our efforts in pursuing this opportunity as he felt that in the past the position has changed during negotiation periods for one reason or another.

I advised him that the opportunity on the RAAD site was still probably there, however, with planning difficulties being experienced on the site and the fact that the RAAD Group intended to construct a multi-storey residential tower on top of any retail component, I believe that if his offering could be firmed up it may well be the preferred option at the end of the day.

Ervin has not been able to overcome the difficulty in acquiring one of the properties fronting Auburn Road, however, I am now progressing with him on the basis that we endeavour to pick up the properties on the corner of Harrow Road and Beatrice Street which would enable us to achieve a supermarket of approximately 3,325 m² compared with a store of only 2,500 m² which is dependent upon on him obtaining the other property in Auburn Road.

I would like you (sic) comments in relation to the above as I believe that it is important that we give Ervin some further comfort that we are genuinely pursuing this opportunity albeit that I believe that it would not be unreasonable to put some set date of say six months in this regard.

11 On 15 April 1998, Mr Clayton Rowston, Woolworths’ Property Manager for New South Wales, wrote to Mr Katz. He said:

We understand you still have some concern about our bona fide interest in your site as a location for a Woolworths supermarket.

To reconfirm our discussions with you in your office last month we decided as a matter of courtesy to reassess your site as the result of ongoing long-term delays and planning difficulties associated with the RAAD site together with an additional approach from the owner of an alternative site in the Auburn CBD.

In view of our existing relationship at St. Ives and our discussions held some twelve months ago regarding your site we wish to give you first chance to provide a site for the establishment of a Woolworths supermarket.

We trust that this letter provides some comfort that we are genuinely pursuing your site subject to acceptable development scheme and council approval being achieved by say October 1998.

existing relationship at St. Ives

12 It took much longer than anticipated for E K Nominees and Woolworths to reach an agreement in principle in relation to the provision of a site for the establishment of a Woolworths supermarket. However, Woolworths’ letter of 15 April 1998 is significant for the disclosure of its intentions in its planning for the establishment of a site in Auburn. Woolworths openly discussed its alternatives for the establishment of a Woolworths supermarket in Auburn. This is relevant to what disclosure E K Nominees was entitled to expect when, much later, after years of work and the expenditure of hundreds of thousands of dollars in consultants’ fees and other expenses, Woolworths was again approached by a developer of the Queen Street site.

13 Both E K Nominees and Woolworths were anxious that the property at 107 Auburn Road be acquired so that it could be added to the development. This would help “square up” the site. Mr Marcocci believed that E K Nominees’ chances of interesting Woolworths in the Auburn Road site were largely dependent on whether it could acquire the south-east corner of the site at 107-111 Auburn Road. E K Nominees had previously attempted to buy 107 Auburn Road without success. It bought the properties at 109 and 111 Auburn Road but was unsuccessful in persuading the owner of 107 Auburn Road to sell.

Consensus on Terms

14 In March 1999, Mr Isaac was awaiting a response from the Big W division of Woolworths as to whether it was interested in proceeding with the Queen Street site. Mr Isaac asked Mr Rowston whether, if the Big W division declined the location, Mr Rowston would wish to proceed with the Queen Street site, or if he would prefer E K Nominees’ Auburn Road site. On 11 May 1999, he was advised by Mr Rowston that Woolworths was in a position to move forward with the Auburn Road site should Big W withdraw from the Queen Street site. In mid 1999, Mr Isaac was told by Mr Ralph Kemmler, the National Property Manager of the Big W division of Woolworths, that he would not be proceeding with the Queen Street site because the configuration of the Big W store proposed by the RAAD Group did not satisfy the Big W division’s design criteria.

15 In about mid 1999, Mr Isaac told Mr Marcocci that Big W was not proceeding with the Queen Street site. Either Mr Isaac or Mr Rowston told Mr Marcocci that Woolworths had given up trying to lease the Queen Street site from the RAAD Group because Big W would not agree to the modifications to its standard-design store that would be needed to fit into the site. From about December 1999, for the following twelve months, there was consultation between E K Nominees, Woolworths and their respective architects, with a view to their preparing plans and drawings for a Woolworths supermarket on the Auburn Road site.

16 During this period, attempts were again made to acquire the property at 107 Auburn Road. An offer was made to the owners of 107 Auburn Road to swap the land with one of the properties owned by E K Nominees further south on Auburn Road. Mr Isaac, on behalf of Woolworths, also made an offer to the owners of 107 Auburn Road for Woolworths to purchase the property. None of these approaches was successful. In August 2000, Mr Marcocci told Mr Rowston that he had been unable to acquire the property at 107 Auburn Road. He said “this is the site we can offer you. Take it or leave it.” Mr Rowston said “we’ll see if we can make it work.”

17 In August 2000, Mr Marcocci and the architect retained by E K Nominees, Mr Stephen Gergely, learned that a new Development Control Plan had come into force for business premises in Auburn. The new Development Control Plan provided E K Nominees with the opportunity to combine a Woolworths supermarket as the anchor tenant for a retail precinct at ground level with a further five levels of residential units.

18 During the remainder of 2000, Mr Gergely and his staff worked on a new development application for the site involving two residential towers and a retail development that included a Woolworths supermarket. Detailed discussions took place in relation to the location of the plant room. Extensive work was done on the design to incorporate the Woolworths supermarket into the development. There were discussions between Mr Marcocci and Mr Rowston on terms for a lease of the supermarket.

19 Jebb Holland Dimasi, a firm of economists and property advisers retained by Woolworths, had earlier provided Woolworths with an assessment of the market potential for a Woolworths supermarket on the Queen Street site. On 22 November 2000, they advised Woolworths that the Queen Street site enjoyed better exposure and accessibility than the Auburn Road site and generally would be the slightly preferred option for a supermarket development. However, they advised that either site would be suitable for a new Woolworths supermarket.

20 On 5 December 2000, Woolworths made an offer to take a lease of a supermarket to be constructed on the Auburn Road site. The offer was expressed to be subject to Woolworths board of directors’ approval. Woolworths stated that the offer was based on the plans and latest information provided to it. It stated that in the event of further amendments, re-designs and changes to configuration, it reserved the right to amend the offer. The letter set out the area to be leased, the lease term, the number of options, the gross rental, the commencement date of the lease, outgoings, and other matters. The letter included the following paragraphs:

Design Brief. The Design Brief will be issued with Woolworths Standard Specification Kit (Kit). The lessor is to provide the tenancy in accordance with the obligations contained in the Kit. The transmittal documents accompanying the Kit will be attached to the agreement. The kit is current for a period of six months and will be re-issued if necessary to ensure and up to date Kit is annexed to the agreement.

Programming. The landlord must provide a construction program acceptable to Woolworths for inclusion into the Agreement for Lease.

Scope of Works and Finishes. As part of the agreement, a schedule of finishes and Scope of Works will be required for attachment to the agreed documentation.

…

Consents and Authorities. We recognise that the basis of the offer to grant a lease is subject to a number of conditions.

Could you please identify any legal, infrastructural or commercial matters that require resolution or could impact the delivery of the project.

Woolworths will require an indication of timing for each condition to be satisfied. This will assist in presenting the submission and also the cashflow of capital expenditure.

Documentation and Approvals.

This offer is subject to satisfactory development plans, programming, Scope of Works and finishes.

Further, the terms and conditions outlined are subject to the approval of the Woolworths Board and Execution of Agreements and Lease Documentation satisfactory to our group.

Specific Performance following Board Approval:

The landlord acknowledges that Woolworths agreement to proceed is based on the landlord’s commitment to the project and their development programs. It is acknowledged by the landlord that Woolworths are incurring costs in the negotiation and documentation process and have allocated capital from the State’s budget for the completion of the Supermarket within the nominated period. If the landlord fails to perform in accordance with the agreements and approvals, or markets/sells the property, in whole or in part, then Woolworths approval will be rescinded and a claim for costs and loss of profits will be actioned.

Notwithstanding the above, the landlord may seek and must obtain Woolworths consent to a proposed sale or other dealing with the ownership of the Centre which shall not be unreasonably withheld if the lessor/developer can satisfy Woolworths that the purchaser has the capacity to undertake the development and furthermore, that the landlord guarantees the completion of the Centre and all aspects of the agreement to our satisfaction.

…

Currency of Approvals.

Any approvals granted by the Woolworths Board will be operative for a period of twelve months. If the legal documentation is not executed the tenant can elect to terminate the agreement free of any claim, etc if the landlord cannot satisfy the tenant on the progress of the development.

We trust the above offer is acceptable and upon your confirmation we will proceed with recommending acceptance to the Woolworths Board of Directors.

21 On 25 January 2001, E K Nominees responded to this letter and proposed amendments. On 6 February 2001, Woolworths replied to E K Nominees’ letter of 25 January 2001. Again, its letter was headed “Subject to Woolworths Board of Directors Approval”. Woolworths wrote:

Subject to your approval of final development plans, all terms and conditions contained in your letter are agreed.

Upon receiving copy of final development plans, we will proceed with recommending acceptance to the Woolworths Property Committee which is a delegated authority of the Woolworths Board.

22 It is not suggested that this exchange of correspondence gave rise to a binding agreement for lease. The correspondence was expressly subject to Woolworths board’s approval and to the execution of agreements and lease documentation. Nonetheless, E K Nominees was required to give its “commitment to proceed”. Woolworths’ letter of 5 December 2000 contemplated that some rights and obligations would arise following board approval and prior to the entry into any such agreements and lease documentation. Any approval granted by the Woolworths board was said to be “operative” for a period of twelve months only. That conveyed that the giving of Woolworths board’s approval would have some “operation” but that E K Nominees could not rely upon the continued “operation” of the board approval for longer than twelve months. During that period, E K Nominees could rely on the board approval in committing itself to the project. Woolworths also obtained E K Nominees’ acknowledgment that following board approval, if E K Nominees failed to perform in accordance with the “agreements and approvals”, or sold the property without Woolworths’ consent, then Woolworths’ approval would be rescinded and it could claim its costs and loss of profits. This term appears to have been intended to apply independently of any formal agreement for lease which the parties might enter into.

23 E K Nominees did not suggest that upon board approval being obtained, the correspondence of 5 December 2000, 25 January 2001 and 6 February 2001 gave rise to a binding agreement for lease. Nonetheless, it is clear from this correspondence that Woolworths expected that E K Nominees would “commit” itself to the project even before a binding agreement for lease was entered into. Woolworths also committed itself to the project to some extent once board approval was obtained, but before an agreement for lease was entered into. It reserved the right to “elect to terminate the agreement free of any claim” if E K Nominees could not satisfy it on the progress of the development. The “agreement” it would then be entitled to terminate was apparently an agreement binding in honour.

24 On 14 June 2001, Woolworths sought an amendment of the commercial terms which had been agreed to that point in relation to the calculation of percentage rent. The amendment sought by it was agreed to by E K Nominees.

25 At about this time, Mr Daniel Hargraves, the Regional Manager – Property NSW for Woolworths, who was then handling the project for Woolworths, told Mr Marcocci that “Once we have got board approval, it’s a done deal”. Mr Hargraves did not recall this conversation. I think it is likely that such words were said. From Woolworths’ perspective, the project was a “done deal” if board approval were obtained. Woolworths’ board had delegated the approval for such projects to the Woolworths Property Committee. Neither of the two witnesses who gave evidence for Woolworths, nor Mr Isaac, who had been engaged as a consultant for Woolworths for a number of years, was aware of any case where Woolworths did not proceed with a project after the project was approved by the Property Committee.

26 On 7 February 2001, Woolworths sent Mr Gergely its standard specification kit. This consisted of numerous plans, sections, elevations and specifications. These were to be incorporated in the architect’s design. Mr Gergely met with Auburn Council staff to discuss amended sketches for the development and to discuss traffic and garbage disposal issues. In March 2001, Mr Gergely sent Mr Rowston a preliminary set of drawings for the development. On 4 May 2001, he lodged development application 216/01 with Auburn Council.

Board Approval

27 On 4 July 2001, a submission was made to the Woolworths Property Committee for approval for Woolworths to enter into an agreement to lease and to lease a new supermarket and Woolworths liquor store at the Auburn Road site. The submission records that the Queen Street site had recently been onsold to a specialist residential developer without ever having received development approval. The submission addressed numerous matters in relation to the Auburn Road site, including Woolworths’ investment criteria. It estimated the costs and returns to be derived from the development against Woolworths’ benchmarks. These comprised the anticipated internal rate of return, the return on funds invested, an occupancy cost ratio, sales per square metre of trading area, parking spaces, the average capital cost, and the ratio of trading area to gross lettable area. The proposal passed four of these criteria. It did not pass the benchmarks for occupancy cost ratio, estimated sales per square metre of trading area, or average capital cost. Explanations were provided in respect of each of these matters. The estimated net present value of the Auburn Road store was $781,407. The submission was approved by the Property Committee.

28 By letter dated 18 July 2001, Woolworths advised Mr Marcocci that the submission for a new Woolworths supermarket at Auburn had been approved by the Woolworths Property Committee. Woolworths’ letter stated:

The approval is subject to the following terms and conditions:

Type: agreement to lease and lease.

other terms as agreed in previous correspondence

29 Again, E K Nominees does not suggest that a binding agreement for lease came into existence at this time. It is clear that the parties intended to enter into a separate agreement for lease, even though all of the commercial terms raised to this stage had been resolved, including all essential terms for an agreement for lease.

Obtaining Council Approval

30 On 28 June 2001, Mr Gergely had asked Auburn Council to expedite consideration of the application for development consent. In August 2001, Mr Gergely attended meetings with Council staff to discuss difficulties which the Council staff had identified with E K Nominees’ application for development consent. Consultants had been retained in connection with the development application. These included town planners, heritage consultants, acoustic consultants, hydraulic and fire protection consultants and consulting engineers. Various reports were received from these consultants. On 29 August 2001, Mr Hargraves forwarded details to Mr Gergely of the rubbish bins that the supermarket would use so that that information could be incorporated into a waste management plan for submission to Council. On 30 August 2001, in order to satisfy Auburn Council’s requirements, Mr Gergely forwarded various documents including amended drawings, an amended landscaping plan, an environmental assessment, a report by structural engineers on the excavation, an economic impact report, recommendations for noise treatment, a traffic report, and an assessment of the impact of the development on heritage structures.

31 On 27 September 2001, Mr Hargraves wrote to Mr Marcocci. He said:

As discussed, Woolworths Management is extremely disquieted by the time being taken to finalise the Development Application process and has expressed grave doubts about the future of the development itself.

We therefore seek your assistance in alleviating these concerns as a matter of urgency, else we are instructed to begin inquiries into alternative opportunities outside the Auburn area.

We hope this situation can be resolved expeditiously to eliminate this prospect.

32 At this stage, no draft agreement for lease had been prepared. It is clear from the document later produced that the agreement for lease was to include the agreement for construction of the premises according to plans and specifications for the Woolworths supermarket. These plans were still in the process of being finalised in conjunction with the discussions with Council, as Council approval was needed for them.

33 On 2 October 2001, Landerer & Co, who acted for E K Nominees, forwarded to Woolworths’ solicitors, Corrs Chambers Westgarth, certain of the plans. They asked that Corrs Chambers Westgarth submit draft documents.

34 Although the staff of Auburn Council recommended approval of the development application, there was resistance to it within Council. At a meeting on 7 November 2001, the Council resolved to defer the application to a workshop on 12 November 2001. The workshop was attended by consultants retained by E K Nominees. Mr Gergely was asked whether E K Nominees could assure the Council that Woolworths was committed to the site. After being told of this, Mr Marcocci telephoned Mr Hargraves and asked Mr Hargraves if he could send a letter saying that Woolworths was committed.

35 Mr Hargraves forwarded a letter dated 13 November 2001 to Mr Marcocci. He confirmed that:

We are, subject to the terms of our Agreement, committed to establishing a store in Auburn and are most willing to co-operate in whatever capacity is reasonably required to secure a favourable outcome to the DA

36 Mr Hargraves went on to stress that it was necessary for Woolworths to be allowed to use the loading dock between 10.00 pm and midnight. He concluded by saying:

Tony, whilst we do not wish to create any additional burden for E K Nominees, we are concerned with the length of time the approval process is taking in relation to this development. After our recent experiences in relation to alternate sites, we are extremely concerned about the outcome of this proposal. We require an urgent resolution to this matter else we are instructed to commence investigations into opportunities outside the Auburn area

37 This letter confirmed that Woolworths intended to establish a store at E K Nominees’ site on Auburn Road, but also made it clear that Woolworths did not regard itself as bound to do so if its operational requirements were not met, or if there was too long a delay in obtaining development approval.

38 This letter was sent to Auburn Council on 16 November 2001. On 28 November 2001, the development application was considered by the Council. Both Mr Marcocci and Mr Hargraves spoke at the meeting. There was conflicting evidence as to what Mr Hargraves said. One or more of the councillors was concerned that if development consent were given, Woolworths might close down its store in Berala, which is a nearby suburb. Mr Hargraves’ recollection was that the only thing he said was to assure the Council that Woolworths had no intention of breaching its lease of another store at Berala.

39 Mr Marcocci told the Council in Mr Hargraves’ presence that:

we have worked long and hard to structure a deal with Woolworths supermarket and have been successful in securing them as anchor tenants for the site. …

The Woolworths supermarket will be modern and will offer great facilities for the shoppers of the Auburn CBD. This supermarket will be one of the largest in NSW, much larger than the current offering by the other two supermarkets in Auburn.

The process of this current application has been extensively discussed with council officers over many months. All changes requested by council officers have been addressed and have been incorporated in the present proposal, including the re-design of both residential buildings and the supermarket. Woolworths have been most co-operative and have agreed to these changes.”

40 Mr Marcocci deposed that Mr Hargraves told the meeting that:

Woolworths is committed to E K Nominees’ site. We are keen to get the development going as soon as possible. If we can’t get development consent for E K Nominees’ site, Woolworths will have to look outside Auburn for a site for a supermarket.”

41 Mr Hargraves had no recollection of making the statements attributed to him by Mr Marcocci. However, I accept Mr Marcocci’s evidence that he did so. Mr Hargraves agreed in cross-examination that if he had been asked whether Woolworths was committed to establishing a store at the Auburn Road site, he would have said that Woolworths was so committed and that it was keen to get the development going as soon as possible. The Council wanted that assurance and it is probable that he gave it.

42 On 6 December 2001, Auburn Council approved E K Nominees’ development application. The approval was subject to conditions, some of which (known as the deferred commencement conditions) had to be satisfied before the approval became operative.

Work Continued Whilst Agreement for Lease Discussed

43 On 14 November 2001, Corrs Chambers Westgarth forwarded a draft agreement for lease and lease to Landerer & Co. Corrs Chambers Westgarth sent the draft documents under cover of a letter which stated:

I look forward to discussing the attached drafts with you and confirm that no binding Agreement for Lease or Lease shall come into existence until duly executed counterpart documents are exchanged between the parties.

44 The draft agreement also provided for E K Nominees to carry out the works required to complete the construction of the shopping centre in accordance with the “plans and specifications”. These plans and specifications were to be set out in the schedule to the agreement. Accordingly, all of the requirements for the construction of the shopping centre and all of the terms of the lease had to be settled before the draft agreement for lease could be finalised. However, Woolworths was pressing for the earliest possible opening of the supermarket. Rather than pausing to settle the legal documentation, the parties pressed on with the proposed development.

45 The deferred commencement conditions to the development consent included the submission of a waste management and recycling plan for Auburn Council’s approval, the submission of details of all finished surfaces and building materials, the provision of storm water plans to the Council, the carrying out of an analysis to confirm the contamination status of the site, an analysis of the pedestrian and traffic movement on the corner of Beatrice Street and Harrow Road, the provision of a design for modifications to four roundabouts in the vicinity of the site, and the submission to the Council of planting details and specifications for tree planting along Harrow Road. There were another 117 conditions to be satisfied during the currency of the development approval.

46 Extensive reports were required before the commencement of demolition, excavation or building works.

47 Following the grant of the Council’s approval, instructions were given to various consultants in order to satisfy the Council’s conditions and to carry out the development. A meeting of the consultants had been held on 14 November 2001. Various tasks were identified and responsibility for those tasks allocated. The tasks were divided into the areas of structural work, (including piling and shoring design and excavation), hydraulic work, (including relocating sewers, stormwater design and new sewer and trade waste drainage design), electrical work, mechanical ventilation, architectural work (including the preparation of plans incorporating input from the various consultants and implementing Woolworths’ plans), the work of “developer/builder” (including the acceptance of documentation from various consultants), and the preparation of the preliminary works program, a building method study, a construction program and a bill of quantities.

48 On 11 December 2001, Mr Gergely forwarded to Mr Colston, the acoustic consultant, a set of amended ground and basement plans for his evaluation in accordance with conditions contained in a report forwarded to Council. He was asked to proceed with structural details. On 12 December 2001, Mr Isaac advised all of the consultants that he was convening a meeting of consultants to be held on 19 December 2001.

49 On 13 December 2001, Mr Isaac wrote to Mr Rod Rose of Woolworths, noting that he had been appointed as client representative and development manager for the project with the role of managing the appointed consultants. He asked that Mr Rose forward a revised “Gamma kit” to Gergely & Pinter Pty Ltd, the firm of architects retained by E K Nominees, and gave advice in relation to a person to be appointed by Woolworths as project manager for the project.

50 Mr Isaac’s facsimile was also sent to Mr Hargraves of Woolworths. At about this time, prime responsibility for the project within Woolworths passed from Mr Hargraves to Mr Peter Hunt. In his affidavit, Mr Hargraves said that Mr Hunt assumed responsibility for the region which included Auburn in about late 2001 or early 2002. I accept that evidence. A note dated 14 December 2001 from Mr Hargraves to Mr Hunt stated that “Peter, DA was approved for Auburn. Draft lease has been issued to L’er. Mark Lamb handling. Is probably as good a time as any to hand over”. Mr Hunt stated in his affidavit (paragraph 16) that he assumed responsibility for the Woolworths file in relation to the Auburn Road site in early 2002. In his oral evidence, Mr Hunt said that he did not effectively take over the file until late February or early March 2002. I do not accept that evidence. It is not only inconsistent with Mr Hargraves’ affidavit, and with Mr Hunt’s own affidavit, but it is not corroborated by any contemporaneous document. I find that Mr Hunt assumed responsibility for the E K Nominees development in late December 2001, or early January 2002.

51 On 18 December 2001, Woolworths sent a revised “Gamma kit” to Mr Gergely. This kit contained numerous plans for the Woolworths supermarket, together with a supermarket design brief, construction summary, schedule of finishes, fire protection brief and specifications for air conditioning and mechanical ventilation and electrical work. Mr Gergely was required to incorporate these documents into the design. The supermarket brief included stipulations that E K Nominees pay all statutory fees and obtain all necessary approvals for the work. It stated that Woolworths was required to approve the subcontractors to be used. It stated that the requirements set out in the enclosed documents were minimum acceptable requirements of Woolworths and would form the basis of a full set of co-ordinating working documents to be prepared by E K Nominees at its cost. Detailed requirements were stipulated.

52 On 19 December 2001, a meeting of consultants was held at the offices of Mr Isaac. The consultants present included Gergely & Pinter, a structural engineer, a hydraulic consultant, an electrical consultant, a mechanical ventilation consultant, a geotechnical engineer, a traffic engineer, two representatives of the builder, a consultant on the Building Code of Australia, and a quantity surveyor. Other consultants engaged by E K Nominees who did not attend the meeting included a construction programmer, an acoustical engineer, and a town planner. The meeting was also attended by Mr Phillip Murphy and Mr Jim Kapetangiannis of Woolworths. Mr Kapetangiannis was the technical service manager for the Woolworths property services group. Mr Murphy was Woolworths’ project manager for the project. The minutes of the meeting include the comment that piling and excavation was to start as soon as possible, given commitments made to the Council and end-users. The expression “end-users” was a reference to Woolworths. There were reports and resolutions on numerous aspects of the development.

53 The next meeting of consultants was held on 16 January 2002. It was also attended by Mr Murphy and Mr Kapetangiannis. Again, there was discussion of the various steps that were being undertaken to satisfy the Council’s conditions and to progress the development. Matters which it was noted had been completed from the previous meeting were the provision of Gamma drawings from Woolworths to the architect, the issuing of letters and drawings for Beatrice Street residents in relation to sewer, stormwater and overland flow, the carrying out of contamination and testing work on the site and the obtaining of a contamination report. Matters described as having an “ongoing” status included satisfying the Council’s condition on a waste disposal method, the resolution of heights for the podium, mezzanine slab and car park slabs to allow the accommodation of all services, the preparation by the surveyor of a consolidation plan, the retaining of vibration experts, the obtaining of a road opening permit from the Council, checking with the Council as to whether excavation and shoring drawings had been approved, the preparation by the quantity surveyor of packages, budget estimates for all trades, the re-submission of a traffic report, and commencing design on Woolworths’ air conditioning and ventilation requirements. This is not an exhaustive list.

54 At the meeting of consultants held on 16 January 2002, Mr Kapetangiannis and Mr Murphy agreed to provide all of E K Nominees’ consultants with Woolworths’ new drawings and specifications on compact disc and in hard copy and then to “convene separate services meeting once consultants are up to speed with Woolworths’ latest specification”.

55 On 16 January 2002, Woolworths forwarded to Mr Gergely a new set of plans and specifications.

Markham Corporation’s Approach on the Queen Street Site

56 In the meantime, on 10 January 2002, Mr Hunt received a telephone call from Mr Markham of Markham Corporation Pty Ltd. Markham Corporation describes itself as a property developer and investor. Mr Markham told Mr Hunt that he was the project manager for Holdmark Developers Pty Ltd. He told Mr Hunt that Holdmark Developers had taken an option to purchase the Queen Street site which used to be owned by the Raad Group. He asked if Woolworths and Big W would have an interest in leasing the premises if Holdmark were to purchase and develop the site. Mr Hunt told him:

Yes, we would be interested. However, I have a high degree of scepticism based on the six years or so of negotiations which have already taken place since I joined Woolworths property department, with no result. I also have to say that we are a fair way down the track in negotiations with the owners of the site in Auburn Road. Big W is the critical element. If you can fit them in, we may have something to talk about

57 On 11 January 2002, Mr Markham wrote to Mr Hunt and to Mr Luke Turner, the National Property Manager of the Big W Division of Woolworths. His letter was expressed to be “in confidence”. He advised that Holdmark had taken an option to purchase and was considering a retail/residential development which would include space for a supermarket of 3,462 m², and a department store of 6,249 m², together with residential components and other retail stores. He advised that he was seeking “general written expressions of interest” by 25 January 2002 in relation to pursuing a leasing or sale opportunity for the three major retail tenancies. He said that following expressions of interest, and the purchase of the property by Holdmark, formal negotiations with interested parties would be entered into with a view to finalising an agreement to lease or purchase for each anchor tenancy.

58 Mr Hunt did not disclose this approach to Mr Marcocci or anyone else on behalf of E K Nominees.

59 Mr Hunt gave evidence that he expected that any discussions which might eventuate with Mr Markham would eventually prove to be fruitless having regard to the history of Woolworths’ previous attempts to negotiate the establishment of a Big W store and Woolworths supermarket on the Queen Street site. He said that he nevertheless considered it to be his role to present all opportunities for new Woolworths supermarkets which he considered to be commercially viable to the Woolworths Property Committee for its consideration. He therefore considered that it was his duty to investigate the opportunity raised by Mr Markham, with a view to presenting it to the Woolworths Property Committee for its consideration if it should be feasible. He assumed that Mr Markham would be making similar approaches to other retailers and that, therefore, even if the Queen Street site could accommodate a design which accommodated both a Woolworths supermarket and a Big W store, the prospects of Woolworths being successful in any attempt to become a tenant were uncertain. That would be a decision for the Woolworths Property Committee, not for him. I accept this evidence.

60 Mr Hunt also said that:

At that time, I held no belief that the conversation which I had with Mr Markham had any adverse impact whatsoever on the prospects of Woolworths proceeding with the establishment of a supermarket at the E K site

61 I do not accept this evidence. The Queen Street site was a superior site for a Woolworths supermarket than the Auburn Road site. Unless Mr Hunt believed that Woolworths would regard itself as committed to the development with E K Nominees, it must have been obvious to him that if the proposal that Woolworths take a lease of the Queen Street site proved to be feasible, there was a very real prospect that Woolworths would not proceed with the establishment of a supermarket at the Auburn Road site. When a submission for the Queen Street site was ultimately made to the Woolworths Property Committee in April 2002, it was based on Woolworths not proceeding with the Auburn Road site. Mr Hunt then recommended that the Property Committee approve a proposal that Woolworths enter into an agreement for lease and lease for a new supermarket on the Queen Street site and “seek to exit an Agreement for Lease for premises in Auburn which was approved in July 2001”.

62 Mr Hunt gave evidence that he thought that there was a distinct possibility that the Property Committee would agree to the establishment of two Woolworths supermarkets in Auburn. When asked why he wrote a submission to the Property Committee in April 2002 that there be only one supermarket in Auburn and that it be at the Queen Street site, his answer was “because the Queen Street site is the preferred site in Auburn for all reasons we have been through previously”. In cross-examination (T468), Mr Hunt acknowledged that Queen Street was the preferred site in January 2002. He said that although he believed there was the opportunity for two supermarkets in Auburn, the Queen Street site was the preferred site, potentially at the expense of the Auburn Road site. That was the position in January as much as it was in April.

Progress of the Auburn Road Development

63 On 24 January 2002, Mr Isaac wrote to Mr Kapetangiannis and Mr Murphy. He enclosed a report from Colston Budd, E K Nominees’ traffic engineers. That report set out alternative routes that could be used by semi-trailers accessing the proposed Woolworths loading dock in Harrow Road, Auburn. Mr Colston recommended that Woolworths test the routes with the size of vehicle intended to service the site. Mr Isaac asked Woolworths to provide a vehicle so that the test could be carried out.

64 On 24 January 2002, Mr Gergely forwarded three sheets of section drawings to Mr Kapetangiannis following the latter’s request.

65 On or about 24 January 2002, E K Nominees acquired a property at 5 Beatrice Street, Auburn in order to provide an entrance to the residential component of the development that did not impinge on the space available to the Woolworths supermarket.

66 By 24 January 2002, Gergely & Pinter had prepared a complete package of plans but were awaiting a final “sign off” from Woolworths. There were other aspects of the building which could not be finalised until Woolworths gave its final approval to the ground floor design.

67 On 25 January 2002, Mr Kapetangiannis wrote to Mr Isaac. He advised that:

… the responsible Retail Executive (Operations) has confirmed that due to the lapse of time between now and the last scheme that was submitted to him, a completely new layout is required which captures the changes in our store layout/finish philosophy.

In the meantime, I am having our ‘

’ prepared and should be able to give this to you during the coming week.

Please contact me if you wish to discuss this any further or if there is anything else I can do to help your program stay on track.

68 On the same day, Mr Kapetangiannis wrote to Mr Hunt. He said that one of the issues which Woolworths needed to address for the Auburn development was a waste management plan, especially for the supermarket. He said:

I have been informed that you have some experience and expertise in the preparation of these types of plans. Please discuss with me if you require any further information.

69 He did not receive a response to this memorandum from Mr Hunt. He wrote to Mr Hunt again on 11 February 2002 asking to be advised of the current status of the waste management plan, noting that “the developer awaits”.

70 In his oral evidence, Mr Hunt said that he had not had experience in preparing waste management plans. He said that by 25 January 2002, he had not taken over the Woolworths file as Mr Hargraves was still tidying up pieces of the file and bringing it to him. I do not accept that evidence. He said that he referred Mr Kapetangiannis’ memorandum to Mr Hargraves. I do not accept that evidence. It was not corroborated by Mr Hargraves. It was not corroborated by any document. In my view, Mr Hunt was seeking to distance himself from his involvement with the E K Nominees file because of the work he was doing in relation to the Queen Street site at this stage.

71 Mr Hunt said that “probably” he told Mr Kapetangiannis that it was the developer’s responsibility, not Woolworths’ responsibility, to prepare the waste management plan. However, the deferred commencement conditions of the development consent, which were forwarded by Mr Kapetangiannis to Mr Hunt with his memorandum of 25 January 2002, required details to be provided of the supermarket’s storage and disposal arrangements of perishables, including the frequency of collection. Plainly, Woolworths’ input was required. That is why Mr Kapetangiannis was seeking it. I infer that Mr Hunt did nothing to move this issue forward because he was waiting to see how discussions on the Queen Street site developed.

Further Discussions on Queen Street

72 On 25 January 2002, Mr Markham sent to Mr Hunt and Mr Hain, of Woolworths’ Big W division, a new concept plan prepared by Markham Corporation’s architect. On 29 January 2002, Mr Hunt and Mr Hain met with Mr Markham, a representative of Holdmark Developers Pty Ltd, and the architect who had prepared the concept plan for the Queen Street site. By letter dated 29 January 2002, Messrs Hunt and Hain advised Mr Markham as follows:

The site has been of interest to both Woolworths supermarkets and Big W for many years and one that we believe offers an excellent opportunity for locating our businesses within Auburn. We take this opportunity in formally expressing interest in working with yourself and the team to secure a suitable retail opportunity for both Big W and supermarkets and look forward to further discussing this matter.

If we can be of any assistance whilst you are in the process of determining the retail offer, we would be more than happy to assist in this process

73 This letter was forwarded to Mr Markham on 4 February 2002.

74 In the course of his cross-examination, Mr Hunt accepted that he understood at the time that the formal expression of interest in Woolworths’ letter dated 29 January 2002 was a step which had an adverse impact on the prospects of Woolworths proceeding with the supermarket at the Auburn Road site. He later resiled from that admission, but the admission was properly made.

Further Progress on Auburn Road and Discussions with Markham Corporation

75 On 31 January 2002, Mr Kapetangiannis asked Mr Hunt if he had any problems with Mr Isaac’s request to run a truck through the proposed delivery route, and to let him know who could be contacted to set up the trial. Mr Hunt’s response was to say that the trial had already been conducted and a video tape produced to the Council, and therefore he doubted that the exercise needed repeating. Mr Kapetangiannis observed that this had been a trial of a different route which had been found to be inappropriate. He asked Mr Hunt to reconsider and to forward him contact details to organise the test. Mr Hunt’s response was consistent with the inference I draw that he was not expediting progress on the Auburn Road site because of the negotiations pending on the Queen Street site. The test was conducted on 12 February 2002.

76 On 5 February 2002, Landerer & Co proposed amendments to the agreement for lease and lease. They asked Corrs Chambers Westgarth to identify any matters which were in issue so that a meeting could be convened between the representatives of the respective parties with a view to resolving any outstanding issues.

77 On 4 and 5 February 2002, Mr Gergely received layout plans from Woolworths for the liquor store and ramps from the car park to the supermarket and the liquor store. On 6 February 2002, he received from Woolworths its feasibility plan for the supermarket and liquor store showing the layout in greater detail.

78 On 12 February 2002, Mr Gergely asked Auburn Council for permission to start excavation before the deferred commencement conditions were satisfied. He said that this request was made because of time limitations set by Woolworths for its occupancy.

79 E K Nominees’ intention to start excavation and piling work as soon as possible was known to Woolworths. It was one of the matters discussed in the regular meetings of consultants. At the meeting held on 13 February 2002, attended by Mr Kapetangiannis for Woolworths, it was noted that it was proposed that piling and excavation start on 21 February 2002, and that the reason for this was due to commitments given to the Council and to “end users”, that is, Woolworths. Mr Kapetangiannis tabled feasibility drawings at the meeting of 13 February 2002. The drawing was for “information purposes at this stage”.

80 On 26 February 2002, the Council advised Mr Gergely that before excavation could start, E K Nominees would have to have satisfied all of the deferred consent conditions, or have obtained Council approval to omit the conditions, or applied under s 96 of the Environmental Planning and Assessment Act 1979 (NSW) to vary the conditions. E K Nominees concentrated its efforts on satisfying the conditions.

81 On 27 February 2002, Woolworths provided another copy of its feasibility plan. There was a further meeting of consultants on 27 February 2002 and an excavation start date of 14 March 2002 was agreed upon. There was continuous work on the project during February and March 2002. This included Woolworths providing further feasibility plans, the issue of further plans by the architects, the obtaining of certification that the project design met the fire services requirements of the Building Code of Australia and other applicable standards, and the obtaining of approval from Sydney Water for the deviation of the sewer main.

82 On 27 February 2002, Mr Kapetangiannis advised Mr Hunt that at the consultants’ meeting held on that day, Mr Marcocci “flagged that the project at Auburn will not be complete for a Woolworths opening for Christmas”. He asked Mr Hunt to advise him if this had any negative impact from Mr Hunt’s perspective. There is no evidence of Mr Hunt’s suggesting that that advice would have any negative impact from his perspective.

83 On 6 March 2002, Mr Markham advised Mr Hunt that Holdmark had exchanged unconditional contracts to purchase the Queen Street site. He advised that settlement was expected in May 2002 and that Holdmark was targeting the second half of 2003 as the time by which a supermarket could be delivered for fit-out purposes. He invited Woolworths as one of four parties who had expressed interest to submit their best offer to lease the supermarket area within the development. He wrote a letter in similar terms to Mr Hain. Mr Hain noted “Smkts keen to submit joint offer on site”. Mr Hain noted that Mr Hunt anticipated that the supermarket would gross more than $30,000,000, which, in context, meant more than $30,000,000 annually. The projected sales for the Auburn Road site for the 2004 year were $25,200,000. The projected sales on the Auburn Road site only reached more than $30,000,000 after seven years of operation. This confirms that Mr Hunt believed the Queen Street site was a superior site.

84 On 8 March 2002, Corrs Chambers Westgarth requested a meeting with Landerer & Co to discuss the Auburn supermarket. That meeting was arranged to be held on 15 March 2002. On 14 March 2002, Corrs Chambers Westgarth identified what were described as commercial and drafting issues which needed resolution.

85 On 15 March 2002, another amended feasibility plan was received by Mr Gergely from Mr Kapetangiannis.

86 A meeting was held that day between the solicitors for E K Nominees and Woolworths. The meeting was also attended by Mr Marcocci and Mr Hunt. Not all of the issues were resolved, although many were. It was agreed that the meeting would be resumed on 21 March 2002. Nothing was said about Woolworths’ intentions to make an offer to lease the Queen Street site.

87 On 25 March 2002, Mr Gergely received certification that the fire services were in accordance with normal engineering practices and met the requirements of the Building Code of Australia. On that day, he sent Mr Isaac and various of the consultants a set of progress prints showing the new Woolworths layout and some changes from the previous version. On 26 March 2002, agreement was received from Sydney Water in relation to the deviation of the sewer main. On the same day, the quantity surveyors requested refinements to be made to drawings to enable them to prepare a more accurate quantity survey. As a result of this request, Mr Gergely had a long conference with various consultants who agreed to produce the drawings by 4 April 2002 to satisfy the quantity surveyors’ requests.

88 On 21 March 2002, the meeting between the solicitors, Mr Marcocci and Mr Hunt resumed. A number of issues in relation to the lease and agreement for lease were agreed upon. It appears from the solicitors’ notes of the meeting that the matters outstanding were the number of supermarket trolleys for which E K Nominees would provide storage, and the definition of “outgoings” to whose increase Woolworths would contribute. Again, nothing was said about Woolworths’ intentions with respect to the Queen Street site. Mr Marcocci continued to think that Woolworths would enter into the agreement for lease with E K Nominees.

89 On 22 March 2002, Mr Hunt, on behalf of Woolworths, sent to Markham Corporation a ten-page proposal to take a lease of part of the Queen Street site for a Woolworths supermarket. The offer was subject to Woolworths’ board’s approval. At the same time, Big W made a proposal to lease part of the site for a Big W store. Again, this was expressed to be subject to board approval. Mr Hunt noted in his letter that:

The outline letter of offer provides you with terms and conditions that we would expect in this type of development. The comments are quite extensive and will cover much of the detail that is required for us to reach an agreement and present a paper to Woolworths’ board for approval. It will then form the basis of an agreement for lease and lease should your party accept our offer.

90 There then followed detailed proposals in relation to the premises to be leased, the lease term, the base rental, Woolworths’ contributions to outgoings, extended trading hours, turnover rent, a design brief and numerous other matters. The offer was based on Woolworths’ supermarket trading in conjunction with a Big W discount department store in the centre.

91 Woolworths did not advise E K Nominees that it had sent the proposal in its letter of 22 March 2002. Mr Hunt deposed that he understood that Holdmark would be undertaking an assessment of all offers that it had received. He went on to say that:

I held no belief at that time that the proposal had any adverse impact whatsoever on the prospects of Woolworths proceeding with the establishment of a supermarket at the EK site.

92 I do not accept Mr Hunt’s evidence in the passage quoted. I cannot conceive that Mr Hunt would go to the trouble of preparing the detailed offer, and evidently liaising with Mr Hain in relation to Big W’s offer to take a lease of the Queen Street site, if he did not consider that there were reasonable prospects that Woolworths’ offer would be accepted. So far as the evidence before me reveals, negotiations had gone further in relation to the Queen Street site than they had on any previous occasion. Mr Hunt had no information that any other retailer was preferred to Woolworths. Mr Hunt eventually accepted in cross-examination that Woolworths’ likely competitor for the Queen Street site would have been Coles’ supermarkets or K-Mart. They were both part of the Coles Myer Ltd group. He knew that Coles had recently moved into a refurbished and extended Franklins store in the Auburn Village Shopping Centre.

93 If Woolworths’ proposal was acceptable to Holdmark, there had to be a reasonable prospect that the Woolworths Property Committee would approve it, given that the Queen Street site was superior to the Auburn Road site, particularly if both a Big W discount department store and a supermarket could be accommodated. As I noted previously, if a Woolworths supermarket were to be located at the Queen Street site, there was at least a prospect that Woolworths would not wish to proceed with the Auburn Road site. That must have been Mr Hunt’s view, because in his submission to the Woolworths Property Committee he proposed withdrawing from what he described as the “agreement for lease” in relation to the Auburn Road site. In rejecting Mr Hunt’s evidence referred to in para [91], I also take into account the contents of his submission to the Woolworths Property Committee to which I refer below.

94 On 2 April 2002, Mr Markham advised Mr Hunt and Mr Hain that Woolworths and Big W were the preferred party for the Queen Street development. He proposed a meeting to be held on 5 April 2002 to go over their proposals in detail. That meeting occurred on 5 April 2002. Mr Markham pushed for Mr Hunt and Mr Hain to be in a position to make a submission to a meeting of the Woolworths Property Committee to be held on 7 May 2002. Mr Hunt prepared a submission for the Property Committee. He said that he commenced its preparation in about mid April 2002.

95 Meanwhile, on 10 April 2002, Landerer & Co provided further comments to Corrs Chambers Westgarth on the terms of the proposed agreement for lease and lease. Woolworths asked Mr Gergely to clarify the dimensions of a number of columns. A further meeting of consultants was held on 9 April 2002, although this meeting was not attended by a representative of Woolworths. It was noted that piling and excavation would start as soon as possible after the issue of a construction certificate. It was noted that Woolworths’ internal design drawings were required in order for the architect to proceed. On 11 April 2002, the fire engineers retained by E K Nominees clarified whether additional fire exits were required to be incorporated in the design. On 18 April 2002, Mr Kapetangiannis advised Mr Gergely that Woolworths briefing documents would be ready by the end of the week and that a design co-ordination meeting should be held on 29 April 2002 at Woolworths’ offices to finalise internal design and décor issues to enable Gergely & Pinter to complete their drawings. Further plans were received from Woolworths on 29 April 2002. Mr Gergely received a report from acoustical consultants on 30 April 2002. There was a further consultants’ meeting on 30 April 2002. At the meeting of 30 April 2002, the consultants were advised that excavation would commence on Monday, 6 May 2002. However, Mr Marcocci arranged for invitations to be issued for a ground turning ceremony at the Auburn Road site on Friday, 10 May 2002.

The Woolworths Property Committee Meeting of 7 May 2002

96 On 7 May 2002, the Woolworths Property Committee considered a submission that Woolworths enter into an agreement for lease of a supermarket and a Big W discount department store at the Queen Street site. The submission was signed by Mr Hunt, by Woolworths’ finance manager and by Woolworths’ general manager. It was also “recommended for approval” by Mr Hunt and by three other senior Woolworths executives, including the Chief General Manager of Supermarkets, Mr Flood.

97 The submission was that Woolworths “seek to exit an agreement for lease for premises in Auburn which was approved in July 2001”. The submission noted the following:

Woolworths have been actively pursuing representation in Auburn for the last decade. The preferred site is the subject site, which was previously referred to as the RAAD site. In 2001, it appeared that any opportunity to develop the RAAD site was not going to be realised as the site had been onsold to a residential developer who had shelved the retail development plans. Woolworths property then pursued the next best alternative site. This was the ex Venture store site in the Auburn Road shopping strip.

In July 2001, Woolworths Property Committee approved a submission to enter into an agreement for lease and lease for a 3,100 m² supermarket in the main shopping strip in Auburn Road, Auburn. The lease negotiation on the Auburn Road site is virtually complete with the agreement for lease in the final drafting stages AL. Both parties have actively been finalising these documents ready for execution. They should be in an executable format during the month of May. …”

98 There then followed an analysis of anticipated sales and profits if Woolworths operated supermarkets at both the Auburn Road site and the Queen Street site, and a comparison with the estimated sales and profits if Woolworths operated from the Queen Street site only. The estimated net present value of the proposals of either operating both stores or operating only a store at Queen Street were estimated as follows:

“1. Operate both stores … NPV

Auburn Road ($375,031)

RAAD $1,846,603

Total $1,471,572

2. Operate RAAD only $2,445,061

99 This can be compared with the estimated net present value of the Auburn Road store standing alone of $781,407. The submission continued:

This analysis is based on the assumption that if Woolworths pull out of the Auburn Road site another full line competitor will commence operation in this location. It is likely that this may not eventuate due to the fact that both Coles and Woolworths will be well represented in Auburn. If additional competition does not occur, the sales and potential profit for the RAAD site will be further enhanced.

100 The submission also noted that if two supermarkets operated in Auburn, the loss of sales from Woolworths’ supermarkets at Berala and Granville would be substantially greater than if only one store operated in Auburn.

101 The submission noted that the Queen Street site offered “dramatically improved amenity to the alternative offers in and around Auburn”. These were elaborated upon. The submission showed that the Queen Street site satisfied all of Woolworths’ standard investment criteria. It noted that:

The RAAD development is also estimated to affect the original forecasts of the Auburn Road store by approximately $5,000,000 p.a. If this occurs, the original Auburn store will be projected to incur a negative net present value.

The submission is based on Woolworths not proceeding with the Auburn Road site.

The Woolworths Property Committee’s Decision

102 On 7 May 2002, the Woolworths Property Committee resolved to approve the proposal to establish a new supermarket on the Queen Street site, and that Mr Flood should review whether it opened two stores.

103 As no evidence was called by Woolworths from any person who attended the Property Committee meeting, or from Mr Flood, I infer that the Property Committee was concerned whether commitments had been made to E K Nominees which might preclude it from walking away from the Auburn Road site.

Mr Hunt’s Advice to Mr Marcocci

104 On about 6 May 2002, Mr Marcocci was asked by one of his electrical sub-contractors whether Woolworths was going elsewhere. Mr Marcocci telephoned Mr Hunt. According to Mr Marcocci, he said to Mr Hunt that he had heard that Woolworths was not proceeding with the Auburn Road site and that they were going to the Queen Street site. He asked if that was true. Mr Hunt told him that “there is no decision made whether we go on your site, the Queen Street site, or both”. Mr Hunt told him that the matter was before the board for a decision on Tuesday, 7 May 2002. That was the first time Mr Marcocci had any idea that Woolworths was considering the Queen Street site as an alternative to, or as an addition to, the Auburn Road site.

105 According to Mr Hunt, on or about 7 or 8 May 2002, Mr Marcocci said to him, “I have heard a rumour that Woolworths is considering leasing premises at another site in Auburn. Is this true?” According to Mr Hunt, he told Mr Marcocci, “There is an element of truth in that. I suggest that we get together and discuss where we go from here.” They then agreed to postpone the ground-breaking ceremony. Mr Hunt says that on 15 May 2002, he told Mr Marcocci that:

“Woolworths is negotiating in relation to the Queen Street site in Auburn to support a Big W store as well as a supermarket. The Chief General Manager of Supermarkets has to decide whether we will go with one or two supermarkets in Auburn and that decision could go either way. I do not know what decision he will make, but if it is decided that Woolworths will have only one supermarket in Auburn, I expect it will be the Queen Street site because that site is clearly superior in terms of our needs. We are not doing any more work on the legal side in terms of our proposed documentation with you, until we know what that decision is. As soon as I know the outcome, I will let you know.”

106 On his own evidence, Mr Hunt did not tell Mr Marcocci that he had recommended to the Woolworths Property Committee that Woolworths proceed only with the Queen Street site. On either version of the conversation between Mr Marcocci and Mr Hunt, the matter was left in the balance as to whether or not Woolworths would proceed with the Auburn Road site. According to Mr Marcocci, he was told that no decision had been made. According to Mr Hunt, Mr Marcocci was told that there was an “element of truth” to the rumour that Woolworths was considering leasing premises at another site. In fact, there was much more than an element of truth in that rumour. Be that as it may, this information was sufficient to cause Mr Marcocci not only to cancel the ground-breaking ceremony scheduled for 10 May 2002, but shortly thereafter to issue instructions to the subcontractors and consultants retained by him to stop work. This is significant when considering the parties’ submissions as to what E K Nominees would have done had it been advised earlier of Woolworths’ dealings with Markham Corporation.

Decision Not to Proceed with Auburn Road

107 On 15 May 2002, Mr Hunt asked JEB Holland Dimasi to express their opinion on the likely turnover at the Queen Street site if the supermarket were extended in size and also to advise what level of turnover could be anticipated from the Queen Street site if it were the only supermarket operated by Woolworths in Auburn, or alternatively, if it was competing against a second Woolworths supermarket at the Auburn Road site. On 17 May 2002, JEB Holland Dimasi advised that the proposed Woolworths supermarket of the larger size at the Queen Street site was likely to achieve additional sales of around $7-9,000,000 if a Woolworths supermarket did not proceed at the Auburn Road site. They advised that a larger Woolworths supermarket at the Queen Street site was also likely to reduce the potential sales for the Woolworths supermarket at the Auburn Road site.

108 On 4 June 2002, the Woolworths Property Committee resolved not to proceed with the agreement for lease of the Auburn Road site.

109 According to Mr Hunt, it was not until shortly before 20 June 2002 that he was told the results of the Property Committee meeting of 4 June 2002. According to Mr Hunt, he told Mr Marcocci on 20 June 2002 that Woolworths had decided there should be only one supermarket in Auburn and that it would not be at the Auburn Road site. According to Mr Marcocci, no decision was communicated to him by 20 June 2002 as to whether Woolworths would proceed with the Auburn Road site. In this, as in other matters where there is a conflict between Mr Marcocci and Mr Hunt, I prefer Mr Marcocci’s evidence.

262 This is only to apply to this context what was said by Deane J in The Commonwealth v Verwayen (at 445) that:

Ultimately, however, the question whether departure from the assumption would be unconscionable must be resolved not by reference to some preconceived formula framed to serve as a universal yardstick but by reference to all the circumstances of the case, including the reasonableness of the conduct of the other party in acting upon the assumption and the nature and extent of the detriment which he would sustain by acting upon the assumption if departure from the assumed state of affairs were permitted.

263 This statement was referred to with approval by Gleeson CJ, McHugh, Gummow and Callinan JJ in Giumelli v Giumelli at 123.

264 This conclusion is also consistent with later English authority. Attorney-General (Hong Kong) v Humphreys Estate has been applied in England in a number of cases to deny a claim in estoppel where a party alleged that it altered its position to its detriment in reliance on negotiations which were conducted subject to contract (Evans v James [2001] CP Rep 36, [2000] 42 EG 173; Akiens v Salomon (1993) 65 P&CR 364; Secretary of State for Transport v Christos [2003] EWCA Civ 1073; [2004] 1 P&CR 17). However, in Gillett v Holt [2001] Ch 210, the Court of Appeal said that Attorney-General (Hong Kong) v Humphreys Estate did not require a party raising an estoppel, who was acting to his or her detriment on the faith of a promise or representation made by another, to show that the promise or representation was expressed to be irrevocable. Robert Walker LJ referred with approval (at 227) to the argument that:

The whole point of estoppel claims is that they concern promises which, since they are unsupported by consideration, are initially revocable. What later makes them binding, and therefore irrevocable, is the promisee’s detrimental reliance on them. Once that occurs, there is simply no question of the promisor changing his or her mind.

265 In Gonthier v Orange Contract Scaffolding Ltd [2003] EWCA Civ 873, Lindsay J, with whom Kay and Waller LJJ agreed, said (at [60] and [61]) that Gillett v Holt had opened up a possibility which Attorney-General (Hong Kong) v Humphreys Estate had seemed to deny, namely, that:

“where a very strong case can be made on the facts as to the obviousness and duration of reliance upon a ‘subject to contract’ dealing nonetheless being implemented, notwithstanding

, the right to withdraw from the dealing may be lost …”.

266 In Whittle v Parnell Mogas Pty Ltd (2006) 94 SASR 421 the Full Court of the South Australian Supreme Court, by majority, rejected a claim by an intending lessor of a service station that the proposed lessee, with whom it had negotiated, was estopped from denying that an agreement for lease had been made. The decision turned on findings of fact that the intending lessor had not assumed that an agreement for lease had been made, that the proposed lessee had not induced it to do so, and the proposed lessee was not acting unconscionably in denying that it was bound to proceed (at 4466,448; [100]-[101], [117]-[118]).

267 In the course of her reasons, Layton J referred (at 448, [116]) with approval to Brennan J’s statement in Waltons Stores at 423 that it is only unconscionable for a person to assert a right to withdraw from a proposed contract if he or she has induced the opposite party to assume that he or she is not free to withdraw. Her Honour did not consider whether this was consistent with the reasons of Mason CJ and Wilson J at 406, cited in para [244] above, or with other authorities. The question did not squarely arise, as the estoppel the plaintiff contended for was based on its having assumed that a contract had been entered into; not that a contract would be entered into. I do not consider that Whittle v Parnell Mogas Pty Ltd requires a different conclusion on this question from the one to which I have come.

268 I conclude that notwithstanding that E K Nominees, through Mr Marcocci, did not believe that Woolworths was bound to enter into an agreement for lease, but was free to withdraw, it is nonetheless unconscionable for Woolworths to deny E K Nominees’ assumption that Woolworths would proceed to enter into the agreement for lease. The unconscionability arises from a combination of circumstances that:

(a) Woolworths knew of E K Nominees’ expenditure in reliance on that assumption and encouraged that expenditure;

(b) the expenditure would have been for the benefit of both parties had the contract proceeded;

(c) Woolworths insisted that if E K Nominees failed to perform in accordance with the agreement in principle which had been reached, that is, if it failed to take all the preliminary steps which were necessary before entering into the agreement for lease, Woolworths would be entitled to make a claim for its own costs and loss of profits;

(d) Woolworths represented that the approval which its board had given would be operative for a period of twelve months and that if the agreement for lease were not entered into by that time, Woolworths would regard itself as free to terminate the agreement in principle, free of any claim. That period had not expired when it withdrew from negotiations for the agreement for lease;

(e) E K Nominees had previously sought assurances that notwithstanding the possibility of a better site being available to Woolworths, Woolworths had a bona fide interest in locating a Woolworths supermarket on the Auburn Road site, and that assurance was given;

Was the Proposed Agreement Sufficiently Defined?

269 A lack of definition of the interest which the plaintiff was induced to assume it would acquire in the defendant’s property may not be a bar to the grant of equitable relief on the principles of proprietary estoppel (Ramsden v Dyson per Lord Kingsdown at 170-171; Plimmer v The Mayor of Wellington; Inwoods v Baker [1965] 2 QB 29 at 37; Holiday Inns Inc v Broadhead; Austotel v Franklins). As Jacobson J said in Pacific National (ACT) Ltd v Queensland Rail [2006] FCA 91 (at [668]):

(22) Subject to a qualification stated below, it is not necessary that the interest to the secured under the

or

principle be expressly stated or that the terms of the arrangement or understanding to secure that interest be sufficiently certain to be enforceable as a contract. The Court must look at the circumstances of each case to determine the form of relief:

at 713–714,

[1965] 2 QB 29 at 37, and

at 607–610 per Priestley JA.

(23) The qualification is that where the parties have not reached agreement as to the contractual terms necessary to establish the interest in the land, the Court will exercise caution in coming to a conclusion that it would be unconscionable to prevent a party from insisting upon its strict legal rights:

at 585–586 per Kirby JA and at 620–621 per Rogers AJA.

270 Even if what had been agreed as the terms to be included in the agreement for lease were insufficient for a complete agreement, it would not follow that E K Nominees was not entitled to relief by way of compensation for the expenditure incurred. If that were the fact, it would mean that, in contrast to Waltons Stores, E K Nominees would not be entitled on the principles of equitable estoppel to enforce a contract which Woolworths would be estopped from denying it was obliged to enter into. It would not follow that E K Nominees was wholly without remedy.

271 The present case is not like Mobil Oil Australia Ltd v Wellcome International Pty Ltd, on which Woolworths relied. There, an officer of an oil company made representations to the company’s franchisees of its petrol stations that they would receive an extended tenure if certain performance levels were met. Two promises or representations were alleged. The first was that if a dealer achieved a certain level of performance in any one year, it would be give one additional year’s tenure of its current franchise (the “one for one proposal”). The second was that if the dealier attained a certain level of performance over six years, it would receive a nine-year extension of its franchise (the “nine for six proposal”). The Full Court of the Federal Court held that no commitment was mentioned in reference to the nine for six proposal (at 515). The Court said (at 515):

… A generalised commitment to find a way to implement an appropriate tenure for achievements scheme cannot, in the present context, give rise to an expectation of either a ‘particular legal relationship’ coming into existence or the grant of an identifiable ‘interest’ to use the language of

and of

. The essential elements and details of the legal relationship are lacking as are any specific details relating to the duration or terms of any extension or renewal or of the period over which the franchisees would qualify. …

The ‘less precise’ approach identified in

by Priestley JA does not in our view, support a submission that there is ‘sufficient’ certainty in the ‘promise’ or ‘encouragement’ with respect to the ‘finding a way’ commitment, to attract the operation of the doctrine of equitable estoppel. The lack of information as to the contents of the proposal is too pronounced. In particular, there is a lack of information as to the period and qualifying performance and the duration, and extent of the interest to be granted.

272 The Court went on to compare a case where the plaintiff had made expenditure where it was possible with reasonable certainty to identify the amount or the value of the expenditure or the value of work done on property, so that some reasonably precise determination could be made of the relief called for to redress or remove the detriment.

273 The matter is one of degree. The insufficient definition of the proposal in Mobil Oil Australia v Wellcome International Pty Ltd is also relevant to the reasonableness of the plaintiff’s reliance upon a proposal and whether it is unconscionable for a defendant to deny an assumption which an indefinite proposal may have induced.

274 In the present case, the term, commencement, duration, and rent of the lease had all been settled. So had almost all the other terms. The parties had also settled the details of the construction to be undertaken.

275 The details of the agreement for lease which were unresolved were minor. The parties had agreed to all the essential terms of a lease which could have given rise to a binding agreement for lease had they then agreed to be bound by those terms. The only “commercial terms” which were outstanding were the number of trolleys for which a bay was to be provided and proposed amendments to the definition of outgoings to whose increase Woolworths would be required to make a contribution. The correspondence leading to the grant of the Board’s approval had set out sufficient terms. Woolworths’ letter of 5 December 2000 had proposed that “lessee to pay increases in rates and taxes over a year one base only”. E K Nominees agreed to this on 25 January 2001. This was restated in Woolworths’ letter of 18 July 2001 advising of the Board’s approval. The draft lease provided a definition of outgoings. The dispute concerned the proposal by E K Nominees to include in the definition of outgoings an amount for management fees and associated wages. The fact that that inclusion was unresolved does not mean that there was not an agreement on all essential terms. Had E K Nominees sought specific performance of an agreement for lease, such an order could have been made with the question of what expenses fell within the expression “outgoings” being left for later decision, if a question of interpretation of the agreement for lease ever arose. Alternatively, the matter could have been referred to an Associate Judge or referee to settle the terms of the lease.

276 The same comments are true of the provision of space for shopping trolleys. The draft lease provided that the landlord provide a secure undercover area for the storage of not less than a certain number of trolleys. There was no suggestion that there was disagreement about the number. The solicitor’s note of the meeting of 21 March 2002 was that Mr Marcocci would come back on the issue of the number of shopping trolleys for which space was to be provided. This was a detail which, if left unresolved, would be resolved by an implication of reasonableness, or by the term being settled by the Court.

277 It was suggested that there was an outstanding commercial term in relation to a “sunset date”. This was a reference to the date for completion of the building and the date by which Woolworths would be able to occupy it. Corrs Chambers Westgarth had set out Woolworths’ position in relation to the extension of the “sunset date” in its letter of 14 March 2002. It appears that this was a matter which was resolved at the meeting of 15 March 2002.

278 Accordingly, the fact that not all of the terms of the proposed agreement for lease had been finally resolved does not preclude E K Nominees from pursuing its claim for equitable compensation for expenditure incurred as the appropriate remedy to give effect to its cause of action on the basis of an equitable estoppel.

Date From Which Equitable Compensation is Payable

279 Woolworths submitted that the earliest time in which it could be said to have engaged in anything remotely resembling unconscientious conduct was following the approach from Markham Corporation on 10 January 2002. It submitted that equitable compensation could only be payable in respect of expenditure incurred after that date.

280 I do not agree with this submission. It is true that Woolworths’ conduct from 29 January 2002 is capable of giving rise to an estoppel by encouragement through silence in failing to disclose the change in the likelihood of its entering into the agreement for lease following the approach from Markham Corporation. However, that is not the only ground upon which the estoppel arises. What is unconscientious is the denial by Woolworths of E K Nominees’ assumption that it would enter into the agreement for lease. What makes its position unconscientious is not only its silence following the approach from Markham Corporation in January 2002, but its later denial of that assumption, notwithstanding the encouragement which it gave to E K Nominees’ expenditure after the conveying of Board approval on 18 July 2001.

Conclusion in Relation to Estoppel Claim

281 For these reasons, I consider that E K Nominees has made good its claim that it is entitled to equitable compensation from the time it incurred expenditure with Woolworths’ knowledge and encouragement after 18 July 2001.

Quantum of Claim for Equitable Compensation

282 E K Nominees’ claim for equitable compensation was made up as follows:

AMENDED SCHEDULE A

AUBURN SUMMARY OF CLAIM	AMOUNTS ARE EXCLUSIVE OF GST
CONSULTANTS	AMOUNT CLAIMED
PROJECT MANAGEMENT
ISSAC PROPERTY CONSULT	$43,500.00
SILRO HOLDINGS PTY LTD	$15,600.00
CONBUILT PTY LTD	$18,810.00
TOTAL	$77,910.00
CONSULTANTS
GERGELY & PINTER PTY LTD (ARCHITECTS)	$516,500.00
RICHARD DUGGAN (MECHANICAL VENTILATION CONSULTANT)	$7,000.00
D. CATTERSON & ASSOCIATES (ELECTRICAL CONSULTANT)	$14,400.00
ARUP SYDNEY (FIRE ENGINEERED SOLUTION)	$14,500.00
JEFFERY & KATAUSKAS PTY LTD	$5,188.70
MCKENZIE GROUP CONSULTING (BCA CONSULTING & CONSTRUCTION CERTIFICATE)	$16,600.00
THE LHO GROUP (HYDRAULIC DESIGN CONSULTANT)	$67,750.50
LEN KEEBLE PROJECT PLANNING SERVICES (CONSTRUCTION & PROCUREMENT PROGRAMMING)	$4,650.00
RALPH BEATTIE BOSWORTH (NSW) PTY LTD (QUANTITY SURVEYOR)	$12,017.50
COLSTON BUDD HUNT & KAFES PTY LTD (TRANSPORT PLANNING)	$13,030.00
INGHAM PLANNING (TOWN PLANNERS)	$5,093.00
WILKINSON MURRAY PTY LTD (ACOUSTICAL CONSULTANTS)	$7,167.46
LEAN LACKENBY & HAYWARD L'POOL PTY LTD (SURVEYORS)	$7,395.45
HLA ENVIROSCIENCES PTY LIMITED	$8,245.00
PICTORAL REPORTING (DILAPIDATION REPORT ON ADJOINING PROPERTY)	$3,653.50
DM TAYLOR, LANDSCAPE ARCHITECTS PTY LTD (LANDSCAPE ARCHITECT)	$1,938.00
MPN GROUP PTY LTD (STRUCTURAL ENGINEER)	$119,857.00
LANDERER & COMPANY (LEGALS)	$5,490.75
RATNER CHIU & CO SOLICITORS	$550.00
GRAHAM BROOKS & ASSOCIATES	$1,675.00
JEBB HOLLAND DIMASI	$560.00
ELEVATOR MANAGEMENT SERVICES (LIFT DESIGN)	$2,182.00
TOTAL	$835,443.86
AUTHORITIES
COUNCIL FEES	$13,823.00
WATER	$10,714.00
ENERGY AUSTRALIA	$2,472.00
TOTAL	$27,009.00
TRADES
FIP ELECTRICAL	$550.00
J A BRADSHAWS (EXCAV)	$214,899.19
BASSETT DEMOLITIONS	$13,245.00
BARCA PLUMBING	$7,640.00
AIRMAKERS AIRCONDITIONING	$12,021.18
WILSON & SONS	$5,900.00
T & C PLASTERING	$17,350.00
MASTER VINYLS PTY LIMITED	$6,000.00
VARIOUS TRADES	$8,542.53
TOTAL	$286,147.90
MISCELLANEOUS
SHOVEL	$36.01
RENT	$37,916.66
TOTAL	$37,952.67
TOTAL	$1,264,463.43

283 No different issues of principle were raised in relation to the assessment of equitable compensation from those raised in relation to the assessment of damages.

284 The expenses excluded from the assessment of damages due to the apportionment of that claim as at 29 January 2002 are recoverable under the claim for equitable compensation.

285 An issue as to the apportionment of expenses before and after 18 July 2001 arises in comparatively few cases.

286 I will deal only with the claims where particular comment is warranted.

287 The first invoice for Silro Holdings Pty Ltd was dated 27 July 2001. It was for $2,400, not for $840 as set out in E K Nominees’ claim as set out in Mr O’Connor’s affidavit. The invoice covered the period from 30 June 2001 to 27 July 2001. Eight hundred and forty dollars is a fair pro rata apportionment of the invoice. No adjustment is required to the fees paid to Silro Holdings.

288 The claim for fees paid and payable to Gergely & Pinter needs to be apportioned. The fee for stage 1 was $357,000. Substantial work for stage 1 was done before 18 July 2001. An invoice of $50,000 was rendered in March 2001. Another invoice for $50,000 was rendered in October 2001. Mr Gergely deposes that that invoice relates partly to work done between 18 March 2001 and 18 July 2001, and partly to work done after 18 July 2001. He says that it is impossible to allocate the charge between the two periods from Gergely & Pinter’s records. Hence, E K Nominees seeks to apportion only the October invoice for $50,000. However, Gergely & Pinter did not render invoices on the basis of hours spent, such that the invoices correlated with their entitlement to fees. The third invoice for $50,000 was not sent until April 2002. But the fee of $357,000 for the first stage of the development was earned by 6 December 2001 when development consent was granted. The question is how the stage 1 fees of $357,000 should be apportioned. If the October invoice is apportioned pro rata, of the fees earned up to 6 December 2001, only $71,500 would be attributable to the period before 18 July 2001. That does not appear to me to be an appropriate allocation. I accept that there was a flurry of work after 18 July 2001 associated with the negotiations with the Council and the hearings leading up to the final granting of consent. However, the evidence of the work done before 18 July 2001 was not given in the same detail as the evidence of the work done after that date, because E K Nominees was focusing on establishing what it had done in reliance on Woolworths’ approval letter of 18 July 2001. I do not accept that 20% of the stage 1 fees is a fair allocation to the period before 18 July 2001. Precision is impossible. In my view, the stage 1 fee should be allocated in proportion of 50/50 for work done before, and work done after 18 July 2001. That allocation may be generous to Woolworths, but it is the best I can do. Accordingly, I will allow half of the fees payable to Gergely & Pinter for stage 1 ($178,500) and the fees payable for stage 2 ($238,000). This is a total of $416,500 which, coincidentally, is exactly $100,000 less than the amount claimed.

289 The only other adjustment to be made is to the fees paid to Wilkinson Murray, acoustical consultants. The first invoice of $195 rendered by that company was for the period from 1 May 2001 to 31 August 2001. The invoice was for one hour’s work. It is not possible to say that that work was done after 18 July 2001. That invoice is disallowed and the claim is reduced by $195.

290 For the reasons given previously, the claim for the costs of the shovel are rejected. The claim for rent is not pressed. Hence, the claim is reduced by $138,147.67.

Conclusion

291 E K Nominees is entitled to equitable compensation in a sum of $1,126,316, plus interest pursuant to s 100 of the Civil Procedure Act. Again, I presume no claim is made for GST paid on the expenditures. If there is an issue about that matter, I will hear argument when short minutes are brought in. There will need to be a calculation of interest based on the times at which E K Nominees paid Simhilt. I direct the plaintiff’s counsel to bring in a calculation of interest and a minute of judgment to be entered.

292 The short minutes should provide for the defendant to pay the plaintiff’s costs.

APPENDIX

Adjustments to E K Nominees’ claim for damages for under s 52 of the Trade Practices Act 1974 (Cth) as sought in Amended Schedule B to the Summons to reflect an apportionment of expenses incurred before and after 29 January 2002.

Gergely & Pinter were entitled to charge fees in total being 4¼% of final building costs. This was divided into three stages. The first stage for which Gergely & Pinter were entitled to 30% of the total fees was described as “work (development application)”. Mr Gergely accepted that this stage was completed when the development consent was given on 6 December 2001. The second stage for which 40% of the fees were payable was for “working drawings, building application”. The third stage (30%) was for site inspections, detailed drawings and contract administration. The third stage was not reached.

It was not suggested that Gergely & Pinter were not entitled to the amount of the fees for which invoices were rendered. Mr Gergely estimated the final building cost to be about $28,000,000. The quantity surveyors advised a building cost of $32,600,000. Whilst I did not accept this as evidence of the likely cost of the development, it provided a reasonable basis for Gergely & Pinter and E K Nominees to assess an appropriate level of fees. In any event, the total amount charged of $595,000 reflected the fact that not all of the work which was the subject of the agreement with Gergely & Pinter was able to be carried out. There is no challenge to the reasonableness of the total fees charged for the work done.

“ 143. Gergely & Pinter rendered the following invoices to E K Nominees for work on its Auburn site for the project that involved a Woolworths supermarket, copies of which are annexure “C” to this affidavit, and E K Nominees paid all these invoices except the last:

143.1 No. 5 10 March 2001 $50,000

143.2 No. 6 10 October 2001 $50,000

143.3 No. 7 1 April 2002 $50,000

143.4 No. 8 24 June 2002 $50,000

143.5 No. 9 1 October 2002 $50,000

143.6 No. 10 14 January 2003 $100,000

143.7 Final 4 February 2003 $245,000

Total: $595,000

144. I calculated the fee owed to Gergely & Pinter by E K Nominees this way. Under my fee agreement (Annexure A), the fee was 4¼% of the final building cost, which I estimated to be $28 million, namely $1,190,000. Stage One of the work to be done under the agreement earned 30% of this fee, or 1.275% of the final building cost, or $357,000. Stage Two of the work earned 40% of this fee, or 1.7% of the final building cost, or $476,000.

145. Invoices 5 – 10 represented Gergely & Pinter’s fee for Stage One of the project and half of Stage Two, i.e .:

145.1 Stage One: $357,000

145.2 Stage Two (50%): $238,000

145.3 Total: $595,000

Although (as I deposed in paragraph 141 of this affidavit) Gergely & Pinter had by early May 2002 completed substantially more than half of the stage two work, in light of the fact that the project did not proceed when Woolworths declined to enter into a lease, I only invoiced E K Nominees for half of Stage Two.

146. Invoice No. 5, dated 10 March 2001, does not relate to work done on E K Nominees’ Auburn Road project after 18 July 2001.

147. Invoice No. 6, dated 10 October 2001, relates partly to work done between 10 March 2001 and 18 July 2001 and partly to work done after the latter date, but it is not possible from Gergely & Pinter’s records to allocate the amount charged between these two time periods. Pro-rating the invoice in proportion to the months that it spans before 18 July 2001 (approximately 4) and after 18 July 2001 (approximately 3), results in $21,500 being attributable to the period after 18 July 2001.

148. Taking the allocation of Invoice No. 6 in the previous paragraph into account, the total amount that Gergely & Pinter charged to E K Nominees for the Auburn Road project after 18 July 2001 was $516,500 ( i.e ., Invoices 7 – 9 plus the final invoice, plus $21,500 of Invoice No. 6).

149. Because development consent was granted on 6 December 2001, the amount invoiced by Gergely & Pinter to E K Nominees in respect of work performed in the time period 10 January 2002 to 7 May 2002 was approximately $238,000. ”

No fees for the stage one work are payable as damages. The stage two work for which fees of $238,000 were rendered spanned the period from 6 December 2001 to 7 May 2002. Mr Gergely allocates this expense wholly to the period after 10 January 2002. However, extensive work was done between 6 December 2001 and 10 January 2002, and up to 29 January 2002. In my opinion, the stage two fees of $238,000 (which have not been paid) should be apportioned pro rata between the periods 6 December 2001 to 29 January 2002, and from that date until 7 May 2002. This may favour Woolworths owing to the holiday period being taken into account, but the difference should not be substantial. E K Nominees is entitled to recover as damages 98/152 or 64.47% of the stage two fees.
I therefore allow $153,447.35 as damages in respect of the architects’ fees. As this sum has not been paid, there will be no interest to be added in respect of this component of the claim.

The first invoice for $4,000 was dated 20 February 2002. I infer that this work was done following the grant of development approval. I have allocated 30% of the first invoice to the period after 29 January 2002. I allow $1,200 in respect of the first invoice, and the $3,000 which is the amount of the second invoice. The claim is allowed at $4,200.

D Catterson & Associates were engaged before 29 January 2002. They were sent drawings on 14 December 2001 for the purpose of attending a meeting of consultants on 19 December 2001. I have allocated their invoice pro rata over the periods from 6 December 2001 to 29 January 2002, and from 29 January 2002 to 7 May 2002. The claim is therefore allowed at $11,567.

There is no dispute that all of the work was done after 29 January 2002. $14,500 is recoverable.

There is no issue in relation to the invoice for $16,600.

There is no issue in relation to the invoice for $514.50.

The invoice of 31 January 2002 covers work up to 28 January 2002 and is therefore not allowable. The subsequent invoices cover the work done from 29 January 2002. The subsequent invoices total $62,115.50.

There is no apportionment issue in relation to the expense of $4,650.

Ralph Beattie Bosworth’s first invoice was dated 28 February 2002. It did not specifically identify the period over which the work charged for was done.
This company was involved in the project prior to 29 January 2002, as appears from its being sent the conditions of development consent on 14 December 2001 and its attendance at the meeting of consultants on 19 December 2001. I have apportioned the first invoice pro rata for the periods from 14 December 2001 to 29 January 2002, and from 30 January 2002 to 28 February 2002. I allow $1,271 for the first invoice. There is no issue as to the latter invoices. Accordingly, E K Nominees is entitled to claim damages of $10,071 in respect of the fees paid to this company.

The invoice of 15 February 2002 was for services rendered in January 2002. I have not attempted to apportion that invoice for the last two days of the month for the reasons previously given. The remaining invoices are for the work done from February 2002. They total $5,670 and are recoverable.

The invoice was for work from 7 February 2002. It is allowed at $497.75. The amount claimed seems to have been a misreading of the invoice.

The first invoice of 28 February 2002 covered the period from 10 December 2001 to 28 February 2002. I have apportioned the invoice. E K Nominees is entitled as damages to recover three-eighths of the invoice, totalling $528.30. There is no issue as to the later invoices. The total amount recoverable is $5,571.68.

The first invoice for survey work was rendered on 18 March 2002. The invoice shows that surveys were carried out in October 2001. It does not appear when the balance of the work was done. I am not satisfied that any of that work post-dated 29 January 2002. Accordingly, the first invoice is not allowed. E K Nominees is entitled to damages for the remaining invoices, totalling $2,659.09.

The invoice pre-dates 29 January 2002 and is not allowed.

Pictorial Reporting rendered an invoice dated 4 February 2002 for shooting videos and preparing a dilapidation report. It does not appear whether the work was done before or after 29 January 2002, or whether the work spanned that date. I do not allow the first invoice. The other invoices are for additional work and they are allowed at $2,663.50.

The last invoice is dated 31 January 2002. It does not appear whether any of the work was done after 29 January 2002. I do not allow this claim.

MPN Group rendered fees up to 23 January 2002. Their next invoice is dated 20 March 2002 and covers the continuation of work from 23 January. I have allowed 89% of the invoice dated 20 March 2002. I apportion that invoice by date. The remaining invoices are for later work. They are allowed in total at $105,483.71.

Landerer & Co’s first invoice was dated 18 February 2002. It is for work done in connection with preparing the agreement for lease, including attending meetings with Mr Marcocci and with Woolworths’ solicitors. That would cover some work done after 29 January 2002, such as the letter requesting amendments of 5 February 2002. This account cannot be readily apportioned by time. I will allow an arbitrary $1,000 to cover work for the period from 29 January to 18 February 2002. Landerer & Co’s invoice of 22 March 2002 for advising on rights of way appears to be for work done after the relevant date. I infer that had the work been done before 29 January 2002, an account would have been rendered before 22 March 2002, particularly as another account was rendered on 18 February. I allow the payments made to Landerer & Co in total in an amount of $2,200.

Ratner Chiu’s invoice was dated 11 April 2002. I infer from the date of the invoice that the work was done after 29 January 2002. The claim is allowed at $550.

This invoice was for work done following a purchase order dated 11 March 2002 and relates to the period in question. It is allowed at $2,182.

Sydney Water rendered an invoice on 27 February 2002 for its charges to the developer for the preparation of a “development servicing plan” for periods after 27 February 2002. Charges were also incurred in March and April 2002 for applications to Sydney Water. In total, the claim is allowed at $10,714.
Simhilt rented premises from E K Nominees to use for a site office and as offices for consultants along with first aid facilities and day accommodation for workers. The claim for rent paid by Simhilt to E K Nominees is not pressed. Costs were incurred in fitting out the amenities building. There was a charge of $550 for FIP Electrical. I conclude that this was incurred after the relevant date and is allowed.

J A Bradshaw was engaged in April 2002 to carry out excavation, shoring and other associated works on the project. Its charges were $214,899.19 and are allowed.

Bassett carried out demolition work. It rendered an invoice on 12 February 2002 for $12,800. This was for the demolition and removal of an old shop and a fibro extension. The invoice shows that this was done pursuant to a quotation dated 24 January 2002. It does not appear when the work was done. I do not accept this item.

Barca Plumbing carried out plumbing work on a “do and charge” basis. Its invoices relate to work done in March 2002 and later. They are allowed at $7,640.

These companies all carried out work in February or later. Their invoices are allowed as recoverable damages.

Various subcontractors and tradesman did work on a do and charge basis. Their invoices are summarised in paragraph 206 of Mr Connor’s affidavit. The amount claimed is $8,505.53. I am not satisfied that the invoice of $1,250 from Kalone Constructions dated 31 January 2002 relates to work done on or after 29 January 2002. Otherwise, the costs claimed are recoverable. I allow this item at $7,255.53.
These are the reasons for the apportionment leading to the amounts set out in the table at paragraph [204] of the judgment. These amounts take into account other invoices about which there is no issue.

29/11/2006 - 1. Change of date from 7 May 2006 to 7 May 2002 in first sentence of para 130;2. 'That period "has"' changed to 'That period "had"' - last sentence 268(d);3. 'Woolworths' in para 282 changed to 'E K Nominees'. - Paragraph(s) 130, 268(d), 282

Actions

Download as PDF Download as Word Document

Citations

EK Nominees Pty Ltd v Woolworths Ltd [2006] NSWSC 1172

Most Recent Citation

Yesodei Hatorah College Inc v The Trustees of the Elwood Talmud Torah Congregation [2011] vsc 622

Cases Citing This Decision

20

Mills v Walsh [2022] NSWCA 255

Doueihi v Construction Technologies Australia Pty Ltd [2016] NSWCA 105

Thiess Pty Ltd v FFE Minerals Australia Pty Ltd [2007] QSC 209

Cases Cited

28

Statutory Material Cited

5

Pacific National (ACT) Ltd v Queensland Rail [2006] FCA 91

Giumelli v Giumelli [1999] HCA 10

Campbell v Backoffice Investments Pty Ltd [2009] HCA 25

CITATION:	E K Nominees Pty Ltd v Woolworths Ltd [2006] NSWSC 1172 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	28; 29 & 30 November 2005; 1; 2; 5; 6 & 7 December 2005.
JUDGMENT DATE :	16 November 2006
JURISDICTION:	Equity Division Commercial List
JUDGMENT OF:	White J
DECISION:	Order the parties to bring in short minutes in accordance with the reasons.
CATCHWORDS:	TRADE & COMMERCE – Trade practices and related matters – Misleading and deceptive conduct – Plaintiff, a developer, and defendant, an owner of chain of supermarkets, commenced negotiations for agreement for lease with respect to land owned by plaintiff – Proposed agreement for lease provided for construction of supermarket on plaintiff’s land – Plaintiff expended significant moneys in order to obtain development approval and otherwise prepare land for development – Expenditure made in anticipation of formal agreement for lease with defendant – Defendant encouraged plaintiff’s expenditure – Defendant claimed right to recover costs and loss of profits if plaintiff failed to proceed – Defendant reserved right to withdraw from proposed agreement if it were not signed within twelve months of board approval - Third party developer approached defendant with superior development opportunity – Defendant withdrew from negotiations with plaintiff prior to expiry of twelve months period in order to pursue development opportunity with third party – Whether defendant engaged in misleading and deceptive conduct by representing intention to enter into agreement for lease – Whether defendant engaged in misleading and deceptive conduct by representing that there had been no material change to likelihood of its entering into agreement for lease – ss 4(2), 52 and 84 Trade Practices Act 1975 (Cth) considered – Held that defendant engaged in misleading and deceptive conduct – Whether defendant’s misleading and deceptive conduct causative of plaintiff’s decision to expend moneys on development – Whether plaintiff entitled to damages pursuant to s 82 Trade Practices Act – Whether plaintiff derived benefit of residual value by its expenditure on development – Damages awarded – Calculation of damages - ESTOPPEL – Equitable estoppel – Principles of equitable estoppel – Whether plaintiff entitled to equitable compensation for its expenditure on basis of principles of equitable estoppel – Whether defendant’s representation that it would enter into an agreement for lease with the plaintiff was sufficiently clear to found an estoppel – Whether necessary for plaintiff to assume that defendant was not free to withdraw from anticipated legal relationship – Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 considered – Whether proposed agreement for lease was sufficiently defined for an estoppel to operate – Held that defendant estopped from departing from plaintiff’s assumption that defendant would enter into agreement for lease – Held that plaintiff entitled to equitable compensation – Calculation of equitable compensation.
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979 (NSW) Trade Practices Act 1974 (Cth) Fair Trading Act 1987 (NSW) Civil Procedure Act 2005 (NSW) Evidence Act 1995 (NSW)
CASES CITED:	Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 Kimberley NZI Finance Ltd v Torero Pty Ltd [1989] ATPR (Digest) 53 193 Winterton Constructions Pty Ltd v Hambros Australia Ltd (1992) 39 FCR 97 Warner v Elders Rural Finance (1993) 41 FCR 399 Lam v Ausintel Investments Australia Pty Ltd & Ors (1989) 97 FLR 458 [1990] ATPR 40-990 Tesco Supermarkets Ltd v Nattrass [1972] AC 153 Elajou v Dollarland Holdings plc [1994] 2 All ER 695 The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 Ted Brown Quarries Pty Ltd v General Quarries (Gilston) Pty Ltd (1977) 16 ALR 23 British Westinghouse Electric & Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673 Monroe Schneider Associates (Inc) v No. 1 Raberem Pty Ltd (1991) 33 FCR 1 Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333 Ruthol Pty Ltd v Tricon (Australia) Pty Ltd [2005] NSWCA 443 Makita Pty Ltd v Sprowles (2001) 52 NSWLR 705 Australian Securities and Investments Commission v Rich (2005) 216 ALR 320 Hadid v Australis Media (28 October 1996 Sperling J unreported) Connex Group Australia Pty Ltd v Butt [2004] NSWSC 379 Giumelli v Giumelli (1999) 196 CLR 101 Sabemo Pty Ltd v North Sydney Municipal Council [1977] 2 NSWLR 880 British Steel Corp v Cleveland Bridge and Engineering Co Ltd [1984] 1 All ER 504 Dickson Elliott Lonergan Ltd v Plumbing World Ltd [1988] 2 NZLR 608 Brenner v First Artists’ Management Pty Ltd [1993] 2 VR 221 POS Media Online Ltd v Queensland Investment Corp [2001] FCA 809 Sinclair v Rankin (1908) 9 WALR 233 ABB Engineering Construction Pty Ltd v Abigroup Contractors Pty Ltd [2003] NSWSC 665 Australian Securities and Investments Commission v Edwards (2005) 220 ALR 148 Mason and Carter Restitution Law in Australia S Christensen “Recovery for Work Performed in Anticipation of Contract: Is Reliance an Element or Benefit?” (1993-1994) 11 Aust Bar Rev Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 A Wyvill “Enrichment Restitution and the Collapsed Negotiations Cases” (1993-1994) 11 Aust Bar Rev 93 Attorney-General (Hong Kong) v Humpreys Estate Ltd [1987] 1 AC 114 Mobil Oil Australia Ltd v Wellcome International Pty Ltd (1998) 81 FCR 475 Legione v Hately (1983) 152 CLR 406 Ramsden v Dyson (1866) LR 1HL 129 Holiday Inns Inc v Broadhead (1974) 232 EG 951 Plimmer v The Mayor of Wellington (1884) 9 App Cas 699 Commonwealth v Verwayen (1990) 170 CLR 394 Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466 Austotel Pty Ltd v Franklins Self Serve Pty Ltd (1989) 16 NSWLR 582 S & E Promotions Pty Ltd v Tobin Brothers Pty Ltd (1994) 122 ALR 637 Baird Textile Holdings Ltd v Marks & Spencer plc [2001] All ER 352 Evans v James [2001] CP Rep 36 [2000] 42 EG 173 Akiens v Salomon (1993) 65 P&CR 364 Secretary of State for Transport v Christos [2004] 1 P&CR 17 Gillett v Holt [2001] Ch 210 Gonthier v Orange Contract Scaffolding Ltd [2003] EWCA 873 Inwoods v Baker [1965] 2 QB 29 Pacific National (ACT) Ltd v Queensland Rail [2006] FCA 91
PARTIES:	E K Nominees Pty Ltd v Woolworths Ltd
FILE NUMBER(S):	SC 50093/03
COUNSEL:	Plaintiff: R Angyal SC & D Jay Defendant: R McHugh & P W Flynn
SOLICITORS:	Plaintiff: Landerer & Co Defendant: Clayton Utz

Heading	Paragraph No.
Introduction	[1]
The Auburn Road Site	[5]
Woolworths’ Interest in Auburn	[8]
Consensus on Terms	[14]
Board Approval	[27]
Obtaining Council Approval	[30]
Work Continued Whilst Agreement for Lease Discussed	[43]
Markham Corporation’s Approach on the Queen Street Site	[56]
Progress of the Auburn Road Development	[63]
Further Discussions on Queen Street	[72]
Further Progress on Auburn Road and Discussions with Markham Corporation	[75]
The Woolworths Property Committee Meeting of 7 May 2002	[96]
The Woolworths Property Committee’s Decision	[102]
Mr Hunt’s Advice to Mr Marcocci	[104]
Decision Not to Proceed with Auburn Road	[107]
Mr Hunt’s Credit	[115]
No Alternative Development	[118]
E K Nominees’ Claim for Damages or Equitable Compensation	[119]
Misleading and Deceptive Conduct Claim	[120]
Representation that Woolworths Intended to Enter into an Agreement for Lease and Lease of the Auburn Road Site	[127]
Representation that Likelihood of Woolworths Entering Into Agreement for Lease had Not Materially Changed	[131]
Misleading and Deceptive Conduct by Non-Disclosure	[140]
No Change of Intention Prior to 7 May 2002	[143]
Change to Likelihood of Woolworths’ Proceeding with Auburn Road	[150]
Causation	[157]
Damages for Expenses Incurred from 29 January 2002	[170]
A Question of Evidence	[206]
Equitable Compensation for Expenses Incurred from 18 July 2001	[211]
Equitable Estoppel	[219]
Clarity of Representation	[228]
No Assumption that Woolworths was Obliged to Proceed	[231]
Was the Proposed Agreement Sufficiently Defined?	[269]
Date From Which Equitable Compensation is Payable	[279]
Conclusion in Relation to Estoppel Claim	[281]
Quantum of Claim for Equitable Compensation	[282]
Conclusion	[291]
APPENDIX	Page 116

143.1	No. 5	10 March 2001	$50,000
143.2	No. 6	10 October 2001	$50,000
143.3	No. 7	1 April 2002	$50,000
143.4	No. 8	24 June 2002	$50,000
143.5	No. 9	1 October 2002	$50,000
143.6	No. 10	14 January 2003	$100,000
143.7	Final	4 February 2003	$245,000
*Total:*	*$595,000*

145.1	Stage One:	$357,000
145.2	Stage Two (50%):	$238,000
145.3	Total:	$595,000