GF & KC Zoch v WC Burke

IN THE SUPREME COURT
OF QUEENSLAND
  No. S 6499 of 1999
Brisbane
Before Mr Justice Ambrose
[GF & KC Zoch v WC Burke]
BETWEEN:              GEOFFREY FRANCIS ZOCH AND KAREN CHRISTINA ZOCH
  Applicants
AND:  WAYNE CHARLES BURKE
  Respondent

REASONS FOR JUDGMENT - B.W. AMBROSE J.
Delivered the 28th day of September 1999

This is an originating application for :
(1)a declaration that an oral arrangement entered into between the applicants and the respondent is not a “contract of tenancy” within the meaning of the Property Law Act s 153 and:
(2)a declaration that the Attorney-General and Minister for Justice does not have jurisdiction to appoint a mediator pursuant to the Property Law Act Sch 5 Pt 1 on the ground that there is no “contract of tenancy” between the applicant and the respondent.
The respondent opposes the making of the declarations essentially on the ground that whether or not the oral arrangement referred to in the application constituted a “contract of tenancy” within the meaning of s 153 of the Property Law Act is a matter which ought be determined by the mediator already appointed to determine the respondent’s claim for compensation under s 156 of the Property Law Act 1974.
Division 6 of the Property Law Act 1974 substantially re-enacts the Agricultural Holdings Act 1905 now repealed.
There is a substantial dispute between the applicants and the respondent concerning the content and nature of “the arrangement” in respect of which the applicants seek their declaration. 5 The respondent asserts that for some time prior to the acquisition by the applicants on 9 July 1997 of a parcel of land having an area of about 35.7 acres at Bunney’s Lane at Kin Kin, he had by arrangement with the former owners grown beans on about eight acres of that parcel. He says that in September 1997 he had a discussion with the male applicant (“the applicants”) concerning his continued use of that eight acre area of land to grow a further crop of beans and also to establish on it a banana plantation. According to the respondent the applicants advised him that he could still use the land to grow beans. He then raised with them the question as to whether he might also grow bananas on that land and informed them that once established the banana plantation would have a productive life of between eight and ten years.
The respondent asserts that an agreement was made with the applicants that he should have a tenancy commencing after the crop of beans then growing had been harvested and that presumably the eight acre portion of the land then under a crop of beans, could be used to grow bananas. It was agreed that all the outlays and expenses of establishing and maintaining the banana plantation would be borne by the respondent who would retain all profits from the banana crop. The tenancy over the eight acre area would be for eight to ten years. The precise term was not agreed.
In consideration of the grant of that tenancy the respondent agreed that he would complete fencing of the 35.7 acre area of land upon which his eight acre plantation would be established, that he would keep the whole of the 35.7 acres of land clear of weeds, that he would spray the land for noxious weeds and slash it and that he would mow between the existing trees on the land (presumably not within the eight acre site upon which he was to establish his banana plantation) and finally that he would plough the land to the extent necessary to enable the applicants to plant trees on it. Presumably, although it is not clear from the terms of the affidavit the land to be ploughed to permit the applicants, to plant trees was outside the eight acre area over which they agreed he should have his tenancy. The respondent asserts that because of the work he undertook to do for the benefit of the applicants it was agreed that no rental would be payable in respect of the eight acres of land upon which he could establish his banana plantation.
According to the respondent a month after this “agreement”, he discussed with the male applicant the preparation of a lease; the applicant said that that could be worked out later.
The respondent says that in June 1998 he again spoke to the male applicant and asked him about the preparation of the lease document and was informed that it would be sorted out when the female applicant came to the land.
The respondent asserts that he commenced to plant his eight acre banana plantation on 27 September 1997 and completed that work on 18 October 1997.
He did a great deal of work and incurred significant expense in establishing this banana plantation.
The respondent asserts that he did all the work for the applicants that he had undertaken to do when the “tenancy agreement” was made.
According to the respondent on 23 March 1999 the male applicant told him that he must leave the land immediately. The applicant complained that the respondent had not been performing adequately the work he had undertaken to perform in lieu of paying rent. After that discussion the applicants refused to permit the respondent to enter the land or to do any work on his eight acre banana plantation. Indeed, according to the respondent when he was evicted from the land by the applicants, he was in the course of actually harvesting some of his bananas. The applicant refused to permit him to continue to harvest the bananas and indeed according to the respondent much of the banana crop has since been harvested by somebody else. The respondent says he has not received any money for bananas harvested after his ejection from the land. Some of the bananas which have not been harvested appear to be rotting and the condition of the banana plantation has deteriorated.
According to the male applicant he had a discussion with the respondent in September 1997 when the respondent requested his permission to grow “small crops” after the crop of beans then growing upon an eight acre area had been harvested and to use another 10 acre “front block” to grow two consecutive “small crops”.
According to the applicants permission to grow two “small crops” on the 10 acre “front block” was given in consideration of the respondent clearing that area of weeds and undergrowth prior to planting the two consecutive small crops. When those crops had been harvested the respondent would “return” the whole of the 10 acre block to pasture.
According to the applicants it was in September 1997 that they gave permission to the respondent to grow bananas on the eight acre block (upon which there was then a bean crop growing) for a period of five years on condition that he slashed and sprayed weeds on the whole of the property (except for certain forest areas). The total area he was required to spray and slash (apart presumably from the eight acre block upon which he was to establish his banana plantation) was at least 20 acres and he was also required as consideration for that permission to maintain the roads and fences. He was not required to pay rent or make any other payment in relation to the land for which the applicants might be liable as owners.
According to the applicants the respondent was not given “exclusive occupation” of any part of the property - including the eight acre area upon which he established his banana plantation.
According to the applicants in about mid-March 1998 the respondent asked for permission to grow bananas for seven years. They refused their permission.
In about March 1998 the male applicant says that he informed the respondent that he did not wish him to grow any further small crops on the 10 acre “front block” but eventually the respondent persuaded him to permit him to plant a third crop which was apparently harvested in June/July 1998.
Without going into detail, the applicants assert that the respondent simply failed to keep his side of the bargain concerning the slashing of weeds etc. on the property. They also assert that the banana plantation was badly neglected. The male applicant says that he was so dissatisfied with the respondent’s failure to do what he had undertaken to do in return for permission to grow crops and establish a banana plantation on the applicants’ property that he “terminated the arrangement” and asked the respondent to leave the property. According to the applicants, the respondent did remove his equipment within a week.
It is unnecessary I think for me to descend to a more detailed analysis of the quite different versions of the “arrangement” given by each of the male applicant and the respondent.
The uncontradicted evidence of the respondent is that he was forcibly ejected from “his” eight acre banana plantation on 23 March 1999 without any prior notice purporting to determine whatever tenancy he may have held and that he accepted this ejection.
By letter dated 16 April 1999 the solicitors for the respondent gave notice of intent to claim compensation “for improvements effected to your property” -- during the term of “the tenancy” pursuant to s 160 of the Property Law Act 1974”. It was stated that the notice was provided on the basis that the respondent had been evicted from the applicants’ property on 23 March 1999 without prior notice. All told the total claim for compensation under the Act was $399,062 for “improvements effected to your land”.
The largest part of the claim is in respect of Item 11 of Pt 2 of Sch 4 of the Property Law Act 1974 designed to implement s 156 of that Act.
By far the largest component of this claim for compensation was the value attributed to the banana plantation at that time in the sum of $353,680.
On 21 April 1999 the solicitors for the respondent gave notice in accordance with Sch 5 of Pt 1 of the Property Law Act 1974 of the respondent’s requirement for the appointment of an arbitrator to be nominated by Queensland Law Society. Apparently the solicitors for the applicants declined to agree to the appointment of an arbitrator on the basis that the respondent had no claim for compensation because he had “no tenancy in writing and at the very least is a tenant at will”. The solicitors for the applicants advised that should the respondent seek the appointment of an arbitrator it was proposed to apply to this Court to have the appointment declared null and void.
On 28 April 1999 the applicants gave the respondent one month’s notice to quit their land.
It emerges from subsequent correspondence which I do not propose to analyse that the respondent conveyed his concern at the way “his” banana plantation was being run and also that the bananas on it were being harvested and apparently being sold without any of the proceeds of sale being given to him.
On 4 June 1999 the Attorney-General and Minister for Justice and Minister for Arts nominated an arbitrator to determine the respondent’s claim pursuant to Sch 5 of Pt 1 of the Property Law Act 1974.
The applicants seek relief by declarations, without descending to an analysis of the conflicting evidence or taking the benefit of any oral evidence with cross-examination. They contend that on the material it could not be said that “a contract of tenancy” as defined in s 153 of the Property Law Act ever existed because under that section “a contract of tenancy means a letting of a holding for a term or for lives and years or from year to year under a contract” and that the “arrangement” to which the respondent deposed does not as a matter of statutory construction come within the definition of “contract of tenancy” with s 153(1) of the Property Law Act 1974.
It is contended that the “arrangement” between the applicants and the respondent at the most could amount to a “tenancy at will”. Indeed it is said that it was never agreed that the respondent would have exclusive occupation of the eight acre banana plantation site and that therefore the arrangement should not be treated as having produced any tenancy at all but merely a licence pursuant to which the respondent was permitted to grow bananas - presumably at the will of the applicants - during a period which would not exceed five years, or upon the respondent’s version of “the arrangement” up to eight years. It is contended that the authorities indicate clearly enough that even if an agreement of the sort asserted by the respondent was made, the failure to have a formal lease executed - and presumably registered - means that the most that the respondent can assert is that he was a tenant at will and that being the case did not come within the protection of Div 6 of the Property Law Act. Such a contention is perhaps supported by ss 129(1) and 137(1) of that Act and perhaps by Pt 9 of the Land Title Act 1994.
Both the applicants and the respondent seem anxious to pursue the path each has chosen to the exclusion of that chosen by the other.
Undoubtedly this Court has jurisdiction to make a declaration of the sort which the applicants seek. In this respect I refer to Farrow v Orttewell [1933] 1 Ch 480.
There is obviously a substantial dispute between the applicants and the respondent which requires a determination of the facts in dispute relevant to its resolution. Upon my examination of the material so far advanced it seems impossible to determine whether in fact the “tenancy” or “arrangement” pursuant to which the respondent established his banana plantation on the applicants’ land with the applicants acquiescence was “terminated” by the purported Notice to Quit delivered 28 April 1999 or whether the respondent was simply ejected from the land as he asserts on 23 March 1999 without being given any Notice to Quit. It may be questionable what would be “a reasonable period” for a notice given under s 137(1) in the circumstances of this case where the plantation might have a life of eight years.
Although it was argued on behalf of the respondent that he might have an equitable lease in the sense of a right to get an order for the specific performance of the agreement pursuant to which he expended so much time and money establishing his banana plantation, it seems on the material unlikely that the agreement to which the respondent deposes was of a kind that would be specifically enforced. Undoubtedly the land upon which the banana plantation was established could be sufficiently delineated. The consideration for the granting of a “lease” of that land (assuming the term was sufficiently defined) was of a kind which would require a constant supervision of the respondent at the instance of the applicants which “would be impossible for any court”. Relief by way of specific performance of the lease agreement and/or any other relief by way of damages or injunction depending upon the enforceability of the contract at the instance of the respondent, would seem unavailable for the reasons given in J.C. Williamson Ltd v Lukey and Mulholland (1931) 45 CLR 282 - and particularly at 293 per Starke J and at 297 per Dixon J.
On the material advanced by each side to support its case I find it impossible without the benefit of further evidence and in particular cross-examination of each of the parties on their radically different assertions of fact to arrive at any conclusion as to what the real facts are to permit embarkation upon a consideration of the interesting points of law raised. For example the applicants gave to the respondent a “Notice to Tenant”dated 28 April 1999 pursuant to s 129(1) of the Property Law Act 1974 requiring him to “deliver up possession of the premises -- which you hold of us at tenant, at the expiration of one -- month next following the giving of this notice”.
While that document of course may not be inconsistent with the assertion that the respondent at that time was only the tenant at will of the applicants it does seem to me to be inconsistent with their assertion that he was merely their licensee without any right to exclusive possession of the land upon which he had established his banana plantation. Moreover the failure to give such a notice one month prior to the ejection of a tenant at will would seem arguably at least, ineffective to determine that tenancy at will already determined by ejection of the tenant more than one month earlier. Further a month’s notice given presumably pursuant to s 129(1) which in effect alters the former law by which a yearly tenancy might be implied by payment of rent does not necessarily limit the “reasonable period” of notice required to terminate a tenancy at will by s 137(1) and (2). I refer in particular to the express provisions of s 137(3)(c) in this regard.
While I am unpersuaded in the circumstances that I ought exercise my discretion on the material presently available to make a declaration of the sort which the applicants seek, I am conscious of the wasting nature of the improvement constituted by the establishment of the banana plantation on the applicants’ land by the respondent and what would seem to be the injustice of permitting the applicants to take full advantage of that banana plantation and exclude the respondent from any sort of benefit which his work and investment has made available to the applicants as a consequence of their ejectment of him from their land without giving him any notice at all.
In my view the dispute between the applicants and the respondent could best be resolved if the applicants were required to deliver a statement of claim pleading with precision their version of the agreement made with the respondent and then pleading the legal consequences of that agreement for which they contend in so far as the respondent’s right to compensation under the Property Law Act 1974 is concerned.
When that pleading is delivered to the respondent he should then deliver a defence in which he pleads his version of the agreement and the rights to compensation it gives him (if any) under Div 6 of the Property Law Act 1974. It occurs to me that he may also wish to counterclaim in the alternative for relief on the basis that the “arrangement” between him and the applicants pursuant to which he spent so much time and money establishing his banana plantation gives him rights to compensation or damages or even an injunction irrespective of whatever rights he may or may not have under Div 6 of the Property Law Act in the event that a court determines that there was not “a contract of tenancy” created within the meaning of s 153 of that Act. If the applicants’ contention be correct that the agreement did not provide for an exclusive possession of the eight acre banana plantation by the respondent it may be that it did amount to a licence to use the land for that purpose for five years - or for that matter for eight years - which in the circumstances became irrevocable while the respondent performed his side of the agreement - the circumstances being the considerable effort and expense incurred by the respondent in establishing his banana plantation from which the applicants have prevented him from taking any real benefit. It may well be that questions of estoppel etcetera can be raised. In such a counterclaim the respondent might also seek an account of moneys received by the applicants from the sale of bananas taken from the plantation which he established. This matter has already been canvassed in correspondence between his solicitors and the solicitors for the applicants.
If as the applicants asserted when they gave him a Notice to Quit, the “arrangement” with the respondent amounted merely to a “tenancy at will”, that would not of course permit them to do that of which the respondent complains. Undoubtedly, I should have thought, the arrangement involved the applicants giving the respondent a licence to establish and maintain his eight acre banana plantation on their land for at least five years and perhaps eight years. It is clear that a wrongful revocation of that licence - assuming it was not revocable at the will of the applicants and indeed not revocable at all at least while the tenancy at will subsisted because it accompanied the giving to the respondent of an interest in land for consideration, then the respondent would clearly have a right to bring an action for damages for breach of that agreement. See in this respect Kerrison v Smith [1897] 2 QB 445.

Undoubtedly this Court has jurisdiction to make a declaration of the sort which the applicants seek. I would be inclined to make such a declaration in preference to allowing the matters canvassed by the applicants to be ventilated only before the arbitrator appointed by the Attorney-General and Minister for Justice with the right then for the applicants or the respondent to appeal against any error in law that might be found in that award. That is the suggestion made on behalf of the respondent.
On the other hand I am quite disinclined to make a declaration on the only affidavit material placed before me so far which is untested by cross-examination. As I have indicated, a declaration could most usefully be made after a proper consideration of the evidence which will obviously be conflicting in significant respects called by the applicants and the respondent as to what precisely was the arrangement. The determination of this issue is essential to the determination of what legal consequences flow from it.
In my view the whole dispute will best be resolved if the relevant facts are properly pleaded and investigated upon evidence subject to cross-examination. When the facts are determined, proper consideration may then be given to the legal consequences of the proved “arrangement”. The interests of justice require that this whole matter be determined in this Court upon proper pleadings rather than before an arbitrator who may upon the whole of the evidence be persuaded that upon facts canvassed before him that the applicants’ contention is correct and the respondent had no more than a tenancy at will terminable only upon reasonable notice and/or a licence whether revocable or irrevocable in March 1999 for between five and eight years which led him to establish his banana plantation. The arbitrator would not of course in those circumstances have any right to give the respondent the relief which this Court could give. Indeed, if a proper investigation of the facts discloses that there was an agreement which might be enforced in this Court even though the respondent might not have a right in the circumstances of the case to claim compensation under the Property Law Act, his right might be to claim damages as a wrongfully ejected tenant and/or licensee and to seek an account of monies received by the applicants from the sale of “his” bananas.
It is unnecessary to speculate as to what avenues for relief may be available to the respondent should he persuade the Court to accept his version of events in preference to the version of events given by the applicants.
I therefore direct that within 28 days the applicants deliver a statement of claim which complies with Pt 3 of the Uniform Civil Procedure Rules 1999 and which pleads with precision the facts relevant to obtaining the relief which they seek in their application for declaration filed on 8 July 1999. I direct that the respondent within 28 days of delivery of the statement of claim deliver his notice of intention to defend and defence to that statement of claim which pleads with precision the facts upon which he relies to oppose the granting of the relief sought by way of declaration in the statement of claim and otherwise complies with Chapter 6 of the said Rules. Should the respondent seek any relief in the alternative of the sort to which I have already referred then that relief should be claimed by way of counter claim in the defence and all facts relevant to the granting of that relief should be pleaded with precision.
The applicants must deliver any answer to that defence and counterclaim within 14 days, complying with the requirements of the Uniform Civil Procedure Rules 1999. Any reply to such an answer must be served within 14 days of service of such answer.
After pleadings have closed and discovery has been completed, should either party seek a reference to mediation or case appraisal to which the other party refuses to agree, a party may refer that issue to me or to a judge in Chambers upon seven days notice in writing to the other party.
I give each of the parties liberty to apply upon seven days’ written notice to the other party.
I reserve the question of costs.
IN THE SUPREME COURT
OF QUEENSLAND
  No. S 6499 of 1999
Brisbane
Before Mr Justice Ambrose
[GF & KC Zoch v WC Burke]
BETWEEN:              GEOFFREY FRANCIS ZOCH AND KAREN CHRISTINA ZOCH
  Applicants
AND:  WAYNE CHARLES BURKE
  Respondent
REASONS FOR JUDGMENT - B.W. AMBROSE J.
Delivered the 28th day of September 1999
CATCHWORDS: LAND AND TENANT - Oral arrangement for lease - application for a declaration that arrangement entered into between the parties is not a “contract of tenancy” within s 153 of the Property Law Act 1974 and that the Attorney-General does not have jurisdiction to appoint a mediator pursuant to Sch 5 Pt 1 of the Property Law Act 1974 - whether appropriate to grant relief without the benefit of further evidence and cross-examination of each of the parties where radically different assertions of fact are made - whether arrangement amounted to either “a contract of tenancy” or a grant of
tenancy-at-will and/or a licence to be determined upon pleadings to enable Court to grant appropriate relief upon a proper resolution of factual matters in dispute
Farrow v Orttewell [1933] 1 Ch 480.
J.C. Williamson Ltd v Lukey and Mulholland (1931) 45 CLR 282
Kerrison v Smith [1897] 2 QB 445.
Property Law Act 1974
Uniform Civil Procedure Rules 1999
Counsel:  Mr S Sheaffe for the applicant
Mr L Galloway for the respondent
Solicitors:                  Beston & Co for the applicant
  Cartwright Richardson & Stringer for the respondent
Hearing Date:           28 July 1999

[1999] QSC 234

28 September 1999