Hyams Wholesalers Pty Ltd v Western Australian Planning Commission - [2010] WASC 48

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: HYAMS WHOLESALERS PTY LTD -v- WESTERN AUSTRALIAN PLANNING COMMISSION [2010] WASC 48

CORAM: HALL J

HEARD: 3 DECEMBER 2009

DELIVERED : 12 MARCH 2010

FILE NO/S: CIV 2784 of 2008

MATTER :Section 216 of the Land Administration Act 1997

BETWEEN: HYAMS WHOLESALERS PTY LTD (ACN 008 683 725)
Plaintiff
AND
WESTERN AUSTRALIAN PLANNING COMMISSION
Defendant

Catchwords:

Compulsory acquisition - Claim for compensation - Interest in land - Periodic tenancy - Whether term of lease varied - Whether equitable interest

Legislation:

Land Administration Act 1997 (WA), s 151, s 179, s 202, s 215, s 216, s 217, s 220, s 221, s 222

Result:

Plaintiff's claims dismissed

Category: B

Representation:

Counsel:

Plaintiff: Mr C P Shanahan SC
Defendant: Mr E M Heenan

Solicitors:

Plaintiff: Fiocco's Lawyers
Defendant: State Solicitor for Western Australia

Case(s) referred to in judgment(s):

Giumelli v Giumelli (1999) 196 CLR 101
Re Midland Railways Company's Agreement [1970] 1 Ch 568
Re Midland Railways Company's Agreement [1971] 2 WLR 625
Tooker v Smith (1857) 1 H&N 733
Wallis v Seamark [1951] 2 TLR 222
Walsh v Lonsdale (1882) 21 Ch D 9
Waltons Stores (Interstate) Ltd v Maher (1998) 164 CLR 387

HALL J: Between 1992 and 1997 the plaintiff leased premises in a building known as McLarens Chambers at 148 William Street, Perth. After the lease expired in mid‑1997 the plaintiff continued to occupy the premises pursuant to a holding over provision in the lease. No new lease was ever signed and the plaintiff was still in occupation as at 5 September 2003. On that date the defendant registered a taking order under the Land Administration Act 1997 (WA) (the Act). The effect of that order was to compulsorily acquire the land on which the premises occupied by the plaintiff stood and to convert all interests in the land into claims for compensation.
The plaintiff made a claim for compensation to the defendant pursuant to the Act in December 2003. That claim was initially rejected on the basis that it was said that the plaintiff did not have a sufficient interest in the land. The plaintiff then commenced these proceedings seeking a declaration that it is entitled to compensation and orders that the defendant assess the amount of that compensation and any interest payable on the amount.
By the time the matter came on for hearing the defendant had accepted that the plaintiff had a compensable interest in the land. The issue remaining was the nature of that interest. The defendant contends that the only interest held by the plaintiff was under the holding over provision of the original lease, that is a periodic lease of one month's duration. The plaintiff claims that the original monthly periodic tenancy created by the holding over provision was subsequently varied by agreement with the landlord such as to create a periodic tenancy of six months duration. Alternatively, the plaintiff claims that representations were made by an agent of the landlord which had the effect of creating an equitable interest in the land equivalent to a periodic tenancy of six months duration.
The issues for determination are:
1.As at the expiry of the 1992 lease what interest did the plaintiff have?
2.Was there any agreement to vary that interest or create a different interest?
3.Did any equitable interest in the land arise from representations, made by the landlord (or its agent)?
The evidence in this matter was not contested. It does not follow from that that there was no room for disagreement. The interpretation of the primary evidence and the inferences and conclusions that could be drawn from it were in issue.

Nature of the proceedings

Section 179 of the Act provides that:
On the registration of a taking order in relation to land ‑
(a)the order has effect according to its terms;
(b)if the order provides that the land is taken ‑ every registered and unregistered interest in the land not preserved under section 178(2)(a) is extinguished, and each person who formerly held such an interest has that holding converted into a claim for compensation under Part 10; and
For the purposes of pts 9 and 10 s 151 provides that the word 'interest' is defined to mean:
any legal or equitable estate or interest in land, including ‑
(a)native title rights and interests;
(b)interests or rights created under any written law; and
(c)the rights of a management body under a management order;
Section 202 provides that every person having any interest in land which is taken under pt 9 is entitled, subject to pt 10, to compensation for the interest from the acquiring authority. The 'acquiring authority' is the defendant.
In circumstances such as those that pertain in the present case the claim for compensation is required to be made within six months of the registration of the taking order: s 207. In this case a claim for compensation was executed on 11 December 2003 and served on the defendant on or about 16 December 2003, that is within the permissible time period. The claim stated that the nature of the interest was a 'monthly tenancy'.
Section 215 provides that if the acquiring authority disputes a claimant's title to the interest in land it must serve a notice within sixty days after service of the claim. Within that period, on 6 February 2004, the solicitors for the defendant wrote to the plaintiff stating that 'where leases have expired and tenants remain in possession on a holding over basis, their entitlement to occupy rests in contract only and is not a sufficient interest in land for the purpose of the compensation provisions in the LAA'. On this basis the defendant disputed that the plaintiff had an interest in land that was compensable under the Act.
Section 216 provides that a claimant who receives notice that their claim is disputed may apply to this court for an order:
(a)for a trial of any issues of fact the finding of which will be necessary to determine the question of title; and
(b)that any question of law arising from the dispute as to his or her title to the interest may be set down for argument in order to obtain the opinion of the court.
The purpose of proceedings under s 216 is to determine the question of whether a claimant has an interest in the land. The plaintiff does seek a declaration in this respect but it also seeks an order that the defendant pay compensation pursuant to s 202 of the Act. The defendant submits that the court does not have jurisdiction to make an order that compensation be paid at this stage. That, in my view, is correct. If the court determines that a claimant has a compensable interest in land the Act then provides for an assessment of that claim to be made by the acquiring authority.
Section 217(2) provides that if a judgment under s 216 confirms, in whole or in part, a claimant's title to an interest in land the acquiring authority is obliged within 90 days to cause the claim to be examined and a report made as to the value of the interest. Subsection 217(3) states that as soon as possible after such a report has been received the acquiring authority must serve on the complainant an offer of compensation with respect to the interest in land. It is only if a claimant rejects an offer of compensation, or if no such offer is made, that a claimant may institute an action for compensation or refer the claim to the State Administrative Tribunal: s 220 and s 221.
As I have earlier noted, by the time of the hearing of this matter the defendant had resiled from its original position that the plaintiff had no compensable interest in the land. The defendant accepted that there was such an interest but asserted that it was only a periodic lease of one month's duration.
It would appear from this that the defendant no longer maintained that the plaintiff had only a contractual entitlement pursuant to the holding over provision. This concession was correct. The effect of the holding over provision was to create a periodic tenancy which, in turn, is a type of lease (see definitions of 'periodic tenancy' and 'lease' in Property Law Act 1969 (WA) s 7). A lease is clearly an interest in land. What remains in issue is the terms of the periodic tenancy.
The declaration sought by the plaintiff in the originating summons is a declaration that the plaintiff is entitled to compensation for its interest in the land pursuant to s 202 of the Act. As is apparent, a declaration in those terms would not resolve the dispute between the parties. What is in fact sought is a declaration that as at the date of the taking order the plaintiff had a legal interest in the land being a periodic lease of six months duration or, alternatively, an equitable interest that was equivalent to a six month periodic lease.

What interest did the plaintiff have as at the expiry of the 1992 lease?

For many years the plaintiff operated its business from premises in Wellington Street. In or about 1992 Mr Walter Rueben Hyams, a director of the plaintiff, decided to relocate the business to the premises in William Street. Both the Wellington Street and William Street premises were owned by the same landlord and a lower rental was offered at the William Street premises. A written lease was prepared and subsequently entered into on 26 June 1992. That lease was for a term of five years commencing on 1 July 1992 and expiring on 30 June 1997.
The lease contained a holding over provision in the following terms:
6(f)That if the Lessee with the consent of the Lessor remains in possession after the expiration of the term or any extension thereof the lessee shall so remain as tenant from month to month at the monthly equivalent of the rent reserved by this lease for the period immediately proceeding the expiration of the term or such extension and on and subject to all the covenants, terms and conditions expressed and implied in this lease and on the part of the lessee to be observed and performed. Such tenancy may be terminable by either party by one (1) month's notice in writing to the other party.
The effect of this clause was to create a periodic monthly tenancy from the date of the expiry of the lease, namely 30 June 1997. The existence of this monthly tenancy was predicated on the landlord consenting to the plaintiff remaining in possession. That consent was confirmed by letter dated 2 July 1997. In that letter Mr Peter George, an agent for the landlord, confirmed that the landlord was prepared to allow the plaintiff to continue in occupation of the premises on a monthly basis. Accordingly, as at the date of the termination of the lease the plaintiff had an interest in the land being a periodic tenancy pursuant to which rent was payable on a monthly basis and the tenancy was terminable on one month's notice by either party.

Was there any agreement to vary the periodic tenancy or create a new one?

In his affidavit of 19 March 2009 Mr Hyams states that after the expiration of the lease in 1997 he accepted a monthly tenancy in an endeavour to obtain a lower rental. He states that he enjoyed a good relationship with the landlord. He believed that the landlord's agent, Mr George, considered the plaintiff to be one of the best tenants in the premises. He then states:
Due to the nature of the good relationship we were given reason to expect the tenancy was ongoing for some years and the lease agreement would have been available to us in due course as evidenced in the following correspondence.
He then refers to a number of letters from Mr George that relate to rent reviews in 1998, 1999, 2000 and 2001. On the basis of these letters it would appear that the rent was reviewed on an annual basis. The rent was increased following these reviews but continued to be payable on a monthly basis. None of these letters make any reference to the term of the tenancy or the notice required to terminate it.
Mr Hyams states that in the late 1990s Mr George indicated that the landlord wished to redevelop the land but assured the plaintiff that it would be offered new premises in any new development. In a supplementary affidavit sworn on 30 September 2009 Mr Hyams stated that the continuing monthly tenancy was advantageous to the plaintiff as it was able to continue occupying the premises on a much lower rental than would have been possible on a long term fixed lease. This appears to imply that the rent payable was discounted due to the lack of security of tenure.
Mr Hyams states that notwithstanding the lack of any extended security of tenure he had an understanding that the landlord valued the plaintiff as a tenant and wished it to continue to lease the premises indefinitely. He stated that the basis of this understanding was that he was friends with Mr Morrie Alter who he described as 'the head' of Alberni Pty Ltd, the landlord of the premises at the time. He said that
I felt with both Mr George's co‑operation and positive reassurances provided to me and my friendship with Mr Alter, the plaintiff's tenancy at 148 William Street Perth would always be secure for the long term. Further, I had knowledge of my business neighbours long term leases with the same landlord and felt secure given that this part of William Street was very difficult for the landlord to secure tenancies and consequently I could enjoy both security of tenure and yet at the same time enjoy a lower rent by refraining from entering into a long term fixed lease.
Mr Hyams also referred to a previous bad experience of the plaintiff in entering into a long term lease at other shop premises in Barrack Street in the 1980s. In respect of that lease the plaintiff had been subject to rapid rental and rate escalations and the business became unviable. That lease was subsequently assigned but the assignee went bankrupt leaving the plaintiff liable as assignor to pay a large amount of unpaid rent and rates. Mr Hyams stated that as a consequence of this experience
the plaintiff made it a matter of policy to be very wary of long term fixed leases which further guided my decision not to enter into a long term fixed lease after the lease of 148 William Street Perth expired in June 1997.
Mr Hyams stated that the plaintiff took advantage of its superior bargaining position to obtain terms that were favourable. He described this as follows:
The plaintiff took prudent and commercial advantage of the landlord's difficulty in obtaining tenants on William Street and it was the plaintiffs' deliberate decision to use this bargaining power to secure a lower rental at 148 William Street Perth with a periodic tenancy.
After the plaintiff's lease expired at 148 William Street Perth I approached Mr George on the above basis and advised him that the plaintiff would consider leaving 148 William Street Perth (even though the plaintiff had no alternate premises available). Mr George implored me to stay on an even lower rental and stated at the time that 'he didn't want to have empty shops'.
Mr Hyams also stated that from his dealings with other tenants in the area and with Mr George he learnt that all of the landlord's leases in the area contained a six month 'redevelopment or break clause'. His understanding of this clause was that if the landlord wished to redevelop the property it was obliged to give these tenants six months notice to quit. A similar clause had been contained in the plaintiff's expired lease. Mr Hyams considered that as the plaintiff was regarded as being as valued a tenant as those who had current leases containing such a clause then the landlord would give similar notice to the plaintiff notwithstanding that the plaintiff was on a periodic monthly tenancy.
In a further affidavit dated 27 November 2009 Mr Hyams referred to such a clause having appeared in the plaintiff's original lease at cl 9(b). That clause read as follows:
9(b)At any time from and including 1 January 1995 until the expiration of the term or any extended term of this lease (as the case may be) the lessor may give to the lessee six (6) months notice in writing terminating this lease or any extension thereof (as the case may be) and at the expiration of such notice the term or any extended term of this lease (as the case may be) shall cease and determine without prejudice to the rights of the lessor contained or implied in this lease in respect of any antecedent breach of the covenants and conditions on the part of the lessee herein contained or implied and without the lessor being liable to the lessee in any way for compensation or damages in respect of such determination and on the expiration of such notice the lessee will yield up the premises to the lessor in accordance with the covenants and conditions in that behalf contained or implied in the lease.
That clause needs to be read in the context of cl 9(a) which read:
Notwithstanding the provisions of s 13 of the Retail Shops Act this lease is entered into by the parties on a temporary basis pending the redevelopment by the lessor of the building of which the premises form part.
The purpose of cl 9 appears to have been to recognise that notwithstanding that the term of the lease was five years and that such term would be guaranteed by s 13 of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) there was a risk that redevelopment would occur within the term of the lease and that, accordingly, it might need to be terminated on six months notice. But for this clause during the currency of this lease the plaintiff would have been entitled to security of tenure for the five year term and any extension thereafter agreed to.
However, once the lease expired and the plaintiff continued in occupation pursuant to the holding over provision it is not apparent that cl 9(b) would continue to have any application either expressly or by implication. Since the plaintiff no longer had a fixed term measured in years it was not necessary for there to be a right of the landlord to terminate the lease on six months' notice. Should the landlord have wished to redevelop the property following the expiration of the lease it could presumably achieve its objective by giving the one month's notice required under the holding over provision. The holding over provision included a notice requirement of one month that clearly superseded any other notice requirements in the lease that might otherwise have applied in the holding over period.
Mr Hyams' assumption that the six month notice provision would apply to the plaintiff appears to be entirely based upon his belief that the plaintiff was a valued tenant and that other valued tenants had leases which contained a redevelopment clause similar to that referred to. However, this assumption obscures the very difference between the plaintiff and other tenants which the plaintiff had sought to take advantage of. The plaintiff had foregone the benefit of a fixed term lease to obtain a lower rental on a periodic monthly lease. Other tenants had not apparently taken that position. It is not clear why the plaintiff believed it should have the lower rental commensurate with a monthly tenancy and yet be entitled to the benefit of a longer notice provision in the event of redevelopment that was only meaningful in the context of a lease with a fixed term of years.
In his affidavit of 27 November 2009 Mr Hyams states that the basis for his belief that the plaintiff had the benefit of the six months redevelopment clause was statements made to him by Mr George. Mr Hyams states that Mr George:
made it clear to the plaintiff that absent any redevelopment of the land the landlord wanted to retain the plaintiff as a tenant at the premises in the longer term. This was reflected in the landlord's annual review of the applicable rent despite the plaintiff's tenancy during the plaintiff's holding over being periodical.

It was submitted that the implication was that the landlord was encouraging the plaintiff to continue on as a tenant until the property was redeveloped. If the plaintiff did so the landlord would ensure that the plaintiff was offered new premises in any new building. This, it was suggested, contained the implication that the plaintiff would receive at least six months notice of any termination of its tenancy.
Mr Hyams states that if the plaintiff had no greater security than one month then it would have sought alternative premises because such a transient interest in the land would have been insufficient and unrealistic to protect the plaintiff's commercial needs. Mr Hyams, however, maintains that the plaintiff acquired security of tenure based on its relationship with the landlord and on representations made by Mr George and also enjoyed cheap rent and that he considered this as having the 'best of both worlds'.
In regards to representations made by Mr George, Mr Hyams refers in his affidavit of 30 September 2009 to Mr George having advised him that the plaintiff and another tenant were 'his best tenants' and that if the land was ever redeveloped they would both be offered a site in any new redevelopment.
An affidavit of Mr George sworn on 25 June 2009 was also relied upon. Mr George said that he enjoyed a good relationship with Mr Hyams and considered the plaintiff as both one of the best tenants and the best businesses operating in the area. He stated that in the late 1990s the landlord had intentions of redeveloping the land and that during that time the landlord had reassured Mr Hyams that it would consider the offer of new premises to the plaintiff in any proposed new development.
At the hearing of this matter I expressed some concern as to whether the evidence as to the conduct and statements of Mr George could possibly support an inference that there was an agreement that the notice period was extended to six months or that the plaintiff had been induced to believe that it had been so extended. In those circumstances the plaintiff sought leave to adduce additional oral evidence from Mr Hyams. That leave was granted over objection from the defendant.
In oral evidence Mr Hyams said as regards Mr George:
He said that we, and our neighbour Paul Carroll, were the two best tenants of Pacific Shopping Centres tenancy in the CBD. That's what he said to me. And he said if we have any redevelopment which wasn't clear at that stage we would certainly be desirable as a tenant in that completed redevelopment which never went ahead as explained (ts 27).
A little later Mr Hyams said:
I think at one stage he did mention and basically when I ‑ at several times I would have said over a period that we would ‑ we required lower rental and he then ‑ he said ‑ he implored us to stay because he didn't want to have empty shops, and I can't give you a context or a time for that because it goes back quite a way.
Mr Hyams said that on the basis that he and another tenant were described as being the two best tenants he understood that the plaintiff had an enduring tenancy and that was why the plaintiff continued to stay at the premises. He said that he was not privy to any redevelopment plans of the landlord and only discussed that topic with Mr George on the occasion when Mr George said that he would give the plaintiff the opportunity of coming back to the redeveloped site.
Mr Hyams said that at the expiration of the lease Mr George:
Was happy for us to stay on and he said yes you are a good tenant. We want you there and we were doing ‑ we were one of three shops that sort of were very compatible; one at the end of Wellington Street, one in Barrack Street in fact two and the one in William Street and it co‑ordinated very well and that suited us and he like us staying there (ts 29).
Mr Hyams said that Mr George encouraged the plaintiff to stay:
He said you are good tenants and he was having problems letting some of the shops out. The economic situation had deteriorated. We felt some effects of it too but ‑ and that's why we tried to get a lower rental from him which we had achieved and didn't want us to leave he made it quite clear to me … He made the statement to me and as I said implored us at one stage and I can't remember the timeframe here … He said we don't want to have empty shops that's what he said to me (ts 30).
In about 2002 Mr Hyams decided to seek a new five year lease. He said in his affidavit of 19 March 2009 that the reason for this was that he intended to continue the business at the premises for at least a further five years. After that time he intended to offer the business for sale. However, a new lease was not pursued by Mr Hyams as he was seriously injured in an accident on 17 September 2002 and was hospitalised for many weeks. Mr Hyams' wife did approach the landlord regarding a new lease at around this time but was told that the landlord was not prepared to execute a new lease. There is no evidence as to why the landlord took that position, but it appears to have been a considered one.
What I conclude on the basis of the evidence is that after the expiry of the lease the plaintiff decided to continue in occupation on a periodic tenancy. This decision was a commercial one based upon the ability to obtain a lower rent. Mr Hyams weighed this against the risk of a lack of security of tenure but considered that risk to be a low one bearing in mind the state of the market. He was conscious that the plaintiff was a good tenant, was valued by the landlord and that the landlord would have difficulty finding replacement tenants. Mr Hyams' decision was influenced by his assessment of prevailing economic conditions and comments made by Mr George were a reflection of those objective circumstances. Whilst Mr George no doubt expressed a positive opinion about the value of the plaintiff as a tenant, that did not ever extend to either an express or implied agreement that the notice period for the periodic tenancy would be extended to six months.
The connection between Mr George's statements regarding the plaintiff being offered new premises in the event of redevelopment and the redevelopment notice period contained in the original lease is not one that is reasonably open. There was no basis upon which Mr Hyams could ever properly have assumed that simply because Mr George expressed an opinion that the plaintiff would be a desirable tenant in a new development that the landlord would therefore give the plaintiff six months notice of any intention to terminate the tenancy. At best what Mr George was representing was that the plaintiff would be offered the option of new premises in the event of a redevelopment.
For these reasons I conclude that the evidence does not establish that the plaintiff and the landlord agreed to vary the monthly tenancy or create a new tenancy of six months duration. Indeed, the only conclusion that is reasonably open on the evidence is that the plaintiff continued to occupy the premises on a monthly tenancy for many years because it was commercially advantageous for it to do so.
At the hearing of this matter the defendant sought to also argue that it was not possible at law to have a periodic tenancy where the notice period was longer than the period of the lease. The defendant argued that a lease of this nature is characterised by the periodic payment of rent. It was suggested that a notice period that is longer than the period of the tenancy is repugnant to the lease. In this regard the defendant relied upon Tooker v Smith (1857) 1 H&N 733 and comments made by Somerville LJ in Wallis v Seamark [1951] 2 TLR 222 (225 ‑ 226). However the defendant also recognised that it is possible for there to be an agreement to vary a lease which would give effect in equity to a longer term pursuant to the rule in Walsh v Lonsdale (1882) 21 Ch D 9. The plaintiff argues that the parties to a periodic tenancy can contract as between themselves as to what notice is required to terminate and such notice may be different from that which the law would otherwise imply: Re Midland Railways Company's Agreement [1970] 1 Ch 568 (Foster J) 573, affirmed in Re Midland Railways Company's Agreement [1971] 2 WLR 625. However, given the conclusion I have already reached that there was no agreement, either express or implied, to provide the plaintiff with six months notice of termination in the holding over period it is unnecessary to determine this issue.

Did any equitable interest in the land arise from representations made by the landlord (or its agent)?

I have already canvassed in some detail the evidence that the plaintiff relies upon in this regard. Though described in the affidavits and in the proceedings as representations, the statements of Mr George are much more accurately described as expressions of opinion. There is no doubt that the plaintiff was a valued tenant and that the landlord's agent made this view clear to the plaintiff. The impression given was that the landlord was content for the plaintiff to continue in occupation subject to the rental being reviewed and agreed from time to time. The view of the landlord appears to have been as much based on objective facts as sentiment. The plaintiff's business was profitable, it was apparently prompt in its rent payments and had operated its business from the city for a long time. The objective factors also encompassed market conditions including a lack of demand from alternative tenants.
Where a landlord represents to a tenant that a lease will be granted or induces a tenant to assume that a lease will be granted and the tenant acts to his or her detriment on that representation or assumption and to allow the landlord to depart from that representation or assumption would be unconscionable the landlord will be estopped from denying the existence of a lease: Waltons Stores (Interstate) Ltd v Maher (1998) 164 CLR 387.
In this case the plaintiff asserts, in the alternative, that if there was not an agreement to a six month periodic term then it had an equitable interest in the land equivalent to such a periodic lease arising from its reliance upon the representations made by Mr George. I have already noted that to describe the representations as such is not accurate, but this is not necessarily fatal to such a claim. A claim in equity may exist where the landlord has by act or conduct induced the tenant to adopt an assumption.
In Waltons Stores Brennan J said:
In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs (428 - 429).
The evidence of Mr Hyams is that the plaintiff did assume that it had a periodic tenancy of six months duration, or at least that it was entitled to six months notice to quit. What is more problematic is whether such an assumption was induced or acquiesced in by the landlord. It should first be noted that there is no suggestion that the defendant in these proceedings induced or acquiesced in anything. In this regard the plaintiff's claim in equity is against the landlord and not the defendant. The plaintiff's case appears to rely upon the suggestion that the defendant has assumed the equitable obligations of the landlord. Whether or not this might be true of an equitable lease it appears to be a much more doubtful proposition in regards to equitable estoppel.
Any claim based upon equitable estoppel is one that relies on the premise that it would be unconscionable for the landlord to terminate the plaintiff's periodic tenancy on anything less than six month's notice or to resile from an offer of premises in a new development. However, even if such a claim was established it does not give rise to an interest in the land that would bind a third party. The relief that a court may grant in response to equitable estoppel is discretionary and may be an order to make monetary compensation: Giumelli v Giumelli (1999) 196 CLR 101.
In this case it is far from clear that even if the plaintiff had a claim in equity as at the date of the taking order it was one that would necessarily have resulted in any court called upon to adjudicate upon it exercising its discretion to grant the plaintiff the proprietary interest that it now claims. Any such equity could conceivably have been protected by an order that the landlord pay the plaintiff some monetary sum representing the value of the equitable interest.
Whilst it is true that s 179 has the effect of extinguishing interests, including equitable interests, in the land as at the date of the taking order and converting them into claims for compensation this does not mean that every claim in equity which relates in any way to the land can give rise to a right to compensation. In order to qualify the claim must be capable of being characterised as an 'equitable estate or interest in land': s 151.
It would be surprising if the consequences of unconscionable conduct by a previous owner could be visited on the acquiring authority. The defendant in this case, it should be noted, is not alleged to have induced any assumption on the part of the plaintiff nor itself acted in any way unconscionably.
In any event the case for the plaintiff has a more fundamental problem. It is a very large step to proceed from the general expressions of opinion made by Mr George to find that there was an inducement to the plaintiff to continue in occupation of the premises. It is no doubt true that the plaintiff relied upon the landlord's good opinion of it as a tenant. It is also no doubt true that the landlord wished the plaintiff to continue in occupation. However, it is impossible to distil from the evidence any inducement offered by the landlord. Even if there was an inducement it was the promise of premises in any new development, not an extended term. The consequence of any such inducement would be that the landlord would be estopped from refusing to offer new premises if redevelopment had occurred. However, such an equitable interest would be of no assistance to the plaintiff in this case. In any event I do not accept that the actions and statements of the landlord and its agent can properly be characterised as an inducement.
Nor is it apparent that the landlord or its agent were ever aware that the plaintiff assumed it had a six month tenancy, that the landlord was required to give it six months notice and that the landlord acquiesced in the plaintiff's adoption of that assumption. Accordingly, even if equitable estoppel could be the foundation of any equitable interest in the land compensable under the Act, which may be doubted, the evidence in this case is inadequate to establish such an interest.

Conclusion

As at the date of the taking order the plaintiff had an interest in the land. That interest was as the lessee of a periodic monthly tenancy terminable on one month's notice pursuant to the holding over provision of the 1992 lease. As at the date of the taking order the plaintiff's compensable interest was the balance of the current monthly term remaining at that point. The plaintiff's claims to either a legal or equitable interest equivalent to a periodic lease of six months duration are, therefore, dismissed.
I will hear from the parties as to whether it is necessary to make a declaration in regard to the interest I have found to exist and as to the appropriate form of the orders to be made.