Fox v Toll Properties Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 4373 of 2004

FRANCES CLAIRE FOX (who sues as the administratrix ad colligendum bona of the estate of the late Thomas John Beresford)	Plaintiff
v
TOLL PROPERTIES PTY LTD & ORS	Defendants

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JUDGE:	HANSEN J
WHERE HELD:	Melbourne
DATE OF HEARING:	19-23 February 2007
DATE OF JUDGMENT:	11 May 2007
CASE MAY BE CITED AS:	Fox v Toll Properties Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2007] VSC 138

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Landlord and tenant – Lease – Tenant selling business and granting licence to occupy to purchaser – Overholding at expiration – Whether equitable assignment of lease to purchaser occupying the premises – Monthly tenancy implied – Notice determining tenancy – Whether vacant possession given – Subsequent use of premises – Whether liable for double rent under Landlord and Tenant Act 1958, s 10 – Liable to pay commercial rate for use of part of premises.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P J Cosgrave SC	Armstrong Ross
For the First, Eighth and Ninth Defendants	Mr W F Lally QC and Mr B G Ross	Clayton Utz
For the Second to Seventh Defendants	Mrs S L Marks	Mills Oakley

HIS HONOUR:

The starting point in this case is a lease (“the lease”) dated 1 March 1996 whereby Thomas John Beresford leased to A R Neal Transport Pty Ltd (“ARN Transport”) the premises at 9-12 Sims Street, Footscray for a period of five years commencing on 1 March 1996 to 28 February 2001 at the rental specified therein and with a single option of a further five years. I will refer to this as the plaintiff’s property; it is also referred to as 61-75 Sims Street, Footscray. The property comprised an office and warehouse and a rear yard surfaced with bitumen. The net leasable area of the office and warehouse was 4,731m² and the rear yard was 4,836.25m². The permitted use was “office and transport warehouse”. The lease included a guarantee of the lessee’s obligations by six named persons who are the second to seventh defendants in the proceeding.

The next step is that by an agreement dated 19 January 2001 ARN Transport and three associated companies (“the ARN Transport Group”) sold their assets and business (of transport, warehousing and logistics) to Toll Transport Pty Ltd (“Toll Transport”), completion to be on 1 February 2001 at which time, among other things, the vendor shall in respect of the licensed premises specified in Schedule 15, license such property to the purchaser with effect from completion, the licence fee to be an amount equal to the rent paid by the vendor as tenant under any lease relating to the property, and the purchaser to reimburse the vendor for all outgoings relating to the property monthly in arrears. Schedule 15 included the plaintiff’s property as to which it was stated that the licensee was Toll Transport for a term from the completion date to 28 February 2001 at a total licence fee of $19,122.83 which equated to the rental payable monthly under the lease.

Then, by an undated deed ARN Transport granted to Toll Transport for the term commencing on 1 February 2001 a licence to occupy the plaintiff’s property together with such rights of access thereto as the licensor had under its lease for the licence fee of $19,122.83 in advance on the commencement date. The premises were to be used only for the “permitted use” which was defined as use as a transport terminal, goods store and vehicle service depot including the use or storage of fuels, lubricants, chemicals or other items which might normally be found at such premises, including cargo, which could be hazardous. Clause 2.2 provided that subject to cl 5.2 the term of the licence ends on “the Termination Date”. The Termination Date was not stated. It is however stated in the Schedule that the expiry date of the lease is 28 February 2001. Clause 2.3 stated that the rights given to the licensee by the licence “are contractual only and do not give the Licensee any estate or interest in the land”. While the deed is undated it is evident that it was signed and provided for completion on 1 February 2001.

It so happened that for some time since ARN Transport had also occupied the property at 77-91 Sims Street, Footscray, which adjoined the plaintiff’s property on its southern boundary, under a lease from Grady Nominees Pty Ltd which was due to expire on 30 June 2001 but with two options for renewal of five years each. I will refer to this property as Toll’s property. According to Schedule 2 of the asset and business sale agreement, Toll’s property comprised an office and warehouse area of 5,784m² and a yard area of 4,599m². ARN Transport conducted the same freight and warehouse business on Toll’s property as it conducted on the plaintiff’s property. Under and pursuant to the sale of business agreement, ARN Transport assigned its rights and benefits under the lease of Toll’s property to Toll Transport with effect from completion.

In the ordinary course of ARN’s business conducted at the plaintiff’s property and Toll’s property, freight containers were transported to and from and stored at the properties, and while there were moved by forklifts. A cyclone wire fence formerly ran along the boundary between the properties but some years before 2001 ARN Transport removed the fence from a point at about the rear of the warehouse on the plaintiff’s property to the rear (eastern) boundary of the property, a distance in the order of approximately 50 metres. The purpose of removing the fence was to enable ARN Transport to use the rear of both properties as one area. As Bruce McGregor Holmes, a former director of ARN Transport, said in evidence, the removal of the fence “made it extremely convenient”. That is how the properties were being used when Toll Transport acquired the assets and business of ARN Transport. The asset and business sale agreement, and licence, duly took effect on or shortly after 1 February 2001. On that occurring ARN Transport ceased trading and Toll Transport commenced to conduct the business which ARN Transport had conducted at the plaintiff’s property and Toll’s property. To all outward appearances it was a seamless transition effected without disruption to the ordinary course of daily business by Toll Transport engaging (with very little exception it would seem) the personnel and assets of ARN Transport.

I now refer, fairly summarily, to relevant events.

(a)In January and February 2001 Peter Gerard Scully of ARN Transport raised with Ian Garth Billington, an employee of a Beresford company who handled this matter for Beresford, the possibility of ARN Transport staying in possession until the end of March to allow for a possibly longer time being required for settlement. On 5 February Billington advised that Beresford agreed to ARN Transport remaining in occupation until the end of March 2001.
(b)On 25 January 2001, following a meeting between them on 19 January, Billington sent Scully a list of “make good” works required to be undertaken under the lease. The works included “Major repairs to severely damaged bitumen rear yard”. Scully passed the list to Holmes to liaise with Billington. They discussed the “make good” work on site following which Holmes sent Billington a facsimile on 7 March 2001 in which he confirmed that all “smaller” items within the warehouse and office had been completed, leaving the following two major items as to which he said:
“1.The adjoining fence between [Toll’s] property and your warehouse. A.R. Neal have agreed to replace the whole of this fence with a new fence of the same description. This work will commence immediately we vacate your warehouse. To do this any earlier would impede the current use of the stores.
2.The resurfacing of the rear yard. As stated we have a quote for $62,750.00 plus GST to put this yard back to a similar (but better) condition to what it was when we both originally made our inspection. However I believe that this type of paving will prove again to be unsuitable for heavy industrial use. A.R. Neal offer to pay the above sum of $62,750 plus GST in full and final settlement of any make good claims (apart from the fence as mentioned above). This money could then be spent in any manner that the lessor decided.

Upon acceptance of this offer, we would make the payment within seven days.”
It is convenient to note what occurred concerning the fence and repair of the yard. First, in relation to the fence ARN Transport did not erect a new fence when they vacated the plaintiff’s property or at the end of March 2001. On 2 May 2001 Billington was advised by Graham Holmes of Dixon Kestles, the agent for Grady Nominees Pty Ltd, the owner of Toll’s Property, that he would get an amount from ARN Transport regarding the fence and would re-erect the fence when Toll moved out of the plaintiff’s property. In fact the fence was not re-erected until late September 2002. Secondly, in relation to the yard repairs, Billington did not respond to Holmes’ facsimile of 7 March 2001 until 16 November 2001 when he sent Holmes an invoice for $69,025 for the make good in relation to the repair of the rear yard, and a letter confirming that on payment Beresford released ARN Transport (and another company) from all make good claims under the lease with the exception of the fence. The amount of $69,025 was paid on 5 December 2001.
(c)Pursuant to the lease ARN Transport paid Beresford rent for the month of February 2001, which amount Toll Transport paid ARN Transport as the licence fee.
(d)After March 2001 neither ARN Transport nor Toll Transport made any request of Beresford for an assignment of the lease, or for a new lease, of the plaintiff’s property. Nevertheless, Toll Transport remained in occupation of the property, and Toll’s property, and continued to conduct the business thereat.
(e)From March 2001 Toll Transport paid Beresford rent and other charges payable in respect of the plaintiff’s property under the lease.
(f)On 17 December 2001 Victoria Ann Padey, the property manager of the Toll Group, gave written notice of one month’s intention to vacate the plaintiff’s property and requested final invoices for payment.
(g)An employee of Toll Transport, Peter Francis Gillies, was given the job of arranging and supervising the vacation of the plaintiff’s property, which he duly attended to, Toll Transport’s property being moved to Toll’s property.
(h)On 17 January 2002 at 5.00 pm Gillies met Billington on site for the purpose of inspecting the premises. At the end of the inspection Gillies handed Billington the keys of the premises. The property was vacant with the exception (asserted by Billington and denied by Gillies) of three cars parked at the front of the property and a container on a trailer at the rear of the property. It was evident that items of “make good” work were required to be undertaken, but they were not relevant to the issue of vacant possession.
(i)On 8 March 2002 Billington sent Padey a list of make good works “required to be undertaken under the Lease”. The list was similar, but not identical, to the list provided to ARN Transport in 2001. It included the items of major repairs to the severely damaged bitumen rear yard and replacing the fence.
(j)In approximately April 2002 another employee of Toll Transport, Gabriel Leslie Nyilas, was given the job of managing the “make good” works on the plaintiff’s property. He dealt with Billington. On ascertaining the arrangements between Beresford and ARN Transport concerning the fence and restoration of the yard, Nyilas advised Billington that Toll Transport would not perform those works although he agreed at Billington’s request to “level off” the yard with gravel. Nyilas considered the make good works completed by August 2002 and did not agree with the contrary contention of Billington made in an email dated 21 August 2002.
(k)At times during 2002 Billington raised with Toll, and in particular Padey, the matter of paying for use of the yard at the plaintiff’s property, which use was observed from time to time. While Padey never disputed liability to pay for such use, assuming it had occurred, Billington (who suggested $16/m²) and Padey (who responded with $10/m²) never agreed on a figure.
(l)On 24 September 2002 Billington visited the site and noticed that work had commenced on erecting the southern boundary fence. By approximately 30 September the whole of the southern boundary was fenced thus closing off the access from Toll’s property to the rear yard of the plaintiff’s property. Toll Transport did not thereafter use the rear yard of the plaintiff’s property.
(m)On 14 October 2002 Billington sent Padey an invoice for $59,696.11 for rent for the period 18 January 2002 to 30 September 2002 for occupancy of the rear yard of approximately 4,836m² at $16.00/m² per annum plus GST. It was neither responded to nor paid.
(n)On 16 November 2002 Billington sent Padey an invoice in respect of the same period but this time for $117,344.72 as rent under the lease for occupancy of the balance of the plaintiff’s property. It was neither responded to nor paid.
(o)On 21 November 2002 Billington sent Padey an invoice for $21,843.18 for all of the unbilled outgoings payable under the lease in respect of the plaintiff’s property between 18 January 2002 and 30 September 2002. It was neither responded to nor paid.
(p)On 29 November 2002 Beresford entered into a long term lease of the plaintiff’s property with Pestex Port Services Pty Ltd.

The proceeding

The proceeding was commenced by Beresford as plaintiff. He subsequently died. On 23 August 2005 his appointed executor, Frances Claire Fox, was substituted as plaintiff, she having obtained a grant of administration ad colligendum bona. On 21 April 2006 she obtained a grant of probate of Beresford’s will. It will be necessary to amend the title to the proceeding to state that she sues as executor of the estate.

Initially the defendants were Toll Properties Pty Ltd and the guarantors. Being concerned whether it had sued the correct Toll company, Beresford added Toll Holdings Ltd and Toll Transport as the eighth and ninth defendants. Sensibly the Toll parties have indicated (in their joint defence and by counsel at the trial) that Toll Transport is the correct defendant for the purpose of the case. The case was conducted on that basis. Accordingly, if the plaintiff is entitled to relief against “Toll” the orders will be against Toll Transport. For these reasons too, in referring to the allegations in the statement of claim against the Toll parties I will confine reference to Toll Transport.

Pursuant to leave granted during the trial the plaintiff filed a further amended statement of claim which I will refer to simply as the statement of claim. The Toll parties and the guarantors filed amended defences in response.

The statement of claim pleads the following case:

(a)Para 2F – In or about March and April 2001:
(a)Toll Transport;
(b)ARN Logistics Pty Ltd (“ARN Logistics”)

acknowledged to and agreed with and represented to the plaintiff that from 1 February 2001:
(a)Toll Transport;
(b)ARN Logistics
was:
(i)the lessee;
(ii)the lessee’s successor;
(iii)the successor of ARN Transport;
(iv)the permitted assign of ARN Transport;
(v)the lessee’s servant, agent and invitee;
(vi)responsible for the rental of the premises.

In particulars it is stated that the acknowledgement, agreement and representation was partly in writing and implied and as to which particulars are set out. On this basis it is alleged in para 3 that on and after 1 February 2001:
(a) Toll Transport;
(b) ARN Logistics
was entitled to the remainder of the term of the lease and the lessee of the premises.

(b)      Para 3A – Alternatively to para 3, on and after 1 February 2001:
(a)       Toll Transport;
(b)      ARN Logistics
was:
(i)       the lessee;
(ii)the lessee’s successor;
(iii)the successor of ARN Transport;
(iv)the permitted assign of ARN Transport;
(v)the lessee’s servant, agent and invitee;
(vi)responsible for the rental of the premises.

(c)Para 7 – On and after 28 February 2001:
(a)Toll Transport;
(b)ARN Logistics

remained in occupation of the premises with the consent of the plaintiff. The particulars under para 2F are relied on. It is then alleged, in para 8, that on 17 December 2001:
(a)Toll Transport;
(b)ARN Logistics

ended the monthly tenancy by giving one month’s notice of intention to vacate. Accordingly, the monthly tenancy ended on 17 January 2002 (para 9).

(d)      Para 10 – Wrongfully and in breach of the lease:
(a)       Toll Transport;
(b)      ARN Logistics
(i)       failed to deliver up possession of the premises;
(ii)      continued in possession until 30 September 2002.
In particulars it is stated that the possession was constituted by:
v Parking containers in the yard to the east of the warehouse.
v Parking trucks and forklifts in the yard.
v Driving or turning trucks and forklifts in the yard.

As a result the plaintiff suffered loss and damage, particularised as the non-receipt of rental of $177,040.82 and outgoings of $21,843.18 (para 10A).
(e)Para 11 – Further or alternatively, by reason of the matters alleged in para 10A:
(a)Toll Transport;
(b)ARN Logistics

is obliged to pay double rent of $397,766.04 pursuant to the Landlord and Tenant Act 1958 s 10 for the period between 17 January 2002 and 30 September 2002.

(f)       Para 12 – Alternatively, on and after 18 January 2002 until 30 September 2002:
(a)       Toll Transport;
(b)      ARN Logistics
wrongfully trespassed on the plaintiff’s premises by using them as alleged in para 10. As a result, para 12A alleges, the plaintiff had been deprived of the use and enjoyment of the premises and suffered loss and damage as follows:
(a)       $10m² for the yard (4,836.25 m²) for the whole period.
(b)Alternatively, if in law the use of the yard area constituted use and occupation of the whole of the premises, rent of $177,040.82 and outgoings of $21,843.18.

(g)Paras 13 and 13A – Further or alternatively, on and after 18 January 2002 until 30 September 2002:
(a) Toll Transport;
(b) ARN Logistics
had use and occupation of the premises. By reason of the use alleged in para 10 the plaintiff claimed the amount sought in para 12A.
(h)Paras 19 – 21 – The plaintiff claimed against the guarantors the amount sought in para 10A.

It is convenient to explain the reference to ARN Logistics. This company was one of the ARN Transport Group. Its name appeared on letterhead sent to Beresford in March and April 2001 for the reason, explained by Holmes, that at that point there was no letterhead for ARN Transport. Instances in this respect are the facsimile from Bernard Flynn to Beresford on 5 March 2001 in which it was advised that “Rental of the above property is the responsibility of Toll Logistics Industrial Division from 1^st February 01” and requesting invoices be sent in that name to their postal address set out, Holmes’ facsimile dated 7 March 2001 quoted in [6(b)] above, and a further letter from Flynn to Billington dated 2 April 2001. Thus, although communications were sent to the plaintiff on ARN Logistics letterhead, it was in fact sent on behalf of ARN Transport. It may further be noted that ARN Transport was de-registered on 19 November 2002 and that ARN Logistics was de-registered on 17 June 2003.

In my view the allegation that ARN Logistics was or became lessee of the plaintiff’s property, or represented itself as such, and the other allegations in the statement of claim concerning it are without substance and may be put aside.

In its defence Toll Transport basically denied the case against it. It does however plead positively in para 7 that:

(a)It was in possession of the premises between 1 February 2001 and 17 January 2002 when it vacated the premises, and that it paid all sums due and payable for that occupation.
(b)It used a small portion of the rear yard of the premises to temporarily place shipping containers, the number of which varied from time to time, on 5 March 2002, 10 April 2002, 10 or 11 May 2002, 23 May 2002, 26 June 2002, 9 July 2002 and 27 August 2002. It is alleged that it had offered to pay the plaintiff a market rental for any use of the rear yard of the premises after 17 January 2002.

In their defence the guarantors also basically deny the case against them.

The issues

As suggested by counsel for the plaintiff the following is a convenient framework under which to consider the issues in the case:

(a)What was the relationship between the plaintiff and the Toll company or companies?
(b)Did Toll give vacant possession of the premises on 17 January 2002?
(c)If yes to (b), did Toll go back into the premises and use them on or after 17 January 2002?
(d)If yes to (c), what is the legal significance of such usage?
(e)What is the liability of the guarantors?

For the reasons given earlier the above references to Toll are to be understood as referring to Toll Transport.
The relationship between the plaintiff and Toll Transport

It is first necessary to refer to certain provisions of the lease between Beresford and ARN Transport. In cl 1.1(b) the expression “the Lessee” was defined to mean, “the Lessee, its successors and permitted assigns and where not repugnant to the context the Lessee’s servants, agents and invitees”. Clause 7 dealt with the matters of assignment and sub-letting. It is sufficient to refer to cl 7.1 which provided that:

“7.1The Lessee shall not assign sub-let or part with or share the possession of or grant any licence affecting or mortgage charge and sub-letting encumber or otherwise deal with any interest in the premises or any part thereof or in this Lease without the prior written consent of the Lessor.”

Clause 13.2 made provision for the situation should the lessee continue in occupation after the end of the lease, as follows:
“13.2If the Lessee continues in occupation of the premises after the end of the term with the consent of the Lessor, the Lessee shall become a monthly tenant of the Lessor at a calendar monthly rental equivalent to one twelfth of the annual rental payable immediately prior to the end of the term and otherwise on the same terms and conditions as those contained in this Lease so far as applicable. Either party may at any time end the Lease by giving one month’s written notice to the other.”

It is convenient to also note the obligations of the guarantors, stated in cl 14 as follows:
“14.1In consideration of the Lessor, at the request of the Guarantor, executing this Lease, the Guarantor:
(a)covenants with the Lessor for the performance and observance of the Lessee’s obligations under this Lease or any renewal of it or arising from any overholding of the premises and for payment to the Lessor of any loss of profits recoverable against the Lessee after termination of this Lease or any renewal of it;
(b)shall indemnify the Lessor against loss arising from any Lessee’s failure to perform and observe the Lessee’s obligations under this Lease.

14.2 The liability of a Guarantor shall not be affected by:
(a)the Lessor granting time or any other indulgence to, or agreeing not to sue, the Lessee or any Guarantor;
(b)any assignment or variation of this Lease; or
(c)any failure by any guarantor to execute this document.

14.3If the Guarantor consists of more than one person, then the covenants by the Guarantor shall bind them jointly and severally.”

Counsel for the plaintiff submitted that Toll “became a permitted assign of [ARN Transport] either in early 2001 when Toll took over Neal’s business and went into possession of the premises or after 31 March 2001 when Toll held the premises in its own capacity”. The plaintiff impliedly consented to, or acquiesced in, Toll so acting. This submission was based on the plaintiff’s awareness, from late 2000 through Scully of the impending sale and later that the sale had gone through with the new owner conducting the business at the premises and paying rent, and the plaintiff accepting the situation. It was submitted that “due to” the plaintiff’s implied consent or acquiescence “Neal transferred to Toll a right in the premises”. While acknowledging that there was no documentation recording an assignment, or a request for an assignment, counsel submitted that there was in effect an equitable assignment of the balance of the term of the lease: Ferguson v Hullock[1]. Toll was thus a permitted assign of the plaintiff within the meaning of the definition of “lessee” in the lease, and liable as tenant under it.
[1][1955] VLR 202.

Counsel sought to confront the difficulty presented to his argument by the licence agreement. He submitted that there was no evidence it had taken effect, that Toll’s conduct in paying rent direct to the plaintiff was inconsistent with the existence of the licence, and that the licence was hard to interpret sensibly. On the last matter counsel pointed to the omission of a termination date (cl 2.2), the provision in cl 5.2 for termination by three months’ notice whereas the expiry date in the Schedule is 28 February 2001 (a term of one month) and the licence fee payable in the event of the licence overholding (cl 5.3). These provisions suggested a licence term of three months and in the event of overholding a monthly licence fee of one-twelfth of the previous licence fee. He concluded by explaining that the point of noting these difficulties was to observe that the more realistic explanation of the parties’ actions was that there was an equitable assignment rather than an effective licence agreement.

I now deal with these submissions referring first to the relevant facts.

In November 2000 Scully told Billington that ARN Transport was selling its business to the Toll Group, that ARN Transport would not be renewing its lease and would depart from the premises. He also told Billington that while it was unlikely that Toll would take an assignment of the lease, Toll’s position was not confirmed. Billington advised that he would commence to market the property for tenancy. At a subsequent meeting at the property in early December 2000 Scully told Billington that ARN Transport would honour the lease to its expiry date, even if the sale fell through, and that he would confirm the sale as soon as he was able. Scully also spoke about the make good obligation of ARN Transport including the need to repair or replace the southern fence when it vacated the property. As a result of these advices, in December Billington instructed Gross Waddell to erect a board on the property in conjunction with Colliers Jardine. Billington also faxed details of the upcoming availability of the property to several estate agents on 19 January 2001. This led to discussions with some agents in January.

Scully had a further meeting with Billington in January when they discussed works required to make good the premises. On 25 January 2001 Billington wrote to Scully with a list of works required to be undertaken under the lease. This is the letter referred to earlier which Scully passed to Holmes to deal with.

Later in January Scully asked Billington to extend the lease for three months to allow for the possibility that settlement of the sale to the Toll Group may take longer than anticipated. On 31 January Scully referred to a period of two months.

On 1 February the sale was duly completed and Toll Transport commenced occupation of the plaintiff’s property.

Billington and Scully spoke again on 5 February following which Scully sent a facsimile confirming agreement to the lease being “extended” to the end of March 2001. Billington responded by facsimile on the same day stating that the assertion of an “extension” of the lease was incorrect. Billington stated that he had “merely indicated that based upon the current interest we have in the leasing of the subject property it appears that the company which you represent may be able to remain in occupation of the subject premises until the end of March 2001 (subject to terms and conditions acceptable to Dr T J Beresford)”. I note that in his evidence in chief Billington said that in their conversation on 5 February he told Scully that Beresford agreed to ARN Transport overholding for one month from 28 February 2001.

Scully responded by return facsimile in which he apologised for any misinterpretation of their conversation and requested advice of “the terms and conditions that Dr Beresford will find acceptable”. He also asked Billington when he thought a confirmation of lease extension would be given.

Billington never provided confirmation and never advised the terms and conditions of occupation from March 2001. All that he did was that on 2 March 2001 he sent ARN Transport an invoice dated that day for rent for March 2001. The Toll Group paid that invoice on 5 March 2001. On 7 March Billington sent ARN Transport an invoice for outgoings to 31 March 2001 which the Toll Group paid on 20 March 2001. On 7 March Flynn sent Billington the facsimile advising that rental for the property was the responsibility of Toll Logistics Industrial Division from 1 February 2001 and requesting that invoices be sent in that name to an address he provided.

On 2 April 2001 Billington sent ARN Transport an invoice for rent for April 2001. Flynn told Billington by facsimile that due to the purchase of ARN Transport by the Toll Group on 1 February 2001 invoices for rent need to be addressed to Toll Logistics Industrial Division and that all accounts will now be processed at Toll Brooklyn. The April rent was duly paid by the Toll Group.

Thereafter, each month Billington rendered invoices for rent to Toll Logistics Industrial and payment was made under remittance from the Toll Group.

It will be noted that in this recounting of events ARN Transport did not request the plaintiff’s consent to an assignment of the lease to Toll Transport. Of course the lease was due to expire on its own terms on 28 February 2001 and ARN Transport had not exercised the option of renewal in cl 10 of the lease. Nor did ARN Transport or Toll Transport request a new lease. Rather, being aware that ARN Transport was selling its business to Toll which would continue the business and occupy the plaintiff’s property, Beresford was content to allow ARN Transport “to remain in occupation” for one month after expiration of the lease. The best indication of the basis on which this occupation was permitted is that stated in Billington’s letter dated 5 February 2001. That states the basis on which the plaintiff was prepared to accede to ARN Transport’s request for an extension for the month of March and being contemporaneous is the best indication in my opinion. Beyond that and sending an invoice for rent for March, Billington never advised the terms and conditions acceptable to Beresford. This was deliberate in my view. It was apparent from Billington’s evidence and his general conduct of the matter that he tried to keep Beresford’s options open for Beresford’s advantage however events might take their course. In my view the letter was advisedly framed to give Beresford the maximum room to move lest it later be said that he had bound himself to an extension of the lease, and thereby impeded his ability to re-let the property. I consider that Billington’s evidence that he told Scully that ARN Transport “would be overholding for a period of one month from 28 February 2001” was a self serving statement designed to ensure bringing the situation within cl 13.2. The fact is that all Billington was responding to was a request by a tenant to be able to remain in occupation for one month after the expiration of the lease to ensure time for completion of the sale of its business. It was a specific request answered in the most non-committal terms which said only that ARN Transport may be able to remain in occupation. Clearly enough Billington verbally indicated that occupation was permitted and implicitly on the basis of paying rent as under the lease.

I reject the plaintiff’s submission that there was not an effective licence agreement. The submission is no more than conjecture. In my view it is well established, and I find, that the licence agreement was duly entered into and acted under by the parties thereto. I do not overlook that the licence itself does not specify a termination date. However it is clear from the sale of asset and business agreement pursuant to which the licence was entered into, that the termination date was 28 February 2001. It may be that the statement of the expiry date in the Schedule to the licence was sufficient indication of the termination date but whether or not that be so the fact that that was the termination date is made clear by the sale agreement.

I do not consider that the other matters referred to by counsel affect this conclusion. In the first place the conclusion is consistent with Scully’s request for permission to stay for the month of March. Then, counsel erred in saying that Toll had paid the February rent; consistently with the lease and the licence ARN Transport paid the rent and was reimbursed by Toll Transport. Further, the terms of cl 5.2 and 5.3 may be understood as reflecting an earlier considered position or the position if the parties extended the period of the licence. That could be consistent with Scully’s initial request for a three month extension. But I have no evidence on these matters and cannot speculate. It is sufficient for me to conclude, as I do, that the licence agreement was duly entered into and acted under. I find that on and from completion of the sale of asset and business agreement on 1 February 2001, and pursuant to the licence, ARN Transport ceased, and Toll Transport commenced, occupation of the plaintiff’s property. Being bound to do so under the lease ARN Transport paid the plaintiff rent for the month of February and that thereafter, following ARN Transport’s request that it do so in March and April 2001, the plaintiff invoiced Toll Transport and Toll Transport paid rent and outgoings. These were charged on the basis of the terms in the ARN Transport lease.

In these circumstances the following conclusions may be expressed. First, prior to 28 February 2001 when, according to its terms, the lease was due to expire, the lease was not assigned to Toll Transport pursuant to cl 7.1. Not only was no assignment requested, but no written consent was provided for an assignment. Toll Transport was thus not a “permitted assign” and “the Lessee” as defined in cl 1.1(b). It is also plain that in no relevant sense was Toll Transport the servant, agent or invitee of ARN Transport for the purpose of that definition, and counsel did not submit otherwise.

Secondly, the facts belie the finding of an equitable assignment of the balance of the term of the lease. The present case is wholly different from Ferguson v Hullock where the assignee, but not the tenant or the landlord, had signed a written assignment which in the circumstances was held enforceable. The case is no more than an instance of circumstances which attracted equity’s power to enforce an agreement to assign. But, as I have said, there was no such agreement, formal or informal, in the present case, let alone a request for an assignment. The absence of such a request is consistent with the agreements between ARN Transport and Toll Transport under which Toll Transport expressly opted for a licence to use the plaintiff’s property as distinct from taking an assignment of the lease. Under these agreements Toll Transport’s occupation of the plaintiff’s property in February 2001 was that of a licensee to ARN Transport which remained the tenant for the month. It is true that Beresford did not have the details of these arrangements but it is evident that he treated ARN Transport as the lessee of the property for that month, although being aware that Toll Transport was taking over occupation. Understandably Beresford, who evidently was an astute landlord, adhered to the lease. For these reasons I conclude, contrary to the submission of counsel for the plaintiff, that in the circumstances as they obtained “from the time effectively that it went into possession at the start of February” Toll Transport did not become an equitable assignee of the balance of the term of the lease.

Thirdly, the question is what was the situation after February? Counsel conceded that the lease came to an end according to its terms on 28 February. However, at the end of the agreed month of March Toll Transport continued in occupation and paid the rent and outgoings as invoiced by Beresford. Counsel submitted that in those circumstances, at the end of March an independent relationship of landlord and tenant arose under which Toll Transport became a monthly tenant. The nature of the tenancy as a monthly tenancy was to be inferred from the circumstance of the payment of rent by the month.

Counsel for the plaintiff did not submit that the effect of permitting ARN Transport an extension to the end of March was to extend the term of the lease to that time. All that he said was that the agreed month was given. On Billington’s evidence that constituted an overholding for one month. In my view that is the correct understanding of the relationship in March. Whether or not I accept Billington’s evidence as to referring to “overholding” in his conversation with Scully, in the circumstances which include the absence of any additional terms and conditions concerning the occupation in March, it must be the position that the occupation fell within the overholding provision in cl 13.2. That governed the position to the end of March. Hence, ARN Transport is to be regarded as overholding in that month. Thereafter, on no basis could ARN Transport be regarded as occupying the position of overholding tenant.

An alternative view suggested by counsel for the plaintiff was that Toll Transport became a monthly tenant to Beresford from the end of February. That hypothesis would regard the substance of the situation based on an awareness that Toll Transport had taken occupation. I consider however that this alternative cannot stand against the overholding arrangement between Beresford and ARN Transport.

Toll Transport’s occupation in March arose under its arrangements with ARN Transport and was not in virtue of being an overholding tenant under cl 13.2 or other agreement with Beresford. After March Toll Transport occupied under an independent monthly tenancy to be implied in the circumstances.

It remains to mention one point. This concerns the plea in para 2F of the statement of claim. This plea suggested a case based on estoppel. That is how counsel for the Toll parties apprehended it and they addressed submissions as to why there could not be an estoppel. As it turned out, counsel for the plaintiff did not seek to establish a case based on estoppel. For this reason it is not necessary to consider the submissions of the Toll parties on this aspect.

Was vacant possession given on 17 January 2002?

While I have referred at [6(h)] to the difference in the evidence between Billington and Gillies as to the presence of cars and a container it is necessary to refer to their evidence in some greater detail.

In his witness statement[2] Billington said that on 17 January he attended the plaintiff’s property to meet Gillies “however, possession of the property was not given to Dr Beresford”. He then said that he also attended the property on 18 January 2002, 10 April 2002, 1 May 2002, 9 May 2002, 21 May 2002, 13 June 2002, 18 July 2002, 27 August 2002, 20 September 2002 and 24 September 2002 and -

“saw that shipping containers were being stored and/or manoeuvred in the rear of the yard of the property and on some occasions trucks and container forklifts were parked on or being manoeuvred in the yard which continued until 30 September 2002. On separate occasions I saw both forklifts and trucks being manoeuvred between the rear of the yard of the property and the rear yard of the premises immediately to the south of Dr Beresford’s property. On one occasion I was taking a prospective lessee through the property with an agent and we had to open the right rear roller door as containers were being stored against the exit door at the rear of the building, which prevented our accessing the rear yard through that exit door.”

He went on in his witness statement, as he dealt with matters in chronological sequence, to say what he saw on the occasion of his visits. He also referred to the action he took to obtain payment from Toll Transport for its use of the plaintiff’s property.

[2]Exhibit A.

In a second witness statement[3] Billington produced, and gave evidence as to, photographs taken of the site showing use of it. Certain of the photographs were taken by him on 17 or 18 January or both days, the others were taken on subsequent dates. I refer to these photographs below.
[3]Exhibit B.

On objection being made to the generalised form of the evidence quoted above Billington gave some oral evidence in chief. He was asked as best as he could recall what he saw on each occasion. He said that:

“On 17 January I observed the one shipping container on a trailer and three cars parked in the front car park of the property. I don’t have a specific recollection of each occasion that I went there, apart from the other one which was on 10 April, during which time I saw approximately 60 to 100 shipping containers in the rear yard of the premises.
His Honour: 60 to 100? --- That’s correct.
Yes? --- But otherwise I just have a general recollection that every time I attended the premises within those dates there was some use of the rear yard.
Mr Cosgrave: And when you say ‘some use of the rear yard’, can you be more specific as to what exact form that use took? --- Well, that use took [the form of] the storing and moving of containers.
On 24 September, that’s the last day you refer to in 2002, in that paragraph as the one you have of visiting the site, why were you visiting on that occasion? --- I was meeting a real estate agent at the premises that day.
And can you tell --- did you go to the rear of the premises on that day? --- I did.
And can you tell the Court what you observed that day? --- I observed that the front section of the fence had commenced construction.”

In cross-examination Billington said that possession was not given on 17 January due to there being a container on a trailer in the yard and three cars in the front car park. As to the evidence of Gillies (in para 9 of his witness statement[4]), Billington agreed that they met at about 5.00 pm at the front of the premises and walked through the office, warehouse and rear yard. He agreed that they observed the entire premises but did not agree with Gillies that the premises were free and clear of all items. There was the container on the trailer in the rear yard, three cars in the car park, items of rubbish and some banners. Billington further disagreed that he said that he was satisfied that the premises were vacant. He agreed that Gillies handed him the keys but denied having accepted them “as the completion of vacant possession”. In accepting the keys he did not say that vacant possession was not given. He said that without the keys it would have been necessary to obtain permission of Gillies or someone associated with the keys to go through the premises.
[4]Exhibit 1.

Billington further said in cross-examination that he told Gillies that the cars and container needed to go. He did not recall what Gillies said. He acknowledged that he had not noted this evidence in his diary or witness statement. He said further that he thought that the cars and the container would be removed “and that would be the end of it”, apart from the make good.

Then, as to the photographs, he was not sure whether he took them on the 17^th or 18^th. He believed that he took some of them while Gillies was there.

Then, having stated his belief that Toll Transport remained in possession after 17 January, he explained that he did not send an account for the next month “Because we expected that in the normal course of events the container and the cars would have been removed”. Because they were there the property was not vacant. He did not say that the property could not be re-let. He acknowledged that the rear yard was to be resurfaced.

Billington denied that the rendering to the Toll Group on 7 May 2002 of an invoice for outgoings to 17 January reflected that he accepted that vacant possession was given on that day, stating that they were not certain as to what Toll’s occupancy of the site on and subsequent to that day meant.

Further on in cross-examination, Billington said that he had an independent recollection of what he saw at the property on 17 January and 24 September but not on the other occasions.

Billington said that he took the photographs on 17 and 18 January to record make good matters for correspondence purposes. The photograph he took (on 17 or 18 January) which showed three cars at the front of the premises was not taken to record the presence of the cars, although they should not have been there, and he did not know how long they remained there. He took photographs of the container (on 17 or 18 January) because it should not have been there, its presence was abnormal.

As to the photographs he took on 17 or 18 January, he did not know which were taken on which day. He took “the first lot” with a 35 mm camera on the 17^th, and was not sure if he took the second lot on the 17^th or 18^th. He could not say if the photographs of the rear yard were taken on the 17^th or 18^th.

Billington was then directed to evidence in a supplementary witness statement of Gillies[5] that the container shown in Billington’s photographs was not present when they met on 17 January. Billington was asked if he agreed it would be more likely that the photograph showing the vehicle – by which counsel meant the container – were taken on the 18^th rather than the 17^th, to which he said that “It is quite possible”.
[5]Exhibit 2.

In further cross-examination Billington was asked as to subsequent events, including as to use of the plaintiff’s property by Toll Transport, and evidence of Nyilas on that matter. I do not disregard that evidence but will consider those matters when dealing with events subsequent to 17 January.

I turn then to the evidence of Gillies in cross-examination. In the process of vacating the plaintiff’s property, which went over three months, he attended the property probably once a week. In that period he noticed containers, trucks or forklifts in the rear of the plaintiff’s property and he saw trucks and containers going through the gap in the fence between the plaintiff’s property and Toll’s property. That was the way a truck could get a container into the rear area of the plaintiff’s property. He assumed that was the access used to move the contents of the warehouse on the plaintiff’s property to Toll’s property. With the hole in the fence, the area across the rear of both properties was like one big back yard.

As to the 17^th January, Gillies could not remember any cars in the front yard. To the best of his knowledge when he handed the keys over the site was vacant. Prior to the meeting he would have gone there and made sure that 100 percent everything was out of there, he would not have handed the keys over if something was still in the yard. He accepted that there could have been some rubbish there. Finally, Gillies said that he could not remember if on the inspection Billington said that he was satisfied that the premises were vacant.

It is necessary that I make some observations and findings concerning this evidence and the credit of these witnesses. In doing so I bear in mind the whole of the evidence in the case, that is of all witnesses, bearing on the use of the plaintiff’s property and related matters. In other words, in the assessments I make I do not consider the above evidence of Billington and Gillies in isolation but in light of all relevant matters. In the case of Billington that includes the futile attempt to obtain from Toll Transport a contribution to the re-surfacing of the yard and reinstatement of the fence on the southern boundary. It is not irrelevant in that context to bear in mind that if ARN Transport and/or Toll Transport had reinstated the fence which at the latest should have been immediately on vacating on 17 January, Toll Transport almost certainly would not have used the plaintiff’s property after 17 January 2002. In that event this litigation would not have arisen. This litigation can be seen to arise from Toll Transport taking advantage of the gap in the fence after 17 January and using the plaintiff’s property as it desired in the conduct of its business without either first agreeing with Beresford terms on which to do so or paying for the privilege.

Considering all matters, including his interest as an employee of or for the plaintiff, I found Billington to be an honest witness who sought to give evidence from his best present recollection. There is no doubt that he attended at the site on 17 January and met Gillies, and that he also attended at the site on the following day. I also accept that he took the photographs numbered 1 to 37 attached to his second witness statement which show three cars parked in the car park at the front of the premises and a large container on a trailer parked in the rear yard. I cannot determine which photographs were taken on which day. However his evidence was that the cars and container were present at the inspection on 17 January. I do not accept that his evidence that it was possible that his photographs showing the container were taken on the 18^th meant or must be taken to mean that the container was not present at the time of the inspection on the 17^th.

Gillies had a continuing interest as an employee of Toll. I concluded that his evidence in para 9 of his witness statement that he and Billington observed that the entire premises were free and clear of all items and that Billington said that the premises were vacant, was reconstruction designed to suit Toll Transport’s case. For one thing, putting aside the matter of the cars and the container, the entire premises were not free and clear of all items. The evidence, including the photographs, makes that clear. In addition to that overstatement, the oral evidence of Gillies indicated further over-statements of recollection. These reflect also on the reliability of the assertion in his second witness statement that the container was not present at the time of the inspection. I note the following. First, Gillies said that to the best of his knowledge he could not remember any cars in the front yard. Secondly, as to whether Billington said he was satisfied that the premises were vacant Gillies said:

(a)at transcript 220, that to the best of his knowledge the site was vacant,
(b)at transcript 222, that he could not remember if Gillies said that he was satisfied that the premises were vacant.

In the way that he gave this evidence, and in its terms, Gillies made apparent to me that his recollection was nothing as certain as that indicated in the absolute and unequivocal terms of his witness statement. This was made clear by his ultimate answer, given without any pressure in cross-examination, that he could not remember if Gillies said that he was satisfied that the premises were vacant.

It may be, as counsel for the plaintiff suggested, that having attended at the plaintiff’s property on the 17^th twice, Gillies’ memory was confused as to what he saw on the first occasion and what he saw at the time of the inspection with Billington. In other words the cars and container were there on the latter occasion but not the former. That may have contributed to his uncertain recollection.

I do not accept Gillies’ evidence that the entire premises were clear of all items. I far prefer and accept Billington’s evidence that the cars and the container were present at the time of the inspection. Other items were also present on the site, which Billington referred to in his second witness statement and oral evidence.

It is plausible and probable that the presence of the cars and the container produced in Billington the reaction he described. They were items which in the ordinary course of things Toll Transport would be expected to remove from the site, and promptly. I accept Billington’s evidence as to this. Furthermore, the items being so readily removable and not being in the area of make good items that needed attending to, they would not have caused Gillies any concern. Hence when Billington said that they needed to go there was little that Gillies would have said, or need have been concerned about.

I should note that at one stage in his submissions counsel for the plaintiff referred to Toll setting up “a sham arrangement” when Toll had no intention to abide by the lease and act appropriately on its expiration. The proposition that supported this was that Toll deliberately emptied the plaintiff’s property for the purpose of the inspection while intending thereafter to resume using the plaintiff’s property without permission. The premise of this alternative submission was that the container was not present at the time of the inspection. As I have found that it was, the premise is not established leaving the submission without its evidentiary basis. But, to be fair to counsel, he withdrew any suggestion of any sort of fraudulent conduct. He left it at this, that if vacant possession was given, the presence of the container on the 17^th or 18^th January underlined that there was a trespass shortly thereafter. That submission accorded with the pleaded case, whereas the former submission of a sham arrangement did not. As it was withdrawn I do not consider it further.

I turn now to consider whether in the circumstances Toll Transport gave vacant possession of the plaintiff’s property on 17 January.

It was common ground that in vacating the plaintiff’s property at the end of its tenancy Toll Transport was required to deliver vacant possession. In Waterhouse v Waugh[6] the Court of Appeal in New South Wales held this to be the obligation of the outgoing tenant, treating as applicable the like obligation on a vendor required to deliver possession under a contract for the sale of land. Also in Waterhouse the Court of Appeal accepted as applicable to the determination of what constitutes vacant possession the principle stated by Lord Greene MR in giving the judgment of the Court of Appeal in Cumberland Consolidated Holdings Ltd v Ireland[7] as follows:

“Subject to the rule de minimis a vendor who leaves property of his own on the premises on completion cannot, in our opinion, be said to give vacant possession, since by doing so he is claiming a right to use the premises for his own purposes, namely, as a place of deposit for his own goods inconsistent with the right which the purchaser has on completion to undisturbed enjoyment. … the right to actual unimpeded physical enjoyment is comprised in the right to vacant possession. We cannot see why the existence of a physical impediment to such enjoyment to which a purchaser does not expressly or impliedly consent to submit should stand in a different position to an impediment caused by the presence of a trespasser. It is true that in each case the purchaser obtains the right to possession in law, notwithstanding the presence of the impediment. But it appears to us that what he bargains for is not merely the right in law, but the power in fact to exercise the right. When we speak of a physical impediment we do not mean that any physical impediment will do. It must be an impediment which substantially prevents or interferes with the enjoyment of the right of possession of a substantial part of the property.”

That case concerned a vendor who had failed to give vacant possession of the property sold. He had left such rubbish on the property as to make it impossible for the purchaser to use a substantial part of it.

[6][2003] NSWCA 139.

[7][1946] 1 KB 264 at 270-271.

On the approach stated by Lord Greene MR and adopted in Waterhouse, “the obligation of a vendor to give vacant possession is not absolute and questions of breach must be judged as matters of substance”, as Handley JA (with whom Meagher and Powell JJA agreed) said in Smilie Pty Ltd v Bruce[8]. In Smilie the issue arose between vendor and purchaser, as it also did in Topfell Ltd v Galley Properties Ltd,[9] Point Glebe Pty Ltd v Lidofind Pty Ltd,[10] and Warringah Contractors Pty Ltd v Pike[11].
[8](1999) ANZ Conv R 412 at 414.
[9][1979] 1 WLR 446.
[10](1988) ANZ Conv R 521.
[11](1982) ANZ Conv R 304.

In my opinion, judged in the circumstances the presence on the plaintiff’s property of the three cars and the container on a trailer did not constitute an impediment that substantially prevented or interfered with Beresford’s enjoyment of the right to possession of his property or a substantial part thereof. In the first place Billington correctly appreciated that the cars and containers were readily removable. Acting reasonably, and having drawn Gillies’ attention to them, he expected Gillies would have them removed promptly. Nor did Billington have reason to consider that Toll Transport would thereafter breach Beresford’s right to vacant possession, at least not without first having obtained permission to do so. In the second place, the presence of the cars and container did not affect Beresford’s ability to use or let the property. While the property was on the market for letting, works were first required to be undertaken. Apart from cleaning up and make good works, there was the substantial matter of re‑surfacing the rear yard the scope of which work was not then settled upon in terms of suitability for a new tenant. For these reasons, even accepting the presence on the plaintiff’s property of the cars and the container on a trailer, Toll Transport did not breach the obligation to give vacant possession.

Finally, this conclusion has the consequence that the claim for double rent under s 10 of the Landlord and Tenant Act must fail. That is the for simple reason that possession was delivered up at the expiration of one month as stated in the notice, thus denying an essential element for the operation of s 10. I note that it was also submitted that the consequence of demanding rent from Toll Transport in respect of its on-going occupation of the plaintiff’s property, was that such occupation ceased to be in the character of a trespasser and became that of an approved user, which in law precluded the operation of s 10 or constituted a waiver of the right to claim double rent. It is not necessary to consider this additional submission.

Did Toll Transport use the premises after 17 January 2002?

It is undoubtedly the case that Toll Transport used the plaintiff’s property after 17 January until about 24 September when the replacement fence was being erected. The question of fact that arises is what was the extent and frequency of that use. I deal with that question in this section.

The conclusion contended for by the plaintiff is that Toll Transport made use of the plaintiff’s property throughout that period. In opposing this conclusion Toll Transport engaged in a mixture of the positive and the negative. In the first instance, in its defence it conceded use of “a small portion of the rear yard of the [plaintiff’s property] to temporarily place shipping containers, the number of which varied from time to time”, on seven specified dates in 2002. The negative was to submit that the evidence did not establish when, apart from those dates, such use commenced and ended. This was in the context of Toll Transport not having called evidence from its employees in charge at, or responsible for, Toll’s property in the subject period and thus the persons most able to depose as to Toll Transport’s use of the plaintiff’s property in that period.

In this context it is pertinent to note that initially para 7 of the defence alleged that Toll Transport remained in possession of the rear yard of the plaintiff’s property from 18 January 2002 to 30 September 2002 with the agreement, knowledge and consent of the plaintiff. Subsequently, by an amended defence filed in March 2006 para 7 was amended to allege, among other things, that Toll Transport vacated the plaintiff’s property on 17 January after which it “used a small portion of the rear yard of the premises to rest three or four shipping containers for a period of approximately two or three days in May 2002”. In view of the evidence to which I refer below it was not surprising that para 7 was amended at the trial to the effect stated at [13] above. The amendment sought to bring a touch of reality to an otherwise unsustainable plea.

I now refer to the relevant evidence. In the plaintiff’s case that was given by Billington, Andrew Watts who is an expert in aerial photography, and Douglas R Lane a real estate valuer. As mentioned earlier, Billington gave evidence as to what he saw and what occurred and photographs he took on 17 and 18 January 2002, and as to subsequent events. Watts gave evidence which explained what was to be seen on aerial photographs of the plaintiff’s property taken on the following dates in 2002, 15 February, 5 March, 26 June, 9 July and 27 August. Lane gave evidence which explained what was to be seen on photographs he took at the plaintiff’s property on 23 May 2002. Watts and Lane were not cross-examined and their evidence was not challenged. There is no reason not to accept their evidence, indeed it is implicitly accepted by Toll Transport. I accept the evidence of Watts and Lane. Furthermore, subject to the one matter as to whether photographs 1-37 were taken by Billington on 17 or 18 January 2002 it is not disputed, and I certainly accept, that he duly took those photographs and that they truly record what appears therein.

The evidence for Toll Transport that bears on use of the plaintiff’s property commences with Gillies insofar as it relates to what was to be seen on inspection on 17 January, but more particularly concerns the evidence of Nyilas and to a much lesser extent Padey who did not see the property at relevant times.

I now refer to the evidence.

An aerial photograph of the plaintiff’s property taken late morning on 15 February 2002 shows three cars parked in the car park on the west (or street) side of the warehouse, and a shipping container and a large trailer sitting to the east of the warehouse and near but inside the southern boundary. The photograph also shows Toll’s property, the approximately 50 metre gap in the fence on the southern boundary and a mix of approximately 17 trucks, trailers and shipping containers and approximately 10 cars on Toll’s property.

An aerial photograph taken on 5 March 2002 shows approximately 15 trucks, trailers and containers at the open area to the east (or rear) of the warehouse on the plaintiff’s property. It also shows two cars parked on the west side of the warehouse on the plaintiff’s property in the car park area at the front of the site. Some items appearing on the south east corner of the warehouse could be large bins.

Billington’s first visit to the site after 18 January was on 10 April when he saw that the yard was being operated from Toll’s property. He took photographs (attached to his second witness statement and numbered 40 to 47) depicting approximately 60 to 100 containers stored in the rear yard of the plaintiff’s property along with a truck laden with a container. These photographs, and the other photographs, vividly demonstrate how Toll Transport used the area at the rear of the warehouse on the plaintiff’s property as though it were part of its property.

On 11 April Billington spoke to Padey who advised having sent details regarding the make good works to her site manager. Billington said that they needed to talk about rent for the yard as he had been at the property and they were operating the rear yard from the next door site. In her witness statement Padey said that she had the impression that Billington was saying that this “spillover” had been occurring since 17 January. She said that she would make inquiries and, if any part of the rear yard was being used, a fair market rent would be paid for that use. Padey then sent an email to Rudy Nainie in which she requested the make good works be carried out, and advised that the landlord was going to charge additional rent for Toll storing containers on the site.

On 18 April Billington called Padey and left a message for her to ring him. It was at or around this time that Nyilas was given the responsibility of managing the make good works for Toll. He was responsible for the operation and management of approximately eight sites operated by Toll but had not previously been to the plaintiff’s property. In order to commence the task he rang Billington on 24 April. At Nyilas’ request Billington forwarded him a key to the property on 29 April.

On 1 May Billington attended at the plaintiff’s property with an engineer to investigate structural requirements for a lease to a prospective tenant. He again noted that the neighbouring operation (from the property to the south of Beresford’s) was continuing to utilise the rear yard of the plaintiff’s property.

On 3 May Billington telephoned Padey and left a message for her; she did not return the call.

Nyilas said in his witness statement that he first saw the plaintiff’s property, including the rear yard, in early May shortly after receiving the key. He said that the premises were empty and that there were no shipping containers in the rear yard.

On 7 May Billington sent the invoice for outgoings to 17 January, which was paid later in the month.

Billington visited the plaintiff’s property on 9 May and again noticed that the neighbouring operation from the south of Beresford’s property was utilising the rear yard of the plaintiff’s property. He telephoned or attempted to telephone Graham Holmes concerning the southern boundary fence. On 10 May Billington telephoned Padey and left a message that he expected to receive $16/m² per annum in relation to the yard.

Also on 10 May Tim Humphries, finance and administration manager for Toll Logistics – Industrial Division, sent an email to Nyilas, Padey and others in which, after referring to having received a call from Bruce Holmes and to the fence between the two sites being re-erected in the near future, said that “Apparently we are still utilising this yard as a parking area”. He requested that the yard not be used. If space was required additional arrangements would need to be made or they would be charged rent for the use of the yard.

On 10 or 11 May Nyilas attended at the plaintiff’s property and noticed three or four shipping containers from Toll’s property had been placed on the rear yard. Nyilas said, in his witness statement, that he instructed Geoff Semple, who was in charge of the warehouse at Toll’s property, to remove the containers to Toll’s property and to create a dividing barrier between the two properties by placing shipping containers along the gap in the fence in order to prevent any further use of the rear yard of the plaintiff’s property. Given that the shipping containers were not owned by Toll and had to be returned to the relevant shipping company within 10 days, he instructed Semple that any container removed from the “wall” be replaced by another container. Nyilas said that he returned later that day or the next day and noticed that his instructions had been carried out.

On 17 May Padey telephoned Billington and suggested $10/m² as the appropriate figure for occupation of the rear yard. Billington said that he would consider the offer and get back to her. Padey said in evidence that not having heard to the contrary she assumed that Toll Transport’s occupation had been continuous since on or around 18 January.

Billington and Nyilas met at the plaintiff’s property on 21 May. They discussed the make good works. In his witness statement Billington said that he again observed that the neighbouring operation was continuing to utilise the rear yard. On the other hand, Nyilas said in his witness statement that there were no containers in the rear yard.

On 23 May Lane attended at the plaintiff’s property and took five photographs one of which depicted the rear yard taken from a position looking approximately south east. The photograph depicts at least seven shipping containers and a container forklift in the rear yard of the plaintiff’s property.

On 29 May Nyilas told Billington that the make good works should be complete, except for the fence, at the end of the month. On 11 June Nyilas told Billington that the make good works had been completed and that the owner of Toll’s property had been told about the fence and that the property should be empty.

On 13 June Billington and Nyilas met at the property to review the make good works. Here again there is a conflict in the evidence, Billington saying that the neighbouring operation was continuing to utilise the rear of the plaintiff’s property and Nyilas saying that the wall of containers Semple had created remained in place and that the rear yard of the plaintiff’s property was clear.

On 20 June Billington wrote to Nyilas concerning the make good works, with a copy to Padey. The letter did not mention the matter of use of the rear yard.

Another aerial photograph of the plaintiff’s property was taken on 26 June. While the image was not clear enough to allow Watts to identify clearly whether features on the plaintiff’s property were containers or trailers there were three such items on the site.

On 3 July Billington sent Nyilas another key to the warehouse, he having lost the key previously provided, to enable completion of the make good works.

Another aerial photograph of the plaintiff’s property was taken on 9 July. This shows at least nine trailers, trucks or containers in the rear yard area of the site.

On 18 July Billington attended at the plaintiff’s property and noticed that the neighbouring operation was still utilising the rear yard of the property. The make good works were still not complete.

Nyilas said in evidence that the make good works were completed in mid-August and he sent Billington a facsimile on 21 August. He also returned the key to the premises to Billington. Billington wrote in response on 21 August, with a copy to Padey, requesting evidence that all of the works had been undertaken. He also said “that your adjoining operation has been illegally and without permission utilising and damaging the rear yard of the premises” since their “notional exit” from the premises on 17 January 2002. He noted his observation of such use on his last visit to the premises on 18 July.

In his witness statement Nyilas said that he was surprised at Billington alleging the make good work was not done. Noting that Billington did not state what work was outstanding and having discovered that the cost of re-surfacing the rear yard and re-erecting the fence was covered by an arrangement with ARN Transport, he had no confidence in Billington and regarded the letter as a “try on”. He spoke to Padey who said that she would deal with Billington.

Another aerial photograph of the plaintiff’s property was taken in the early afternoon on 27 August. The photograph clearly shows large items such as vehicles on the site at the rear (east) behind the warehouse. Watts said of this photograph that where vehicles are similar in shape or they have removable trailers or containers it is not possible to be correct in all cases as to what the item is. Thus understood, there were eight or nine trucks, trailers or containers parked in the rear of the site, mainly at the north east end. That is the farthest point on the plaintiff’s property from Toll’s property.

On 13 September Billington telephoned Padey and left a message requesting a response to his letter of 21 August and confirming that Toll was still using the yard on 27 August. He also rang Nyilas to discuss Toll paying the landlord compensation for use of the rear yard. In his witness statement Nyilas said that he had not seen such use since the “container fence” was erected. He told Billington that Padey was dealing with the issue.

On 24 September Billington attended at the plaintiff’s property and saw that work had commenced at the front of the site on erecting a fence on the southern boundary. By approximately 30 September the whole of the southern boundary was fenced and Toll had ceased to occupy the property.

On 7 October Billington telephoned Padey and left a message requesting a response to his letter of 21 August and his call on 13 September. Again his call was not returned. Nor did Padey return subsequent calls on 12 and 13 November. Furthermore, Billington said, there were other occasions when he unsuccessfully sought to speak to Padey on make good matters and the matter of Toll’s use of the plaintiff’s property.

Subsequently, in October and November, Billington sent the invoices referred to at [6(m), (n) and (o)] above. In her witness statement Padey said that she regarded the 14 October invoice for use of the rear yard as excessive as she considered $10/m² more appropriate. She said that she continued to assume that Toll Transport had occupied the yard continuously since on or about 18 January. She sent the invoice to Rudy Nainie (a Toll employee) and Nyilas. As indicated above, none of the invoices were responded to.

Before referring to evidence in cross-examination it remains to mention certain evidence of Watts and Nyilas.

Watts made the following general comments about the photographs of images he reported on, being the photographs taken on 15 February, 5 March, 26 June, 9 July and 27 August, as follows:

(a)the eastern end of the east-west boundary of the site is clear and as such vehicles etc can travel between the site and the land abutting the site to the south;
(b)the open land at the rear, east of the land abutting the site to the south, has constant activity and change; and
(c)the shadows relating to vehicles, trailers, containers etc demonstrate that those items have definite height.

Nyilas said that during the period of the make good works (May to August 2002) he attended the plaintiff’s property approximately twice a week in the early stages and once a week or a fortnight in the later stages. When the works concluded in August, to the best of his knowledge “there had been no use of the rear yard” of the plaintiff’s property from Toll’s property after the “container wall” was created by Semple “and that wall remained in place”.

Certain evidence given in cross-examination is important and to that I now turn.

Commencing with Billington, there was a container in the yard on 17 and 18 January, the photographs depicting the container being taken on one of those days. He did not know how many containers were in the yard on 13 June. Every time he went to the site there were one or more containers in the yard. The containers were moved by a forklift in Toll’s property. He had assumed that he would be able to sort the situation out. As to the invoice sent on 14 October, he assumed that Toll had used the yard since 17 January. The 15 November invoice was sent on legal advice. In re-examination he said that the 14 October invoice was sent in the belief that Toll’s occupancy had ceased on or about 30 September, no response had been received and they needed to reach agreement in relation to Toll’s occupancy.

It is convenient to next refer to Nyilas. He retired in early 2003. He did not keep a record of the dates on which he visited the site. He did however keep a record of when he met Billington and contractors at the site, which records he left with Toll when he ceased employment. As to whether there were containers on the property on his first visit to the site in the first half of May, Nyilas said:

“I wouldn’t swear on the Bible that there wasn’t any, but I cannot recall that there was any. The whole warehouse inside, outside, was empty, to my mind. Now if there was a container I cannot recall there was any.
It is just Mr Billington has given evidence that he was at the property on 1 May and 9 May and he says there were containers in the rear yard at that time, and you were at the property approximately around that same period. But anyway, your evidence is you can’t remember exactly what the yard was like? --- One thing I cannot remember exactly, the other thing containers are not like a piece of furniture you put them there and they stay there. Containers, they have a certain amount of time as demurrage, and they have to be removed after that time, in the same day, in the morning, they might have 10 containers, in the afternoon they might have 50, and as such you might go there in the morning and there are 10 containers, you go there in the afternoon and there isn’t any.
HIS HONOUR: They don’t sit still for very long? --- No, they don’t.
Costs you money if they do? --- Exactly, charge you immediate after 10 days.
Mr COSGRAVE: I assume you didn’t take any photos whilst you were at the premises Mr Nyilas? --- No, I think that was Ian Billington’s job.”

Nyilas was then referred to the email from Humphries on 10 May referred to above. This email was addressed to Nyilas and Warren Aron, and copied to others including Padey and Bruce Davis. Counsel asked Nyilas who Aron is to which Nyilas said:

“He was the manager directly in charge of the site although he was not stationed at the site.
Right? --- He was in charge of the site, adjoining site.
Sorry? --- The adjoining site which was still used by Toll.
Right. So he was the man in charge of the adjoining site? --- That is correct.
Right. So he was a Toll employee? --- Yes, he was also a Toll employee.
And Mr Davis? --- Davis was immediate boss.
Your immediate boss? --- One of immediate bosses.
Was he based at the site as well? --- Actually he was based at Dandenong where Warren himself was based at.
And was there someone else at the adjoining site who accepted day-to-day responsibility for running the site? --- The supervisor was Geoff Semple.”

Nyilas was then asked whether he accepted as accurate the statement in the email that Toll was using the yard as a parking area, and he responded:

“No, I went over to the site to have a look for myself, and I found it true, there were some, I don’t know, three, four or so containers, after I questioned I was told that they had a surprising large number of deliveries that day, and although he told the employees not to use the backyard of these premises, but because of the influx of containers they did use, what he also brought up as an excuse that all the employees who worked at the site, they were long time employees there, and they got used to it, that the whole area belongs to me, or belongs to us, and therefore they didn’t have that feeling imprinted in them that deeply that we are not allowed to go there. Although he explained that he did tell them that, and that is why I instructed them to remove those containers, and build a wall alongside that supposed fenceline, which for some reason hasn’t been installed by that time yet by the arrangement was supposed to be, I found out later between Ian Billington and Bruce Holmes I believe, or Graham Holmes, one of the Holmes.

In any event the suggestion was that part of the difficulty was that because they were long-standing employees they treated the two yards effectively as one, is that right? --- Yes, my personal feeling was that that fence should have been erected to prevent such thing occurring.
And the person who gave you this information, that was Mr Semple, was it? --- That is correct.
And do you recall roughly how many staff there were on the adjoining premises, Mr Nyilas? --- About 10 or a dozen.”

No objection was taken to this evidence of Semple’s advice, and counsel for Toll Transport did not suggest it could not be relied on. It is important to note that Semple, Aron and Davis did not give evidence.

Then, as to whether there were containers in the site when he and Billington attended there on 21 May, Nyilas said “I cannot recall”. He would say that there were no forklifts or trucks on the site as those vehicles are busy.

Nyilas was then asked who Lindsay Devlin was. Nyilas had referred to him in a conversation with Billington on 29 May 2002. Nyilas said that “By that time Geoff Semple [had] left Toll and Lindsay Devlin became the supervisor in charge of [Toll’s property]”. It is to be noted that Devlin did not give evidence.

Passing over but not overlooking evidence on the matter of what Billington had said to Nyilas as to restoration of the yard and repairing the fence, Nyilas was asked whether there were containers in the yard when they met at the plaintiff’s property on 13 June. As to that Nyilas gave the following evidence:

“I cannot recall, the only time I recall when I went over following Tim Humphries’ email to me and that I found container there. Other times I cannot recall seeing containers, whether that because at certain times I didn’t visit the backyard or maybe I didn’t pay too much attention to it because I didn’t look for containers, what I cannot recall. And certainly there would have been that, oh, there are containers in the backyard, I would think that I would remember that.
Well, I also suggest to you that at that visit of 13 June, the container wall covering the gap in the fence was not in place? --- I don’t believe that is so. I believe they were there. During the time when we looked at it there might have been container or containers missing from the wall because they were just the same like all the other containers they had to be moved at all times, but the instructions were to keep replacing them if they had to remove it.
HIS HONOUR: Would there always have been a sufficient number of containers sitting idle on the site? --- They didn’t have to be empty, containers have to come, allowed to stay for 10 days, and they weren’t necessarily unloaded on the same day when they came in, depending on when the client required, or when the client was able to make room for the goods to be transported to them. A lot of the goods what came in on the containers, they didn’t get stored in the warehouse itself, but they got unloaded and then on a truck delivered to the client, or distributed.”

Nyilas said, after being referred to Billington’s letter of 20 June, that by then Billington largely accepted that the make good works were done. After that time loose ends were tidied up, most of which related to documentation or matters inside the office or warehouse. He could not recall exactly whether by then he was not concerned with work in the rear yard, apart from afterwards being asked to level it off. However he immediately accepted that the discussion with Billington concerning levelling off took place in May, and agreed that by June he was no longer concerned with issues about the yard. For that reason he did not need to inspect the yard or concern himself with what was happening in it. The possibility was “always there” that there were containers in the yard when he visited, “and also by that time my visits to the site were fairly infrequent, and there were times when I visited only once a week, or even a fortnight”. As to the evidence in his witness statement of the frequency of his visits, it was probably only in May that he visited approximately twice a week, “later on it was becoming fairly infrequent”.

Then, looking at the photograph taken by Lane on 23 May, he said that the containers shown covered about half of the gap in the fence on the dividing line between the two premises. He agreed that the photograph taken on 9 July showed objects in the rear yard of the plaintiff’s property and no continuous line of containers creating a fence line. He then agreed that the photograph taken on 27 August showed eight or nine containers parked in the rear yard of the plaintiff’s property and no container line creating a fence between the premises.

Nyilas was referred to Billington’s letter to him dated 21 August and asked whether he disputed the continued use of the plaintiff’s property. He answered that as he had not been there all day every day he could not tell Billington that the plaintiff’s property had not been used. As he had been there on a number of times when “definitely there weren’t containers in the back yard, at other times I didn’t notice there are containers in the back yard. Somehow the coincidence was a bit too much for me”. Nyilas said that he recalled telling Billington that he should speak to Padey, as she was dealing with the issue. He told Padey his opinion that they (Toll) had done everything with the warehouse, and that he believed that Billington was “trying me on”, and “that she better take him on” because he believed it would go down a legal path.

Then, with reference to an email he received from Padey on 16 October in which Padey referred to Billington’s invoice for use of the yard, Nyilas said that he believed he told Padey that Toll Transport had not used the yard, he would be surprised if he had not.

Finally, I refer to evidence of Padey in cross-examination. She had visited the plaintiff’s property once in November or December 2000 in relation to deciding whether the property would be required or be surplus to Toll’s needs. She was not involved in the sale of assets and business agreement, but was involved in negotiating the licence agreement. Without overlooking her evidence in any respect I note only the following. Padey said that she did not take steps to check whether Billington’s statements in his letter of 21 August were right because the letter was sent to the business unit who were in a better position to do so than she as she was not on site. She had no recollection of asking anyone at the business unit. She also sent the October invoice to the business unit on the basis that if they had used the property they should pay for it, but she did not say to pay the $16/m². She also sent on the November invoices.

I now refer to counsel’s submissions.

Counsel for the plaintiff submitted that the overwhelming evidence was that Toll Transport used the plaintiff’s property from 18 January until 24 September 2002. In addition to the evidence of Billington there were the photographs and the equivocal evidence of Nyilas in cross-examination. Toll’s continuing use of the plaintiff’s property was to be understood in light of the prior combined use of the property and Toll’s property. That use commenced when ARN Transport removed the rear portion of the fence to use the rear area of both properties as though it was one area. It was extremely convenient to use the overall area, as Bruce Holmes said. On and from completion of the sale of asset and business agreement, when nearly all employees of ARN Transport continued their employment with Toll Transport at the same site, it was business as usual for employees and customers, as Bruce Holmes also said. Nyilas gave evidence to similar effect, that employees continued using the property as before. It was submitted that it was most likely that usage of the yard continued as it had been at the time of completion of the sale of business on 1 February 2001.

It was further submitted to be significant that from the time Billington raised the use of the plaintiff’s property Toll Transport never rebutted or took issue with his statements. Padey gave evidence to the effect that she would have done so if she had been told Billington was mistaken.

It was also significant that Toll Transport had not called evidence from any of the employees at, or responsible for, Toll’s property in the relevant period. In particular, without any explanation for not doing so, none of Semple, Devlin, Aron or Davis was called. In these circumstances, and in the context of the evidence of Billington, Holmes and Nyilas, it was more readily to be inferred that Toll Transport used the yard throughout the period.

Counsel for Toll Transport submitted that while the evidence showed some form of use of the rear yard on various days, as to the extent of which there was conflict, no other part of the plaintiff’s property was used or occupied. Billington did not demand that the use cease but sought payment therefor. The difficulty for the plaintiff in establishing its case was to establish when the use commenced and ended. As to the commencement, it was submitted that the evidence concerning 15 February hardly indicated a commercial use. It was clear that there was a substantial use in April. Then a container wall went up. On 24 September Billington gave evidence of fence works but did not refer to the presence of containers. Counsel concluded his submissions by referring to Jones and Dunkel[12] and several other cases[13] on the point that failure of a party to call a witness who might have given relevant evidence cannot be used to make up a deficiency of evidence or, to use the words of Gillard J in O’Donnell v Reichard “to fill in any gaps in the proof required”, or as O’Loughlin J said in Cubillo v Commonwealth “to convert conjecture into inference”. At the same time, however, it must be remembered, as Kitto J stated (at 308) in Jones v Dunkel:

“… any inference favourable to the plaintiff for which there [is] ground in the evidence might be more confidently drawn when a person presumably able to put the true complexion of the facts relied on as the ground for the inference has not been called as a witness by the defendant and the evidence provides no sufficient explanation of his absence.”

[12](1959) 101 CLR 298 at 312 per Menzies J.

[13]O’Donnell v Reichard [1975] VR 916 at 920 per Gillard J; Hampton Court Ltd v Crooks (1957) 97 CLR 367 at 371 per Dixon CJ; Tozer Kemsley & Millbourn (A’asia) Ltd v Collier’s Interstate Transport Services Ltd (1956) 94 CLR 384 at 403 per Fullaghar J; Dilosa v Latec Finance Pty Ltd (1966) 84 WN (Pt 1) (NSW) 557 at 582 per Street CJ; Cubillo v Commonwealth (2000) 174 ALR 97 at [353] per O’Loughlin J; and West v Government Insurance Office of New South Wales (1981) 148 CLR 62 at 69.

As to this, in Jones v Dunkel Menzies J, after stating that the absence of a witness cannot be used to make up a deficiency in the opponent’s evidence, stated:

“(ii) that evidence which might have been contradicted by the defendant can be accepted the more readily if the defendant fails to give evidence; (iii) that where an inference is open from facts proved by direct evidence and the question is whether it should be drawn, the circumstance that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference.”

In the present case Toll Transport offered no explanation for not calling any of Semple, Devlin, Aron or Davis. It was not suggested that they were unable to give evidence. Nor was it suggested that they could not give evidence relevant to the issue of use of the plaintiff’s property. Yet it was evident from the evidence of Nyilas that at least Semple and Devlin must have been able to give evidence on the issue of the duration and extent of the use of the plaintiff’s property. And Aron and Davis had responsibility for Toll’s property, which plainly extended to the matter of its proper use in relation to its neighbour, and, in the circumstances, it is reasonable to consider that they were aware of the claimed use of the plaintiff’s property. It was left unexplained why Nyilas, and to a most limited extent Gillies, was put forward as the witness on the issue. It was clear on her evidence that Padey distanced herself, indeed did not want to know, the detail of the use, regarding it as the responsibility of the business unit. In my view the inference is open and is reasonably to be drawn and I draw it, that she deliberately refrained from speaking to Billington as time passed by for the reason of avoiding being drawn into an issue that was the responsibility of the business unit.

I can say at once that I accept the evidence of Billington on this matter of use in preference to that given by Gillies and Nyilas. I have already dealt with Gillies and need say no more about him. It is seen, and I find, that the evidence of Gillies and Nyilas reflected Toll Transport engaging in denial of the truth as to its use of the plaintiff’s property. In each case the witness statement did not truly and fairly represent their evidence as to Toll Transport’s use of the plaintiff’s property, the consequent misleading being greater in the case of Nyilas. It is regrettable but unfortunately not uncommon that this sort of thing happens with witness statements carelessly prepared. I do not know and cannot speculate as to why or how the witness statement asserted facts and matters which Nyilas did not swear to, but, in fairness to him, I have carefully considered his evidence overall. Although on the matter of the presence of containers and the like on the plaintiff’s property I prefer Billington’s evidence, I accept Nyilas’ evidence quoted above as to the continual movement of containers, the persons with responsibility at and for the site, and Semple’s advice as to the use of the plaintiff’s property.

In accepting Billington’s evidence I find that the container shown in the photographs he took on 17 or 18 January was present on the plaintiff’s property on those days. I accept the evidence of Bruce Holmes as to it being “business as usual” on and from completion of the sale of asset and business agreement on 1 February 2001. That included the continuation of the practice of using the yard area to the rear of the warehouse on the plaintiff’s property and Toll’s property as one common area. The dividing fence east of the plaintiff’s warehouse was long since removed to enable and facilitate this use, and the use continued. From completion Toll Transport occupied Toll’s property as lessee and occupied the plaintiff’s property as I have described it until 17 January 2002 throughout which time such use continued. I accept as correct the statement of Bruce Holmes in his facsimile to Beresford dated 7 March 2001 that replacement of the fence “would impede the current use of the stores”.

It is perfectly understandable that following 17 January Toll Transport continued to use the plaintiff’s property. The fence was not replaced and the property was vacant. Past practice of long standing and convenience, and to which the work force was accustomed, was so simple to continue, and it was continued. Of course Toll Transport should have requested permission for ongoing use and only acted under agreed terms. In not doing so it wrongly took advantage of a situation.

While it is acknowledged that use was made of the plaintiff’s property, when did such use commence and end?

As I have said Toll Transport had a container on the plaintiff’s property on 17 and 18 January 2002. There were also three cars parked at the front of the property, which I find were parked by employees of Toll Transport. It is convenient to note that I make the same finding in respect of the three cars on 15 February and the two cars on 5 March 2002.

In its defence Toll Transport did not concede usage on 15 February on which latter date the aerial photograph shows a shipping container and a large trailer in the plaintiff’s property, as well as the three parked cars. Counsel said that this did not indicate a commercial use. This submission seemed to suggest that Toll Transport’s use was immaterial or to be disregarded if it was only a minimal intrusion on Beresford’s right of property. That cannot be accepted. To be fair to counsel his submission was directed to the issue as to the time on and from which the plaintiff had established use of the plaintiff’s property. It seemed to be said that if the use was minimal it was to be disregarded. There is a confusion in this submission for liability to pay for use of the plaintiff’s property is not to be measured by the extent of the use at any particular time on any particular day. It is plain that, and I find, Toll Transport made use of the plaintiff’s property on 15 February to park cars and place a container and trailer.

Thus far two dates – 18 January and 15 February – are established which the defence did not concede let alone acknowledge.

Use is conceded on 5 March and 10 April, the evidence being photographic and undeniable. Counsel for Toll described the use shown in April as substantial, as is that shown on 5 March in my opinion.

Then, accepting as I do the evidence of Billington, I find that Billington observed Toll Transport making use of the plaintiff’s property on 1 and 9 May. Neither of those dates of use were conceded let alone acknowledged in the defence. It is evident that the defence was drawn on the erroneous basis that anything that Billington said was false.

It would not be inconsistent with the continual movement of containers that when Nyilas first visited the plaintiff’s property in early May no shipping containers were in the rear yard, assuming that evidence to be correct. However I do not accept his evidence as indicating that Toll Transport was no longer using the plaintiff’s property for its purposes.

It is conceded in the defence that Toll Transport used the rear yard on 10 and 11 May 2002. That is based on the evidence of Nyilas which is consistent with use as described by Billington. But it was also the foundation for Nyilas’ story of instructing the placement of a container wall.

It is not conceded in the defence but it is the fact, as I find, that when Billington and Nyilas attended at the site on 21 May Toll Transport was using the rear yard on the plaintiff’s property. As to this occasion Nyilas said in cross-examination that he could not recall if there were containers in the rear yard whereas in his witness statement he had asserted that there were none. Not merely do I prefer Billington’s evidence but I reject as untruthful Nyilas’ evidence in his witness statement.

Confronted with the photograph taken by Lane, Toll Transport conceded use on 23 May.

The defence did not concede use on 13 June on which date Billington and Nyilas met at the property. Again Billington asserted, and Nyilas denied, use, Nyilas stating that the container wall was in place and the plaintiff’s property was clear. But in the cross-examination quoted above Nyilas said that he could not recall if there were containers in the yard. I am quite unpersuaded by his evidence, regarding it overall and carefully observing him give evidence, and regarding the sense in which he said that he could not recall, that since he (as he said he had) instructed the placement of a wall of containers on the boundary that a wall was always maintained in place. I reject as false his evidence that a wall was always in place. Among the relevant factors in this respect is the continual movement of containers, the greater facility offered by use of the plaintiff’s property and the subsequent established use thereof. I accept Billington’s evidence.

Toll Transport did concede use on 26 June and 9 July, doubtless because such use was established by photographs. It is implicit and shown by these photographs that a container wall was not in place to prevent use of the plaintiff’s property.

On 18 July, only a few days after the photograph was taken on 9 July, Billington observed continuing use of the plaintiff’s property. I accept Billington’s evidence. This was another instance of use not conceded in the defence.

The defence did however concede use on 27 August, again doubtless because it was established by photographic evidence.

The final step in the chronology is that at his visit on 24 September Billington observed that work had commenced on replacing the boundary fence. It is implicit in his evidence that he did not observe use of the plaintiff’s property. Counsel for the plaintiff submitted that Toll Transport’s use of the plaintiff’s property should be regarded as having continued up to that time.

Actual use of the plaintiff’s property is thus established on a date or dates in every month from January to September, but not in September. These occasions of actual use are established by personal observation or photographs. The observations were made and photographs taken at particular times and indiscriminately as to the dates in the sense that Beresford did not have Billington at the gate, or a camera in the sky, to watch for Toll Transport’s use of his property. But, being indiscriminate in that sense serves only to make the point that whenever one went to the site Toll Transport was using the plaintiff’s property. Further, the use was not by prior arrangement which serves to emphasise what is apparent on the evidence, namely that Toll Transport simply used the rear yard of the plaintiff’s property as an adjunct to, and as it wanted, in the daily conduct of its business. The evidence of Bruce Holmes and Nyilas provides the insight to this. I accept the evidence of Nyilas that the number of containers on the site – that is at Toll’s property and moved on and off the plaintiff’s property – was an ever moving feast, in the ordinary course of things, the number of containers and the rate at which they turned around being dependent on the flow of business from time to time. And, the plaintiff’s property being used as an adjunct, the extent to which it was used varied from time to time. I am satisfied, on a common sense understanding of the situation regarding the evidence overall, that from 18 January 2002 Toll Transport continued the pre-existing practice of using the plaintiff’s property in its business. Although the specific evidence of use is limited to the dates discussed, on the balance of probabilities I am satisfied on that evidence and the evidence concerning the continued practice of using the plaintiff’s property and the likelihood of the employees continuing such usage in their daily work and the ready convenience of doing so, that Toll Transport did continue such use of the rear yard of the plaintiff’s property throughout the period from 18 January.

The question arises as to the time when that usage ended. It seems to me reasonable in the circumstances to treat that usage as having finished at or about 24 September. Allowing a little time before that in view of the imminent commencement of fencing works I would conclude on 20 September as a reasonable assessment.

I arrive at these conclusions on the evidence and the inferences reasonably to be drawn in the circumstances. I have borne in mind that gaps in the evidence cannot be filled or covered by conjecture. I do not consider that to be the case. Indeed in my view the usage by Toll Transport throughout the period is overwhelmingly likely and evident and established by the facts and the inferences reasonably to be drawn therefrom. I add only that insofar as these conclusions rest on inference such inference is more readily to be drawn by reason of Toll Transport not having called as witnesses those whose evidence might have proved the contrary. At the very least it is to be considered that the evidence of those witnesses would not have assisted Toll Transport by throwing doubt on the correctness of the inference.

The question that then arises is, what is Toll Transport’s liability to the plaintiff in respect of its use of the plaintiff’s property?

Counsel for the plaintiff submitted that even though the specific usage of the plaintiff’s property was of the rear yard area, the plaintiff should be compensated in respect of the whole of the premises. That was because Toll Transport’s obligation was to give vacant possession of the whole property. Further, the owner of land is entitled to full use of all of the land. See Anderson v Bowles[14] and Henderson v Squire[15]. Here Toll Transport derived a substantial commercial benefit in using the land and the plaintiff is entitled to damages for such use. The normal measure of such damages is the rental value of the whole property for the period of wrongful use; see McGregor on Damages[16].
[14](1951) 84 CLR 311 at 319.
[15](1869) LR 4 QB 170.
[16]16^th Ed, para 15.03.

It is to be noted that Toll Transport’s use of the plaintiff’s property did not prevent Beresford from letting the property to another tenant. Beresford suffered no loss in that regard and no such loss was claimed. Counsel for the plaintiff submitted nevertheless that the plaintiff was entitled to recover the benefit of the whole of the property, referring in this respect to Lamru Pty Ltd v Kation Pty Ltd[17] where Cohen J held (at 439) that the owner of premises was entitled to the market rent from an occupying trespasser whether or not the owner was able or willing to let the premises to someone else in the relevant period.
[17](1998) 44 NSWLR 432.

It seems to me that while Toll Transport made some use of the car park at the front of the plaintiff’s property the real and substantial activity of which the plaintiff complains is the use of the rear yard. It was understandable that Billington’s first invoice was in respect of that use, not the incidental and insignificant use of the car park at the front of the property which on legal advice attracted the second invoice for the whole of the property.

When Toll Transport commenced to use the plaintiff’s property it did so as a trespasser, having given possession on 17 January. Thereafter it was said that its use was permitted, although on the basis of paying for its use and occupation so that the character in which it used and occupied the property changed. Counsel for Toll Transport conceded that from the point of view of the calculation of that which Toll Transport should pay in respect of its use and occupation it made no difference whether it did so in the character of a trespasser or in some other character in view of permission expressly or tacitly granted. Accordingly it is not necessary for me to consider the alternative bases in virtue of which it is alleged that Toll Transport became liable to the plaintiff.

It is common ground that in respect of the rear yard of the plaintiff’s property the amount payable for the use thereof is to be calculated at the rate of $10/m². In my view, for the reasons stated, the area in respect of which Toll Transport should pay is the rear yard, being the area which in a real and substantial sense it used.

What is the liability of the guarantors?

For the reasons stated the guarantors are not liable to the plaintiff.

Conclusion

There will be an order that the title to the proceeding be amended so that in lieu of the words in brackets after the name of the plaintiff there is substituted the words, “who sues as the executor of the will of Thomas John Beresford, deceased”. There will be judgment against Toll Transport and an order that it pay the plaintiff the sum calculated at the rate of $10/m² for an area of 4,836.25m² for the period 18 January 2002 to 20 September 2002 inclusive. The proceeding against the other Toll parties and against the guarantors will be dismissed. I will hear counsel on the terms of the orders and as to costs.

[2007] VSC 138

11 May 2007