Felkro Nominees Pty Ltd v Commonwealth of Australia

Case

[1997] FCA 560

27 Jun 1997


IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIA DISTRICT REGISTRY       )    No. VG 341 of 1996

)

GENERAL DIVISION                 )

BETWEEN:  FELKRO NOMINEES PTY LTD

(ACN 005 574 514)

(Firstnamed Applicant)

AND:     MOREPACK MERCHANDISING

(NSW) PTY LTD

(ACN 056 351 592)

(Secondnamed Applicant)

AND:     COMMONWEALTH OF AUSTRALIA

(Firstnamed Respondent)

AND:     JOHN SYDNEY DAWKINS

(Secondnamed Respondent)

CORAM:    Ryan J

DATE:     27 June 1997

PLACE:    Melbourne

MINUTES OF ORDER

THE COURT ORDERS:

  1. The amended statement of claim filed herein on 31 January 1997 be struck out.

  1. The applicants have leave to file and serve by 25 July 1997 a further amended statement of claim properly raising the cause of action in estoppel referred to in the order of Sundberg J of 10 December 1996 and making it clear that the assumption or expectation relied on did not continue beyond November 1992.

  1. The applicants pay the respondents' costs of the motion on notice dated 17 February 1997 including the costs of the hearing on 21 February 1997, such costs to be taxed in default of agreement.

NOTE:     Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIA DISTRICT REGISTRY       )    No. VG 341 of 1996

)

GENERAL DIVISION                 )

BETWEEN:  FELKRO NOMINEES PTY LTD

(ACN 005 574 514)

(Firstnamed Applicant)

AND:     MOREPACK MERCHANDISING

(NSW) PTY LTD

(ACN 056 351 592)

(Secondnamed Applicant)

AND:     COMMONWEALTH OF AUSTRALIA

(Firstnamed Respondent)

AND:     JOHN SYDNEY DAWKINS

(Secondnamed Respondent)

CORAM:    Ryan J

DATE:     27 June 1997

PLACE:    Melbourne

REASONS FOR JUDGMENT

RYAN J:   This is an interlocutory application by way of motion on notice filed by both respondents seeking a dismissal or permanent stay of the proceedings.

The firstnamed applicant, Felkro Nominees Pty Ltd ("Felkro") is a manufacturer of paper products made from raw recycled paper.  Felkro purchased raw recycled paper from Austissue Pty Ltd.  As from 26 June 1992 paper products made in Australia from raw recycled paper lost their exemption from sales tax.  In September 1992, the firstnamed respondent ("the Commonwealth") established a bounty scheme to assist
Australian producers of recycled paper adversely affected by the removal of the tax exemption. The scheme involved payments by the Commonwealth to State governments over a three year period for passing on to the producers, thereby allowing them to sell their products at the same prices which would have been charged had the goods remained exempt from sales tax.  Felkro did not receive any payments under the bounty scheme, though its supplier, Austissue Pty Ltd did.

In October 1995 the Commonwealth served on Felkro a statutory demand under s 459E of the Corporations Law for unpaid sales tax.  On 6 November 1995 Felkro applied under s 459G to set aside the statutory demand (VG 3661 of 1995). The affidavits in support of the application were then used as the basis of a proceeding commenced by Felkro and Morepack Merchandising (NSW) Pty Ltd on 17 June 1996 against the Commonwealth and the former Treasurer, the secondnamed respondent ("Mr Dawkins").

The applicants alleged that, as manufacturers of paper products made from raw recycled paper, they were entitled to payments under the Commonwealth's bounty scheme, and also that they were entitled to set off such payments against the amount claimed in the statutory demand.  In reasons for judgment published on 10 December 1996 in relation to an earlier motion by Mr Dawkins to strike out the original statement of claim and seeking dismissal of the whole proceeding as disclosing no cause of action or as being frivolous, vexatious or an abuse of process, Sundberg J summarised the relevant parts of the claim as follows:

  1. The first is that the respondents represented to Felkro that it was entitled to bounty payments, and as a result of Felkro's reliance thereon the respondents are estopped from denying that Felkro is entitled to payments.

(ii)The second alternative is that the respondents misrepresented the effect of the bounty scheme by stating that manufacturers of raw recycled paper products were entitled to bounty payments, and that the entities which were liable to pay sales tax in respect of the wholesale sale of the products were to be recipients of the bounty. The respondents owed Felkro a duty of care to state the effect of the scheme accurately. In breach of duty the respondents misstated its effect, which was that the producers of the paper, not the producers of the products, were to be recipients.  As a result Felkro suffered loss.

(iii)The third alternative is that Mr Dawkins, who administered the scheme, committed the tort of misfeasance in a public office. It was his duty under the scheme to authorise payments to Felkro.  Contrary to the scheme, he authorised payments to Austissue of money that should have been paid to Felkro.  Mr Dawkins knew that Felkro was entitled to the payments.  He also knew that Austissue was not entitled to them, alternatively was reckless in authorising the payments to Austissue.

The s 459G application was dismissed by Jenkinson J and Felkro has appealed to the Full Court against that dismissal.

On 4 September 1996 an application for an injunction was refused by Sundberg J, who held that Felkro did not have an arguable case on any of the causes of action in its statement of claim. On 23 October 1996 Felkro was placed in liquidation.
On 10 December Sundberg J struck out all those parts of the statement of claim pleading causes of action other than estoppel, and permitted the applicants to amend their statement of claim so as properly to raise the estoppel issue. In doing so, his Honour noted that in pleading its action against Austissue, Felkro claimed to have become aware in September 1992 that it would not receive any bounty payments
and, consequently, it was not open to Felkro to claim in an action based on estoppel that it had relied, after that date, on an entitlement to payment from the Commonwealth as it knew by then that no such payment would be received.

However, his Honour noted that, in a new affidavit sworn by Mr Felderbaum, a director of both applicants, it was claimed that Felkro had not become aware until the end of November 1992 that it would not receive the bounty, by which time it had engaged in activities in reliance on obtaining the payment. There was, therefore, his Honour held, an arguable case in estoppel in respect of the period to November 1992.

By the present motion the respondents seek that the proceeding be dismissed or permanently stayed on the grounds that:

(a)the amended statement of claim filed on 31 January 1997 does not comply with the orders made and the reasons for judgment delivered by his Honour Justice Sundberg on 10 December 1996;

(b)no reasonable cause of action is disclosed;

(c)the proceeding is frivolous or vexatious; and/or

(d)the proceeding is an abuse of the process of the Court.

The amended statement of claim, which was filed on 31 January 1997, alleges, under the heading "Representations":

Between September 1992 and October 1995, the Respondents represented to the Applicants that they were or would become entitled to receive payments from the Firstnamed Respondent pursuant to the bounty scheme ("the representations").

After extensive particulars appended to that paragraph, the amended statement of claim continues under the heading "Estoppel":

  1. At all material times between September 1992 and October 1995 the Applicants assumed that they were, or would become entitled to, receive payments from the Firstnamed Respondent pursuant to the bounty scheme ("the assumption").

PARTICULARS

(a)The Applicants assumed that because they were Australian producers of recycled paper products and were affected by the Bill they would therefore receive payments from the Firstnamed Respondent.  They assumed that the form of payment would either be -

(i)payments directly from the Firstnamed Respondent;

(ii)a set off by the Deputy Commissioner of Taxation of sales tax which would be payable by the Firstnamed Applicant save for the existence of the bounty scheme;

(iii)rebates on the price of recycled paper purchased by the Applicants from Austissue after monies had been received by Austissue from the Firstnamed Respondent through the West Australian government; or

(iv)some other form.

(b)The Applicants assumed that the representations were true and correct and acted in reliance on them.

  1. Further, or in the alternative, at all material times between September 1992 and October 1995 the Applicants expected that -

(a)they would, or would become entitled to, receive payments from the Firstnamed Respondent pursuant to the bounty scheme, and,

(b)the Firstnamed Respondent would remain liable to make the payments to the Applicants whether they were to be paid through the West Australian government, Austissue, directly to the Applicants or by some other means ("the expectation").

PARTICULARS

The Applicants refer to the representations and to the Particulars subjoined to paragraph 18 hereof.

  1. At all material times the Respondents induced the Applicants to adopt the assumption or expectation.

PARTICULARS

The Respondents made the representations to the Applicants when they knew or ought to have known that the Applicants would rely on them and that they would suffer detriment if the assumption or expectation was not fulfilled.

  1. Further, or in the alternative, at all material times the Respondents failed to deny to the Applicants the correctness of the assumption or expectation when they knew or ought to have known -

(a)that the Applicants would rely on them, and

(b)that the Applicants would suffer detriment if the assumption or expectation were not fulfilled.

PARTICULARS

The Applicants refer to the conduct of the Respondents referred to in the particulars subjoined to paragraph 17 hereof.

  1. In reliance on the assumption or expectation the Applicants -

(a)reduced the sale price of their recycled paper products to their customers after making allowance for the expected bounty payments;

(b)lodged sales tax returns with the Deputy Commissioner of Taxation on the basis of the reduced sales price;

(c)continued to purchase raw recycled paper from Austissue;

(d)invested substantial sums of money in the purchase of specialised machinery to be used in the manufacture of recycled paper products at factories at Moorabbin in Victoria and Botany in New South Wales;

(e)entered into a lease of a factory in Botany in New South Wales;

(f)borrowed money to invest in the business.

  1. At all material times the Respondents knew, or intended that the Applicants would act in reliance on the assumption or expectation.

  1. Further, or in the alternative, at all material times the Respondents ought to have known that the Applicants would rely on the assumption or expectation.

  1. The Firstnamed Respondent failed and refused to -

(a)make any bounty payments to or for the benefit of the Applicants pursuant to the representations notwithstanding requests made by or on behalf of the Applicants to do so;

(b)allow the Firstnamed Applicant to set off any sum against the sales tax which was payable by it to the Deputy Commissioner of Taxation save for the existence of the bounty scheme;

(c)withhold payments of bounty to the West Australian government between 1992 and 1994 notwithstanding that all of the monies were to be paid by the West Australian government to Austissue and no payment or benefit would be received by the Applicants.

  1. The Secondnamed Respondent failed and refused to -

(a)request or direct the Firstnamed Respondent to make any bounty payments to or for the benefit of the Applicants notwithstanding requests made by or on behalf of the Applicants to do so;

(b)request or direct the Deputy Commissioner of Taxation to allow the Firstnamed Applicant to set off any sum against the sales tax payable by it to the Firstnamed Respondent save for the existence of the bounty scheme;

(c)request or direct the Firstnamed Respondent to withhold payments of bounty to the West Australian government between 1992 and 1994 notwithstanding that all of the monies were to be paid by the West Australian government to Austissue and no payment or benefit would be received by the Applicants.

  1. In the premises the Respondents are estopped from denying that the Applicants are entitled to bounty payments.

  1. As a result of the matters aforesaid the Applicants have suffered loss and damage.

PARTICULARS

The Applicants suffered the following detriment as a result of their reliance on the assumption or expectation.

(a)Loss and damage suffered by the Firstnamed Applicant:

During the three year period that the bounty scheme was in operation the company would have received payments of $1,500,970.00 if the bounty had been paid to it.

The loss and damage suffered by the company is the sum of $1,500,970.00.

(b)Loss and damage suffered by the Secondnamed Applicant:

Between January 1993 and June 1995 the company had accumulated losses of $408,229.00.

The forecast net profit during this period was $734,370.00 calculated as follows:

1992/1993$146,874.00

1993/1994293,748.00

1994/1995293,748.00

__________

$734,370.00

The total loss and damage suffered by the company is the sum of $1,142,599.00 calculated as follows:

$408,229.00

734,370.00

_____________

$1,142,599.00

_____________

Further particulars of the Applicant's loss and damage will be provided prior to trial.

Total loss and damage suffered by the Applicants - $2,643,569.00

The respondents submit that the dates pleaded in the amended statement of claim do not comply with the orders of Sundberg J.  They submit that Felkro had acknowledged in its earlier
pleading that it was aware in November 1992 that it would not receive the bounty payment from the Commonwealth. Consequently, so it is said, it is not open to Felkro to amend its statement of claim to plead estoppel for the period from September 1992 to October 1995.  In so doing it has in the words of the respondent's  counsel "[created] a new case".

Counsel for the applicants has submitted that even though the bounty payments under the scheme were paid to Austissue Pty Ltd by or on behalf of the Commonwealth, that did not disabuse the applicants of the expectation, created by the representations pleaded, and the subsequent conduct of the respondents over a three-year period (September 1992 to October 1995) that they would receive the bounty.  Whether it was to be paid by way of rebate or by some other means, they remained under the expectation that they would receive it.  It was therefore said to be open to the applicants to plead an estoppel operative for the full period from September 1992 to October 1995.

In his reasons for judgment on the application to strike out the earlier statement of claim, Sundberg J placed particular reliance on an affidavit affirmed 14 October 1996 by Mr Felberbaum, a director of both applicants, in which it was deposed:

  1. ... I was not aware in September 1992 that the bounty would be paid to Austissue.  It was not until about the end of November 1992 during my discussions with John Pedlar that he told me that he had received advice that all bounty monies would be paid to Austissue and that it would then be distributed to those companies which were liable to pay the sales tax.  The
    payment from Austissue to the Applicants would be based on the production details to be provided by me to Austissue. Austissue would then provide such information to the Western Australian government to enable the payments to take place.

...

  1. I had subsequent discussions with John Pedlar during 1992.  We both knew that the bounty would be paid by the Commonwealth to the Western Australian government and then to Austissue.  The Applicants were Austissue's largest customer and all parties wished to continue the trading relationship.  It was agreed between Felkro and Austissue that given that the Commonwealth intended to implement the scheme as set out in paragraph 14 hereof the whole of the benefit of the bounty would be rebated to Austissue to Felkro on the sale of jumbo rolls.  The terms of this agreement were subsequently disputed by Austissue upon the resignation of John Pedlar from Austissue and the appointment of a new board of management.

After noting those paragraphs, his Honour continued:

It is thus clear that the terms of the scheme do not entitle the applicants to any payment by the Commonwealth, that the applicants have acknowledged that the bounty was to be paid to Austissue, that they made an agreement with Austissue whereby Austissue would pass on the bounty to them, that they say that Austissue has not carried out the agreement, and that the facilitator of the scheme, Senator Coulter, understood that payment would be made to the manufacturers of the recycled paper who would pass it on to the manufacturer of products made from the paper.  That much seems to have been conceded by Felkro in its application to set aside the statutory demand.  The transcript records Felkro's counsel saying - "the position taken by the applicants is that Austissue in effect was the collector ... of the bounty and the bounty should have been passed on to Felkro".

After ruling that the applicants' original statement of claim did not disclose a cause of action based on a statutory entitlement in the applicants to bounty payments under the scheme, nor one in misfeasance in a public office, Sundberg J proceeded to consider the claim in estoppel. He first referred to the judgment of Brennan J in Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428-429 as establishing that the elements which had to be proved were that the respondents had induced the applicants to assume or expect that the bounty payments would be made to them, that the applicants, in reliance on that assumption or expectation, had acted in a way
that the respondents knew or intended them to do, and which, if the assumption or expectation were be not fulfilled, would occasion detriment which the respondents had failed to act to avoid.  His Honour distilled from the original statement of claim the detriment alleged by the applicants which he identified in these words (at p. 14):

(c)Relying on the representations the applicants purchased expensive machinery, entered into a lease of a factory at Botany from which to conduct their business in New South Wales, and set the sale price of their products on the basis that they would receive the payments.

He then went on to observe:

The pleading proceeds on the basis that once an estoppel is established, the applicants will be entitled to bounty payments.  That will not be the case.  In Waltons Stores at 423 Brennan J said:

"The unconscionable conduct which it is the object of equity to prevent is the failure of a party, who has induced the adoption of the assumption or expectation and who knew or intended that it would be relied on, to fulfil the assumption or expectation or otherwise to avoid the detriment which that failure would occasion.  The object of the equity is not to compel the party bound to fulfil the assumption or expectation;  it is to avoid the detriment which, if the assumption or expectation goes unfulfilled, will be suffered by the party who has been induced to act or to abstain from acting thereon.

If this object is kept steadily in mind, the concern that a general application of the principle of equitable estoppel would make non-contractual promises enforceable as contractual promises can be allayed."

And at 427 his Honour returned to this theme:

"But the better solution of the problem is reached by identifying the unconscionable conduct which gives rise to the equity as the leaving of another to suffer detriment occasioned by the conduct of the party against whom the equity is raised.  Then the object of the principle can be seen to be the avoidance of that detriment and the satisfaction of the equity calls for the enforcement of a promise only as a means of avoiding the detriment and only to the extent necessary to achieve that object.  So regarded, equitable estoppel does not elevate non-contractual promises to the level of contractual promises and the doctrine of consideration is not blown away by a side-wind.  Equitable estoppel complements the tortious remedies of damages for negligent misstatement or fraud and enhances the remedies available to a party who acts or abstains from acting in reliance on what another induces him to believe."

Accordingly, if the applicants establish the facts in (a), (b) and (c) above, they will not thereby become entitled to recover the bounty payments they would have received had they been covered by the scheme.  But they may be able to recover compensation for expenses incurred in reliance on the representations.  See (c) above.  For example, they allege that in October 1992, in reliance on the representations, they leased premises in which to conduct their business in New South Wales.  That was before the date on which Mr Felberbaum says he discovered that the bounty would be paid to Austissue and not to the applicants.  The material before me suggests that the applicants may be able to establish the facts in (a), (b) and (c), and satisfy the elements listed by Brennan J.  It is therefore arguable, at least in relation to the lease, that they can obtain from the respondents recompense for loss that may have resulted from their reliance on the representations.  It is true that the applicants' case is not strong in so far as proof of representations made by Mr Dawkins depends upon his letter to Senator Coulter of 9 September 1992.  But I am not satisfied that it is so weak that the representations pleaded could not possibly be established.  It is also true that there is nothing in the estoppel part of the pleading that explains how a representation by Mr Dawkins to Senator Coulter amounts to a representation to the applicants.  Cf par 23 in the misstatement part of the statement of claim. But as the comparison shows, that is a pleading deficiency which can be cured.

I am not satisfied that this claim is bound to fail.

It will be seen that the allegation pleaded in paras. 18 and 19 of the amended statement of claim that the assumption or expectation that the applicants were, or would become, entitled to receive bounty payments from the Commonwealth endured from September 1992 to October 1995 flies in the face of what Mr Felberbaum deposed in para. 13 of his affidavit of 14 October 1996.  To raise that allegation was quite outside what was contemplated by the leave to amend which Sundberg J granted.  Moreover, I do not regard the particulars appended to para. 18 of the amended statement of claim as particulars of the assumption or expectation, if they are matters amenable to particulars at all.  The particulars to para. 21, by incorporating by reference the particulars subjoined to para. 17, are similarly predicated on the assumption or expectation enduring between 1992 and 1995.  The allegations in sub-paras. 25(c) and 26(c) likewise travel far beyond November 1992 when,
as his Honour regarded Mr Felberbaum as having conceded, the applicants were disabused of any assumption or expectation that the Commonwealth would pay or credit the bounty directly to either of them.

Finally, the claims for damages or compensation were not confined to the period from September to November 1992 during which Sundberg J accepted that the applicants may be able to establish reliance on representations made by the respondents.  I accept that the applicants are not confined to a claim for compensation arising from the entry into the lease of premises at Botany which his Honour instanced only as an example of compensation to which they may be entitled in respect of the relevant period.  However, the implied licence to rely on other forms of detriment did not extend to detriment which could not have been occasioned by anything which happened during the limited life which Mr Felberbaum's evidence conceded to the assumption or expectation.

Counsel for the respondents urged that the judgment of Sundberg J of 10 December 1996, although interlocutory, gave rise to an issue estoppel which precluded the applicants from repleading their statement of claim as widely as they have; (Makhoul v Barnes (1995) 60 FCR 572 and Re Martin: Ex parte Amtron Australia Pty Ltd (1996) 62 FCR 438).

On the other hand, Counsel for the applicants contended that the extent to which they are entitled to claim compensation in accordance with the principles in The Commonwealth v Verwayen (1990) 170 CLR 394 arising from the estoppel which they allege was not at issue before Sundberg J and was "not legally indispensable to the conclusion" which he reached so as to give rise to an issue estoppel; (Blair v Curran (1939) 62 CLR 464 at 531-533).

I prefer to approach the question before me not by asking whether an issue estoppel has arisen.  Rather, I have considered for myself whether, on the facts pleaded in those parts of the amended statement of claim which Sundberg J in his judgment of 10 December 1996 regarded as unexceptionable and the other facts disclosed by the material (including Mr Felberbaum's affidavit of 14 October 1996), there is a real question whether the amended claim in estoppel in its full width can succeed; (Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91).

The first passage from The Commonwealth v Verwayen relied on by Counsel for the applicants was the observation of Brennan J at 428 that:

The judgments of a majority of the Court in Waltons Stores v. Maher held that equitable estoppel yields a remedy in order to prevent unconscionable conduct on the part of the party who, having made a promise to another who acts on it to his detriment, seeks to resile from the promise ((1988) 164 C.L.R., at pp. 404, 405, 419). The remedy is to effect what Scarman L.J. called "the minimum equity to do justice" in Crabb v. Arun District Council [1976] Ch. 179, at p. 198): see Waltons Stores v. Maher (1988) 164 C.L.R., at pp. 404-405, per Mason C.J. and Wilson J.; (1988) 164 C.L.R., at pp. 419, 423, 427, per Brennan J. The remedy is not designed to enforce the promise although, in some situations (of which Waltons Stores v. Maher affords an example), the minimum equity will not be satisfied by anything short of enforcing the promise.

Reference was also made to the following passage from the judgment of Deane J, at 442:

There is clear support in the cases and learned writings for the view that, in this as in other fields, equitable relief must be moulded to do justice between the parties and to prevent a doctrine based on good conscience from being made an instrument of injustice or oppression. That being so, it should be accepted that the prima facie entitlement to relief based on the assumed state of affairs must, under a doctrine which is of general application in a system where equity prevails, be qualified if it appears that that relief would exceed what could be justified by the requirements of conscientious conduct and would be unjust to the estopped party.  In some such cases, an appropriate qualification may be a requirement that the party relying upon the estoppel do equity (see, e.g., Texas Bank [1982] 1 Q.B., at pp. 108-109). In other cases, relief to which the party relying upon the estoppel would be entitled upon the assumed state of affairs will merely represent the outer limits within which the jurisdiction of a modern court to mould its relief to suit the circumstances of a particular case should be exercised in a manner which will do true justice between the parties (cf. Hamilton v. Geraghty (1901) 1 S.R. (N.S.W.) Eq. 81, at pp. 87-88). In some such cases the appropriate order may be one which places the party entitled to the benefit of the estoppel "in the same position as [he or she was] before" (cf. Birmingham (1888) 40 Ch. D., at p. 286). In others, the appropriate order may be an order for compensatory damages.

I am prepared to accept in the light of that authority that the claim for relief in a pleading based on estoppel may be pitched at what Deane J called "the outer limits" within which the Court may mould its orders to suit the circumstances of a particular case.  However, that does not entitle the pleader to allege, as circumstances of the particular case, matters which are concededly not available to be relied on by the applicant.  The present applicants' case is founded on the ineluctable premise (assuming in their favour that it can be made out) that the assumption or expectation was operative only between September and November 1992.  That is not to say that the claim for relief must be confined to detriment occurring in that period.

Thus, if, in reliance on the expectation whilst it was operative, the applicants took a lease of the Botany premises for three years which, but for the assumption or expectation, they would not have taken at all, they may be entitled to relief equal to the assumed amount of the bounty if that was not more than the rent payable under the lease.  However, the vice in the present pleading is that it seeks relief for detriment allegedly occasioned by an expectation or assumption said to have been operative far beyond November 1992.  It was concern to avoid just such a vice, I consider, which prompted Sundberg J to order that the applicants have leave to amend the statement of claim "so as properly to raise the estoppel cause of action" which he had extensively discussed earlier in his reasons and had indicated to be confined to an expectation or assumption operative no later than November 1992.

In my view, applying as Sundberg J did, the formulation of Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129-130, the claim for compensation attributable to any assumption or expectation alleged to endure after November 1992 is "so obviously untenable that it cannot possibly succeed".

In light of this conclusion, and taking the approach endorsed by Lockhart J in Trade Practices Commission v Australian Iron and Steel Pty Ltd (1990) 92 ALR 395 at 413, the amended statement of claim in its present form must be struck out. There will leave to the applicants to replead the case founded on estoppel which Sundberg J considered they may be able to establish. It will be a condition of that leave that the further amended statement of claim make it clear that the assumption or expectation relied on did not continue beyond November 1992. The applicants must pay the respondents' costs of the motion on notice dated 17 February 1997 including the costs of the hearing on 21 February 1997.

I certify that this and the preceding fifteen (15) pages are a true copy of the Reasons for Judgment of his Honour Justice Ryan.

Associate:

Date:

Counsel for the Applicants     : Mr T.J. Rosen

Solicitors for the Applicants     :    Kelly & Chapman

Counsel for the Respondents     : Mr C.M. Maxwell

Solicitors for the Respondents  : Australian Government

Solicitor

Date of Hearing                : 21 February 1997

Date of Judgment               : 27 June 1997

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