Lukas v Browne

[2019] NSWSC 222

Supreme Court

New South Wales

Medium Neutral Citation:	Lukas v Browne [2019] NSWSC 222
Hearing dates:	7 May 2018 - 8 May 2018;13 February 2019
Date of orders:	07 March 2019
Decision date:	07 March 2019
Jurisdiction:	Equity
Before:	Darke J
Decision:	Plaintiffs make out case of equitable estoppel in relation to grant of lease.
Catchwords:	ESTOPPEL – equitable estoppel – plaintiffs and defendants executed form of written lease – the term of the lease not included in form – whether defendants made representations that the lease would be for 5 years with the possibility of a 10 year term being offered later – clear representations held to have been made – whether plaintiffs relied on representations – detriment – estoppel made out – plaintiffs entitled to a lease for a term of 5 years
Legislation Cited:	Residential Tenancies Act 2010 (NSW)
Cases Cited:	Doueihi v Construction Technologies Australia Pty Ltd (2016) 92 NSWLR 247 Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 Giumelli v Giumelli (1999) 196 CLR 101 Sidhu v Van Dyke (2014) 251 CLR 505 Sullivan v Sullivan (2006) 13 BPR 24,755; [2006] NSWCA 312 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
Category:	Principal judgment
Parties:	Paula Lukas (First Plaintiff) Michael Camilleri (Second Plaintiff) Daniel Kenneth Browne (First Defendant) Sally Browne (Second Defendant)
Representation:	Counsel: Mr P R Glissan (Plaintiffs) Mr D C Eardley (Defendants)   Solicitors: Shoal Legal (Defendants)
File Number(s):	2017/154687
Publication restriction:	None

Judgment

Introduction

1. The plaintiffs, Paula Lukas and Michael Camilleri, by their Amended Summons dated 29 May 2017, seek a declaration that they are entitled in equity to a lease of a 52 hectare property in Falls Creek for a term of 5 years commencing on 13 August 2016. The plaintiffs are currently in possession of the property.

2. The plaintiffs contend that their entitlement arises by the operation of an equitable estoppel. The estoppel is said to be based upon a number of oral representations made by the defendants up to and at the time of the execution by the parties of a standard form Residential Tenancy Agreement in respect of the property on 31 July 2016. The plaintiffs allege that various representations were made to them to the effect that the term of the lease would be 5 years, or at least 5 years.

3. However, the executed agreement did not provide for any term of the agreement. The form was left blank in the space provided for that purpose. Further, even though a starting date of 13 August 2016 was written in, no ending date was nominated. On its face, therefore, the agreement provided for a periodic tenancy rather than a fixed term tenancy for the purposes of the Residential Tenancies Act 2010 (NSW). Both defendants, Daniel Browne and Sally Browne, are named as parties to the agreement as landlords, although Daniel Browne was the sole registered proprietor of the property at the relevant time.

4. The versions of the negotiations concerning the proposed lease given by the plaintiffs on the one hand, and the defendants on the other, are markedly different. The lease was negotiated between the parties without the involvement of any real estate agent. No solicitors were engaged. There is very little in the way of documentary evidence of the negotiations, save for a few emails or text messages, most of which were sent some months after the plaintiffs went into occupation of the property. Each of the parties gave evidence and was cross-examined. In addition, the plaintiffs called three witnesses, each of whom gave evidence that was capable of corroborating aspects of the plaintiffs’ version of events.

5. As the case was conducted and presented, there was little dispute as to the applicable legal principles. In essence, the case was fought on the question whether the plaintiffs had successfully made out a case on the facts that fell within the principles of equitable estoppel as described by Brennan J (as his Honour then was) in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428-9. The defendants submitted that the plaintiffs had failed to make out such a case. They contended that no representations were made that there would be a lease for a five year period, and thus no representations upon which the plaintiffs could rely and thereby suffer detriment.

6. It is convenient to commence by referring, in some detail, to the evidence adduced.

Summary of evidence

7. The Falls Creek property was described by Mr Browne in the following terms:

The property is a rural property with a main house and an attached flat. There is [a] reasonably large machinery shed open at the front. The property is fenced on all boundaries. I had run a few cattle on the property from time to time but did not actively pursue any livestock or other farming endeavours on the land. There was no agricultural activities such as cropping taking place on the land and it was pretty much just grassy fields left in their natural state.

8. Falls Creek is located south of Nowra.

9. In mid-2016 Ms Lukas and Mr Camilleri were living on a rural property they were leasing at Meroo Meadow, north of Nowra.

10. Mr Shane Usher who, with his wife, conducts a business known as Usher’s Rural Services, deposed that in about May 2016 he delivered some hay to the Meroo Meadow property and became aware that the plaintiffs were “looking for another farm on a long lease”. Mr Usher deposed that in about June 2016 he went to Mr Browne’s Falls Creek property. Mr Usher says that during the conversation Mr Browne said words to the following effect:

I’m moving to Mackay. Sally’s got a full-time job there, and I’ve got a job in the mines, and I have to leave here in a couple of weeks. I’m looking for a tenant here. It’ll be a 5 years lease, with a possible 10 years. I’ll never sell this place because it’s been handed down in the family. I don’t want tenants in and out.

11. Mr Usher says that he passed this information on to the plaintiffs, and gave them Mr Browne’s telephone number.

12. Mr Browne deposed that Mr Usher came out to the Falls Creek property at about the end of June 2016, on which occasion a conversation to the following effect took place:

Mr Usher:   Is it ok if I can store my tractor in your shed and I will pay for the space I take up of course?

Mr Browne:   A year ago you could have, but nar mate, were [sic] packing up to go to Qld.

Mr Usher:   What are you going to do, sell the joint[?]

Mr Browne:   We will, but going to rent it out for a year first to see if we like it up there, and buy if we do, if we don’t (like it) we will come home, (we) had someone out last weekend to look, they seem keen.

Mr Usher:   I know a couple that might be interested, I will give them your number.

13. Mr Camilleri deposed that after Mr Usher gave him Mr Browne’s contact details, he telephoned Mr Browne and a conversation to the following effect took place:

Mr Camilleri:   I heard you have a property your [sic] considering coming up for rent for 5 years or so.

Mr Browne:   Yeah mate, were [sic] moving to Mackay and looking for someone that would take on a long term lease, if your [sic] interested come down mate, and have a look around.

14. Mr Browne deposed that there was a telephone conversation with Mr Camilleri in which there was a discussion about leasing the Falls Creek property. He says that after telling Mr Camilleri about the place, and speaking briefly about moving to Queensland, the conversation continued:

Mr Camilleri:   How long is the lease for?

Mr Browne:   Yeah looking at renting the place out for a year first, we may extend the lease, depends on what we do, buy up there if we like it. Sal and I have a five year plan but if we don’t like it up there we will come home, this is what I also told the other couple that have looked at my place.

15. It seems that shortly thereafter Ms Lukas and Mr Camilleri came to the Falls Creek property to have a look at it. Mr and Mrs Browne were both in attendance on that occasion.

16. Ms Lukas deposed that this visit occurred on about 20 June 2016. She deposed that prior to being taken on a tour of the property by Mr and Mrs Browne, Mr Browne said words to the following effect:

I have actually accepted a 5 year working contract in the Mines in Mackay QLD so we’re looking for the right tenants that we know will stay here and look after the place for at lease [sic] that time, we don’t want to lease it out to tenants that don’t love the place, and want to move out after 12 mths, it’ll be too hard for Sally and I to keep returning to inspect the place and re-lease it.

17. Ms Lukas deposed that following the tour there was a further conversation as follows:

Mrs Browne:   We really need to find tenants that ‘love’ the property so we can be comfortable knowing we have found tenants that will actually commit to a long lease.

…

Mrs Browne:   We rent the 4 Bedroom Flat to Foxville, there [sic] a lovely bunch of 5 Asian guys, they don’t speak a word of English, they rent it for $550 a week and their lease with us runs out in February.

Ms Lukas:   And the rent for us, for the main house and entire property is $1100 a week?

Mrs Brown:   Yep, that’s it, for the whole lot of it.

…

Mrs Browne:   When the Asians lease runs out in February (2017) the Flat then becomes part of the property and will form part of your new lease, if you’s [sic] decide to take it, so after February you can do whatever you’s [sic] want with it, you can keep the Asians in there and then you will receive their rent, or you can kick them out and do whatever you want with it, it’s yours to decide then.

18. Mr Camilleri also deposed that this visit occurred on about 20 June 2016. Mr Camilleri deposed that Mr Browne spoke about accepting a 5 year contract in Mackay and then continued:

We want tenants that we know will stay here and look after the place for ages without moving, we don’t want to lease it out to tenants that don’t love the place, and want to move out after 12 mths, it’ll be too hard for Sally and I to keep coming back to inspect the place and re-lease it.

19. Mr Camilleri stated that at one point Mrs Browne said words to the following effect:

No worries, we’re not in a huge hurry, but we’re really glad you’s [sic] like it, we think youd [sic] love it here, and it works in well that you want a long lease and we need someone that wants one.

20. Mr Browne deposed that the visit occurred in July 2016, not on 20 June 2016. He denied that there was any conversation in which he spoke about accepting a 5 year contract in the mines in Queensland. He deposed that at that stage he was still in the process of organising work, and it was not in the mines. Mr Browne deposed that there was a conversation to the following effect:

Mrs Browne:   We want a tenant that will look after the place while we are gone like we do, we are offering a small lease to start off with, and if we like it in Qld we can discuss extensions.

Ms Lukas:   It’s for a year right and might extend, that’s what Mick told me.

Mrs Browne:   It will be a 1 year lease to start with and if we like it in Qld we will discuss longer leases. Dan and I would like to give it a proper go in Qld for ourselves and look at five years, but that’s only a small plan between Daniel and I at the moment.

Ms Lukas and Mr Camilleri:   Ok we will think about it.

Mrs Browne:   I also want to keep it a small lease as we might not like living up there fulltime, and want the option to come home, that’s why we are leaving furniture behind in the house, and a lot of our possessions in the old shed.

Ms Lukas:   I can understand that.

21. Mr Browne deposed that there was discussion about the lease on the flat that expired in February 2017. He says that Mrs Browne said “if we can afford to let go of its income, we will let any tenant obtain a rental income from it, but we would need to know who would be renting it first”, and Ms Lukas agreed to this.

22. Mrs Browne deposed that the visit occurred on 3 July 2016. She deposed that the conversation commenced as follows:

Mrs Browne:   We want a tenant that will look after the place while we are gone like we do, we are offering a small lease to start off with, and if we like it in Qld we can discuss extensions.

Ms Lukas:   How long[?]

Mrs Browne:   If ok with any tenant it will be for 1 year lease as periodical to start with and if we like it in Qld we will discuss longer leases, Dan and I would like to give it a proper go in Qld for ourselves and look at five years, but that’s only a small plan between Daniel and I at the moment.

Ms Lukas and Mr Camilleri:   Ok we will think about it.

Mrs Browne:   I also want to keep it a small lease as I might not like living up there fulltime, and want the option to come home, that’s why we are leaving furniture behind in the house, and a lot of our possessions in the old shed.

Ms Lukas:   I can understand that.

23. Mrs Browne deposed that there was a discussion about the lease of the flat that expired in February 2017. Her evidence was to similar effect of that given by Mr Browne. Both Mr and Mrs Browne denied that there was any discussion at this meeting about a 5 year rental agreement.

24. There were some other divergences between the respective versions of the conversations, including in relation to what Mr Browne said about the prospect of him selling the Falls Creek property in the future.

25. On the following weekend, Ms Lukas and Mr Camilleri came to the Falls Creek property again. Ms Lukas deposed that a conversation to the following effect occurred:

Ms Lukas:   We love the place, we are very keen but I just want to know we’re all on the same page, so the Lease is a minimum of 5 years?

Mrs Browne:   Yes, honestly we will probably never come back, so its at least for that time.

Ms Lukas:   And the flat becomes ours in February 2017, because I’m actually thinking of repainting it and decorating it and turning it into a Holiday Accommodation Stay, I reckon we would make a good income from it?

Mrs Browne:   Yep everything, the entire property and the flat is yours to do whatever you want with, I’m sure you’ll look after the place and love it like your own, that’s all we want.

26. Mr Camilleri deposed that on this occasion he spoke to Mr Browne and Ms Lukas spoke to Mrs Browne. Mr Camilleri deposed that Mr Browne said words to the effect:

Mr Browne:   Mate, we just want someone to rent the place that will look after it, stay here for a long time and that’s it. Its $1100 per week for the whole place, that includes the 4 Bedroom Granny flat which becomes yours in February (2017) when the Asians lease runs out, they pay $550 per week, if they stay the rent from that will be yours, if they go, you can rent it out or do whatever you want with it, you can make good money from it mate.

27. In relation to this second visit, Mr Browne deposed that in response to questions from the plaintiffs about the lease, it was stated that he and his wife wanted “one year to start with”.

28. On 27 July 2016 (at about 3:19pm) Mrs Browne sent a text message to Ms Lukas in the following terms:

Hi Paula

Just wondering how keen you guys are??

If not need to know so we can let these other people know

We are more happy for you to have the place as you seem like us, but looks like we are going sooner rather than later

Dan just needs to know to round everything up before he goes to his new job

The realestate should have the contracts drawn up shortly on agreements

The other couple are pushing us for an answer

Much prefer you guys to be honest!!

29. Ms Lukas deposed that soon after receiving the text message she telephoned Mrs Browne and had a conversation with her to the following effect:

Ms Lukas:   I just want to confirm, again, that the 4 Bedroom flat was included in the $1100 per week rent and would become ours at the end of February?

Mrs Browne:   Yes, of course, I’ve already told you that silly

Ms Lukas:   I just need to be very clear about everything

Mrs Browne:   All good, you can trust us

Ms Lukas:   Then, Yes, we will accept the 5 Year Lease thank you so much

Mrs Browne:   Then can you please send me a written acceptance of the Lease, don’t worry about the terms, but make sure you detail the amount of $1100 because we need to get the other lot (referring to other parties wanting to accept the lease) off our backs, as they don’t believe us that we have accepted a tenant already.

30. Mrs Browne sent another text to Ms Lukas at about 3:47pm in the following terms:

Thanks Paula, I feel alt [sic] more relaxed knowing its you guys!!!!

31. Mrs Browne sent yet another text message to Ms Lukas at about 5:33pm in the following terms:

How do you both feel about a private rental, just to save us all some cash

Then dan and I would come down once or maybe twice a year to have a few beers with you

32. Ms Lukas deposed that she and Mr Camilleri reluctantly agreed to enter into a “private lease arrangement” rather than a lease arranged through a real estate agent.

33. In the evening of 28 July 2016 Ms Lukas sent an email to Mrs Browne in the following terms:

We are pleased to confirm acceptance of Lease at 120 Falls Road, Falls Creek NSW 2540. We agree to pay the rental amount of $1100.00/week.

34. Ms Lukas and Mr Camilleri went to the Falls Creek property again on 31 July 2016. There is no dispute that a Residential Tenancy Agreement was signed by the parties on that occasion, but the accounts of what was said differ markedly.

35. Ms Lukas deposed that Mrs Browne printed a form of Residential Tenancy Agreement from the internet. Ms Lukas deposed that as she was signing the document she had a conversation with Mrs Browne to the following effect:

Ms Lukas:   What date should I write in for the entering date and vacate date?

Mrs Browne:   Well in fact, Dan has just been offered a further 5 Yr contract in the Mines in Mackay on top of his already accepted 5 Yrs. So honestly we are considering probably staying there for the 10 years now, how would you feel about staying here all that time?

Ms Lukas:   Awesome, god I’ll buy it before then.

Mrs Browne:   Look why don’t we just leave the vacate date open, we all know its at least 5 years, but if Dan fits in well in his new job and me and the boys love it up there, we’ll be happy to offer you a 10 year lease we’d love to know someone here that loves it and will look after it, so why don’t we just leave the vacate date open for now, and we’ll fill it in later, and I’ll email you a copy when we settle in?

36. Mr Camilleri deposed that on this occasion Mr Browne said words to the following effect:

I’ve been offered another 5 year work contract in the mines on top of the 5 years I’ve already agreed to, so you could probably stay for 10 years if it works out for us.

37. Mrs Browne agreed in her affidavit that Ms Lukas asked her what “end date” should be put in. Mrs Browne says that she replied:

None

38. She deposed that it had already been discussed between the parties that she and her husband wanted “to leave it as periodical” in case they wanted to come back home. She denied that there was any conversation about her husband getting a ten year contract.

39. Mr Browne gave evidence to the same effect. He agreed that Ms Lukas asked about what “end date” should be put in, and he said that his wife replied “None”. Mr Browne also deposed that it had already been discussed between the parties that they wanted “to leave it as periodical” in case they wanted to come back home, and he denied that there was any conversation about him getting a ten year contract in the mines. Mr Browne deposed that he had “only just secured casual work with a small company helping them to relocate a shed”.

40. On 2 August 2016 Mrs Browne sent a copy of the signed agreement to Ms Lukas by email. The email included the following:

I’ve put in the date 11/8/16 for first payment (bond) being $1100, then weekly from that point on.

41. As noted earlier, the agreement that was signed did not provide for any term, and only a starting date had been written in.

42. The plaintiffs in fact moved into the Falls Creek property on 19 August 2016. It seems that Mr and Mrs Browne moved out on the same day, and presumably travelled to Queensland shortly thereafter.

41. Mr Usher deposed that a couple of days before Mr Browne moved out they had a conversation in which Mr Browne said:

I have just signed up Mick and Paula for 5 years, with an option of another 5 years.

44. I note that two other witnesses called by the plaintiffs, namely, Robert Day and Hayden Camilleri (the second plaintiff’s son), gave evidence about an occasion on about 6 August 2016 when they attended the Falls Creek property with Mr Camilleri. They each gave evidence that they heard Mr Browne speak to Mr Camilleri about the lease being for a minimum of 5 years. However, Mr Camilleri’s account is somewhat different. He recalls that there was a conversation in about mid-July 2016 between Mr Day and Mr Browne to the following effect:

Mr Day:   So your [sic] offering Mick and Paula a 5 year lease mate?

Mr Browne:   Yeah mate I’m heading North.

45. The plaintiffs gave evidence that soon after moving in they undertook various works on the Falls Creek property, including an extension of a truck turning bay, the installation of a loading dock, the slashing and fertilising of paddocks, the installation of fence posts, and the making of gardens.

46. On 13 December 2016 Mrs Browne sent a lengthy text message to Ms Lukas. The message was in the following terms:

Hi there my lovely

Just wondering how much you love the property?

Dan is in serious thoughts of not returning to nsw, as he loves it up here as do I and the boys, we have been looking at properties up here and there’s quite a few that we like.

Even though we were talking of a five year plan, the truth is we would have to sell falls creek to buy up here, this is where we want to be.

What would yours and micks thoughts be on buying the property before we offer to any one else, all in our thoughts at the moment…please don’t stress just thinking

Bear in mind, you can make a good income from the flat as a proposal to the bank

If serious thoughts go your way, I can put you onto heather at Bendigo bank

Again please don’t stress, this is still up in the air, but out of consideration we are letting you know our serious thoughts.

Also you can prove to the bank you can cover a mortgage through the rent you have been paying

47. At around the same time Mr Browne sent a text message to Mr Camilleri in the following terms:

Ha Mick I no things r up and down but I have to think of my family and what is best for us I’m sure we won’t come back to the south coast so we have to sell the farm to buy up here I no [sic] we had a 5 year plan but things have changed I’ve had an offer for 1.4 but the guy is willing to keep u guys in so he said nothing confirmed yet but I thought I should let u know

48. On 17 December 2016 Mrs Browne sent another text message to Ms Lukas. The message included the following:

G’day there

Just letting you guys know that we have inspected a house today up here

Really keen hey

Just wondering how keen you guys are for down there at fallsy and if so when do you want to go ahead

49. Ms Lukas sent a text message in response on 18 December 2016. The message was in the following terms:

Hi Sal. Im so sorry for not txting you back earlier. Honestly I’ve been neck deep on legal stuff that I have to have filed by 22nd of Dec. I have to admit that when I read your msg I was upset, I honestly love this place with all my heart and had so many plans in place, so I was just taken back.

I really appreciate your and dans offer, and have been trying to consider it on top of everything else that’s going on. God if I just had the money I’d say yes right now, but I really need a couple of days to speak with Mick. As the guys at the shed have also put a lot of money and effort into preparing things there too. But to be honest that’s more Micks thing than mine. Could you give me a few days to get my head around everything? I just wasn’t expecting anything like this x

50. Further text messages were exchanged between Mrs Browne and Ms Lukas on that day and the following day. It is not necessary to set out the terms of any of these messages at this point, although reference will be made to aspects of them later in these reasons. It is sufficient to note that the messages concern, amongst other things, the prospect of the Falls Creek property being sold and the possibility of the plaintiffs purchasing it themselves.

51. On 21 December 2016 Mrs Browne sent a text message to Ms Lukas in the following terms:

G’day there

Dan spoke to the other interested party today, I’m texting you at work quickly just to let you know what’s going on

Dan asked them to give a month (which takes until 20th January 2017) as he said to them he wants to give you guys first priority over trying to get funds together to buy fallsy

This is the best dan can do as the other buyer said yep if they don’t get funds I will buy it and have funds transferred asap

I hope upon hope you guys can get the funds, we all only have till 20/1/17, if not the other person buys it

I have let heather at Bendigo know that you may phone her

52. On 22 December 2016 Ms Lukas sent a text message in response which is in the following terms:

Hi Sally. Sorry its taken me time to get back. I’ve been at work and doing everything I can about this place. Trying to adjust from our 5 yr lease to potentially buying all of a sudden. Ive been trying to source property valuations and boundry maps etc and sort finances and my kids 17th & 13th

Bdays in the last week, my legal stuff and Christmas. Its been a challenge! But yeah no worries I’ll do meter reading and take pic tomorrow and send through.

53. On 9 January 2017 Ms Lukas sent a lengthy text message to Mrs Browne which included the following:

….

Regarding this place :( I’ve done everything possible to get the loan but its just out of our means atm. So then I have a few questions.

1. We would presume the buyer is a close local that knows the property well, obviously as no one has looked at it, so, is the buyer aware of our 5 year lease?

2. As yous mentioned the buyer is happy to have us stay. But does that mean for the 5 years as we had agreed?

3. And are we then still able to continue with our own plans we have in place and started? Eg: horse agistment, flat rental? Rear property for cattle etc?

4. What date in February does the flat rent become ours as we agreed? And do you know of any intention of them renting or wanting it longer?

5. I was looking into renovating bathrooms nice and modern am I still able to do this?

If the buyer is happy for us to see out our 5 yr term, it would ruin everything for us if we couldn’t continue with our plans, as we would have never committed to a 5yr lease for $1100/wk if we had no opportunity to make an income from the property. I do understand how things change, but we really weren’t expecting this to happen, especially as you both mentioned that you’d never sell here as its been in your family for generations. Were just sad and had so many plans but we do understand your position. In the same respect, that you both need to do whats right your family, you would understand that we do also. Anyway, if you could shed some light on the above we’d appreciate it, thanks xxx

54. Mrs Browne sent a text message in response in the following terms:

Hi there

Thanku for that

I understand how hard it is to get finance, I really feel for you both

I will tell the other person to go ahead to do the buying contract for the house then, which we will do this arvo, as its out of reach for you guys.

As for your questions I’m thinking the new owner will have to discuss this with you guys as we will no longer be apart of it, and a new lease will have to be struck with the new owner, we don’t know anything about what their intentions are

We are sorry that this has happened this way, but we have to move forward and love it up here.

55. Ms Lukas sent a further text message to Mrs Browne on 9 January 2017 which included the following:

So basically atm Sally everything we all agreed to, spoke in detail with you both over 4 visits, about all our, and your 5 year plans, our planned income from the use of the flat and property and shed, your assurances of never selling this property, and our signing of a 5 yr lease, potentially 10 years, our clear confirmation and notification to you and Dan, that it would be a struggle for us to commit to $1100/wk until February when the flat becomes ours, your reassurance that it would be worth it for us in the long run, your absolute necessity to lease your property to a couple who really loved it and you wanted us to ‘think of it as our home now’, taking on Buddy, (I could keep going..) all our agreements, promises and genuine handshakes??, in your belief is now vanished? Am I correct?

56. On 14 January 2017 Mrs Browne sent an email to Ms Lukas which included the following:

Just letting you know that a prospective buyer will be looking at the house and property this Wednesday (18th Jan 2017) at 10am. Can you please leave the front gate unlocked, if you do lock it that is. If either of you guys can’t be at the property whilst prospective buyers look at it, would you feel better to have a friend be at the property for you whilst prospects look at it, or maybe be there yourselves, this is up to you.

57. Ms Lukas responded by email later that day in terms which include the following:

Absolutely, we will definitely make sure we are both here Wednesday to greet the potential buyer, and more than happy to answer all their questions, and look forward to their comments regarding our 5 year lease, our business plans in place and our current position, in respect to the ongoing agreement between us.

58. On 15 January 2017 Ms Lukas received an email which attached two notices from Mr Browne; one being a Notice of Entry for a prospective purchaser, and the other being a notice of intention to sell the property.

59. On 16 January 2017 Ms Lukas sent an email which attached a letter from her and Mr Camilleri to Mr and Mrs Browne. The letter was in the following terms:

We refer to your email dated 15th January 2016, and your attached formal notification of the proposed sale of 120 Falls Rd, Falls Creek.

It is unfortunate that you have decided to not continue with the agreed plans, commitments made, arrangements and lease we have in place, we confirm, however, we have always complied with all agreements we had with you both and stand by our commitments.

We are happy and willing to meet with any potential buyer you may consider regarding the sale of the Falls Creek property. We are now compelled to ask if you will be informing any potential buyer of the fact that this property is occupied by us, as tenants and the fact that there is a 5 Year lease in place?

Again, we are willing to greet potential buyers, however, we have an obligation, and they have the right to be informed that if they were to go ahead with the purchase, it will be occupied for 5 years, vacate date being 31st July, 2021.

Unfortunately, we have had to seek legal advice regarding our position, we will be enforcing the term of the 5 year lease as we agreed and we had committed to.

In reference to the above legal advice sought, please reply an address for documentation to be forwarded to you in relation. I have forwarded your email and contact mobile numbers to our legal representative as that is all we have. Our representative will be in contact with you via email.

60. On 24 January 2017 the plaintiffs sent a further letter to the defendants. This letter included a number of references to the plaintiffs having a 5 year lease over the Falls Creek property. The letter also referred to an intention on the part of the plaintiffs to lodge a caveat over the property.

61. Further email communications passed between the parties on 27 and 28 January 2017. On 28 January 2017 Mr Browne sent an email to the plaintiffs which stated:

I have been forwarding all emails I have received from you both to my solicitor who has taken over. When I receive a letter from your solicitor we will forward this to him as well as he has advised to do.

62. On 2 February 2017 Mr Cullinan, a solicitor acting for the plaintiffs, sent a letter to the defendants stating, inter alia, that the plaintiffs had instructed that in July 2016 the defendants granted the plaintiffs a 5 year lease over the Falls Creek property. Later on 2 February 2017 the plaintiffs sent a further email to the defendants in relation to the lease of the Falls Creek property. Also on 2 February 2017 Mr Cullinan sent an email to Mr Carey, a solicitor who had been retained by the defendants.

63. On about 7 March 2017 the plaintiffs lodged a caveat (No AM216095) against the title to the Falls Creek property. The interest claimed in the caveat was that of an equitable lease for 5 years arising by estoppel on the basis of representations.

64. On 24 March 2017 Mr Browne entered into a contract to sell the Falls Creek property for $1.5 million. The contract stated that the sale was with vacant possession. The plaintiffs’ caveat was plainly an impediment to completion of that contract.

65. On 3 April 2017 Mr Carey sent a letter to Mr Cullinan which enclosed by way of service a Notice to Terminate Tenancy Agreement. It was stated in the letter that the plaintiffs were “month to month tenants with nothing more than a periodic lease”. It was further stated that the plaintiffs were in breach of the lease by seeking to sub-let the premises without consent, and by carrying out works, namely, the pouring of a concrete slab, without consent. On the following day, Mr Carey sent an amended version of the letter to Mr Cullinan. The amended letter stated that it was not correct to state that the plaintiffs were month to month tenants; rather, it was contended that the plaintiffs were merely week to week tenants.

66. On 4 May 2017 Mr Carey sent a Notice of Lapsing of Caveat to Mr Cullinan.

67. On 16 May 2017 the plaintiffs, who apparently no longer had legal representation, sent a letter to Mr Carey stating that it was their intention to oppose the lapsing of the caveat.

68. The proceedings were commenced by the plaintiffs on 23 May 2017. On 29 May 2017 an order was made by Robb J extending the operation of the caveat until further order.

69. On about 30 August 2017 Mr Browne served a further Notice of Termination of Tenancy Agreement. The notice was stated to be given upon various grounds including that the property had been sold with vacant possession, and it was stated that the plaintiffs had committed various breaches of the agreement.

70. On 3 November 2017 the matter was provisionally listed for hearing to commence on 7 May 2018, and the matter was referred to Court-annexed mediation. A mediation, held on 22 February 2018, did not result in a settlement. The hearing proceeded but did not conclude within the 2 days allocated of 7 and 8 May 2018.

71. On 11 May 2018 the purchasers under the contract for the sale of the Falls Creek property commenced proceedings against Mr Browne. It appears that Mr Browne had on 1 May 2018 sought to rescind the contract. The purchasers sought a declaration that the notice of rescission was invalid, a declaration that the contract remained binding and enforceable, and orders for specific performance.

72. Also on 11 May 2018, counsel for the parties in this proceeding informed the Court that settlement negotiations were being undertaken and that these were “likely to be fruitful”. Accordingly, the Court was requested to defer setting a date for the further hearing. The Court acceded to that request.

73. The matter lay in abeyance until October 2018 when the Court was informed that the settlement negotiations had broken down and that a further hearing date would be required. On 12 October 2018 the matter was set down for further hearing on 13 February 2019. The hearing concluded on that day.

74. It should be noted that the proceedings between the purchasers and Mr Browne have not proceeded to a hearing. On 6 July 2018 the purchasers gave an undertaking to the Court and to the plaintiffs that they would abide by any Court order or settlement approved by the Court in these proceedings, and that the plaintiffs’ quiet enjoyment and use of the Falls Creek property would not be interfered with pending final disposition of these proceedings. On the same day orders were made for the removal of the plaintiffs’ caveat, and for the plaintiffs to have leave to lodge a caveat in the same terms following registration of a transfer of the title to the Falls Creek property to the purchasers. The Court has been informed that the contract for sale has completed. I assume that the plaintiffs have since then lodged the further caveat as envisaged.

75. Each of the deponents was required for cross-examination. Some of the witnesses gave further evidence in chief, pursuant to leave granted by the Court.

76. Ms Lukas gave further evidence in chief to the effect that the first meeting at the Falls Creek property actually occurred in early July 2016. She also gave further evidence about what was said at the outset of the meeting, including that she had said that she was glad to hear that it was a five year lease; and Mr Browne had spoken about accepting a five year contract in the mines and said that they were looking for tenants that will accept a long-term lease for the five years “so it actually works in well with both our families”.

77. In cross-examination, Ms Lukas said that the first meeting occurred around mid-July 2016. She maintained that Mr Browne spoke about a five year job contract. She denied that Mrs Browne said that “it’ll be a one year lease to start with and if we like Queensland we’ll discuss longer leases”. Ms Lukas denied that Mrs Browne said that she and Mr Browne would like to give a “proper go of it” in Queensland and look at it for five years but that is only a “small plan” at the moment.

78. In relation to her email of 28 July 2016, which made no reference to a five year period, Ms Lukas said that Mrs Browne had told her “do not worry about the termination date or end date at this point”.

79. In relation to the occasion when the tenancy agreement was signed, Ms Lukas said that they were told not to fill in the end date, and to leave it open. She denied that she understood that it was simply a week-to-week lease for $1,100 a week. Ms Lukas also denied that Mrs Browne had said that it was going to be a weekly arrangement and that she had accepted that. She denied that Mr and Mrs Browne said they wanted to leave the lease as periodical in case they wanted to come back home. Ms Lukas also denied that there had been earlier discussions about a one year lease to start with. Ms Lukas agreed nothing had ever been received in writing from Mr or Mrs Browne about a five year lease, as opposed to a five year plan.

80. Ms Lukas said that after moving into the Falls Creek property she and Mr Camilleri spent approximately $30,000 on the property itself.

81. Mr Camilleri gave further evidence in chief about what Mr Browne had said during the first visit to the Falls Creek property. He said that Mr Browne agreed that it was a five year lease and said “it could possibly be ten”. Mr Camilleri maintained in cross-examination that Mr Browne said that he had a five year contract. He denied that at the first meeting Mrs Browne spoke about offering “a small lease to start off with and if we like it in Queensland we can discuss extensions”. Mr Camilleri also denied that Mr Browne said that he was “looking at renting the place out for a year at first”.

82. In relation to the occasion when the tenancy agreement was signed, Mr Camilleri gave evidence that when the question of an end date arose they [Mr and Mrs Browne] said “it is a bit up in the air about the contract, it could be the five years so we’ll wait until we get there to sort it, the extra five years”. Mr Camilleri said that Mr Browne had said he had a five year contract but it was possibly open to another five years. Mr Camilleri explained that it was the extra five years that was up in the air. He said that he shook hands with Mr Browne and “took the man at his word”. He gave evidence to the effect that Mr and Mrs Browne said they would put the end date in later, when they confirmed whether it was going to be five years or ten.

62. Mr Camilleri denied that he understood there was to be a periodic lease with a weekly rent of $1,100.

63. Mr Camilleri conceded that he had trouble with dates, so dates mentioned in his affidavit might be incorrect. He denied that Mr Browne might have spoken about a five year plan only, and not about a five year lease.

64. Mr Browne gave further evidence in chief concerning some discussions he had with his wife in about May or June 2016 about renting the Falls Creek property. He gave evidence that they discussed renting the house out “for a maximum of 12 months on a periodical lease” so there would be the option to return on short notice if things did not work out in Queensland. Mr Browne gave evidence that he said “we may give it a maximum of five years in Queensland depending on how it goes”, and Mrs Browne said “well, that’s a plan that we can start with and see where it goes from there”.

65. In cross-examination, Mr Browne said that there were only “thoughts of a five year plan” and he described it as a “small plan”. He said that before they vacated the property he had not applied for any employment, and “had nothing in the pipeline”. Mr Browne agreed that by “periodical lease” he meant a lease from week to week. He said that if no end date was put into the lease it would be a periodical lease. He agreed that when the lease was signed he had no intention of making it a 12 month lease.

66. Mr Browne agreed that in the initial telephone conversation with Mr Camilleri he said something to Mr Camilleri about having a 5 year plan. He denied that he said he was looking for someone who would take on a long-term lease.

67. In relation to the first visit to the property, Mr Browne agreed that he told Mr Camilleri that he wanted tenants who would stay at Falls Creek and look after the place, and did not want tenants who did not love the place. He also gave evidence that he said they were intending to lease the property only from week to week. Mr Browne agreed that Mr Camilleri asked whether he could sub-let some of the bays in the shed on the property. He also accepted that there was some discussion about extending the truck turning bay and setting up the paddocks for horse agistment. Mr Browne said that he did not say that he had no problem with that. Mr Browne seemed to agree that he said that the granny flat on the property would become the plaintiffs when its lease ran out (in February 2017) but “only if we could afford to do so”.

68. In relation to the occasion when the lease was signed, Mr Browne said that he did not recall what was said about an end date, but accepted that Ms Lukas may have said something about an end date. He did not accept that Mrs Browne spoke about an offer of a further 5 year contract in the mines and possibly staying in Queensland for 10 years. He denied that the end date was left open to allow for the possibility of a term longer than 5 years.

69. Mrs Browne gave further evidence in chief concerning some discussions she had with her husband about leasing the Falls Creek property. She gave evidence that she wanted “a periodical lease in case we don’t like living up in Queensland”, and Mr Browne had agreed with that. She said that he agreed with her suggestion that “we’ll just give it a one year lease to start off with if we like it up in Queensland”. She said there was also a discussion in which she said “we will see how we go for five years, if I don’t like it I’ll want to come home”, to which Mr Browne said “Ok, we will see how we go”.

70. In cross-examination, Mrs Browne agreed that there was a five year plan, but added that there was a minimum of one year. She said that inquiries about employment had not been made before the move to Queensland. Mrs Browne agreed that Mr Browne had it in mind to seek employment in the mines, but said that this was not discussed with the plaintiffs.

71. Mrs Browne said that she understood a periodical lease to be either week to week or fortnight to fortnight, and she wanted the lease to be week-to-week. Mrs Browne gave evidence that when she met the plaintiffs she said “we’ll start off with one year to see how we go on a periodical lease”. She explained that she wanted a periodical week-to-week over one year, not a fixed term of one year.

72. In relation to what may happen when the lease of the granny flat ended, Mrs Browne gave evidence that she told Ms Lukas that if we can afford it “we could possibly discuss if another tenant would like to take on the flat”. She denied that she told Ms Lukas that she could then have the income from the granny flat. She later said that she rejected Ms Lukas’ suggestion that the flat could be used as a Bed and Breakfast.

73. Mrs Browne denied that on the occasion of the first visit the plaintiffs indicated that they were looking for a long lease, or said that they were happy about a 5 year lease.

74. In relation to the occasion when the lease was signed, Mrs Browne agreed that Ms Lukas asked what end date should be put in, to which she replied “None”. Mrs Browne said there was no further discussion about it. Mrs Browne said that she understood and intended that the lease be periodical, week-to-week. She denied that there was a conversation about a minimum period of 5 years. She also denied that there was a discussion about the possibility of a 10 year period, and putting the end date in later.

Determination

96. The Court received written outlines of submissions from each side, supplemented by oral submissions. The parties placed particular focus upon the question whether, in the course of the discussions leading up to the signing of the tenancy agreement, the defendants represented to the plaintiffs that they were offering a lease of the Falls Creek property for a minimum term of 5 years.

97. The resolution of that question requires the Court to assess the truthfulness, accuracy and reliability of the vastly different accounts of the discussions given by Ms Lukas and Mr Camilleri on the one hand, and Mr and Mrs Browne on the other. In undertaking that assessment I have had regard to impressions I formed of the witnesses whilst they were giving evidence, the communications between the parties, the testimony of the other witnesses called by the plaintiffs, and what seems to me the more likely content of the discussions in light of the prevailing circumstances and the subsequent conduct of the parties.

98. In assessing the evidence I have of course had regard to the difficulties involved in attempting to accurately recall the detail of discussions held some time ago, and to the risk that purported recollections may in fact be reconstructions that are imbued with what the witness perceives to be in their own interest.

99. Ms Lukas was described in the defendants’ submissions as not a witness of credit. It was submitted that in cross-examination she was evasive, defensive and an advocate in her own case. I did not gain that impression. On the contrary, I formed a generally favourable impression of Ms Lukas as a witness with a reasonably good recollection of the discussions, who mostly answered counsel’s questions firmly and directly. In addition, Ms Lukas’ testimony is reinforced to an extent by the content of some of the text messages that passed between her and Mrs Browne.

100. Mr Camilleri did not seem to me to have as good a recollection as Ms Lukas, but he nonetheless impressed me as a witness who endeavoured to do his best to give accurate evidence. He readily volunteered that he had difficulty remembering dates. Counsel for the defendant submitted that whilst Mr Camilleri was initially defensive, he was a witness of greater credibility than Ms Lukas.

101. Whilst both Mr and Mrs Browne generally gave their evidence in a satisfactory manner, I have less confidence in the accuracy and reliability of their accounts. The testimony they each gave about a one year periodical lease was unconvincing. Some other aspects of their evidence were undermined by the content of text messages, albeit that some of the messages were not sent until after Mr and Mrs Browne had informed the plaintiffs that they were thinking of selling the Falls Creek property. By way of example, the evidence given by Mr Browne in cross-examination about not having employment (even “in the pipeline”) is contradicted by the statement made in Mrs Browne’s text message of 27 July 2016 about her husband needing to round everything up before he goes to his new job. I note, further, that in his affidavit in chief Mr Browne referred to having some casual work arranged at that time, whereas in his affidavit in reply he stated that when he arrived in Queensland he did not have a job or a job contract and was unemployed.

102. Another example is Mrs Browne’s evidence about what would happen with the rent for the granny flat after February 2017. She gave evidence that it was discussed that the plaintiffs would then have the rent, but only if she and Mr Browne could afford to let that income go. This sits awkwardly with certain statements made by Mrs Browne in a text message she sent to Ms Lukas on about 18 December 2016. That message included the following:

I emailed Fox Ville [sic] to see if they needed the place next year as lease runs out in February. If they do the rent is yours anyway as we planned.

103. Mrs Browne was confronted in cross-examination with those statements. She suggested that the words “as we planned” did not refer to earlier discussions held about the lease of the Falls Creek property, but instead referred to discussions on the telephone around that time about the possibility of the plaintiffs purchasing the property. This evidence was unconvincing. Even accepting that there may have been discussions of that nature (and I note that Mrs Browne in her text message to Ms Lukas of 13 December 2016 refers to income from the flat being used as part of a proposal for finance), I do not accept that the words “as we planned” refer to them. The strong likelihood is that they refer to earlier discussions concerning the lease of the Falls Creek property.

104. Further, the text messages sent by Mrs Browne and Mr Browne on about 13 December 2016, which refer to a 5 year plan but indicate however that “things have changed”, do not sit well with the notion that the parties had discussed the lease as being only a “periodical” lease, presumably able to be terminated at any time with little notice.

105. Finally, I note that Mrs Browne denied in cross-examination that she had written or sent certain text messages to Ms Lukas. I am unable to accept those denials in circumstances where Ms Lukas’ evidence on this matter (including in her explanatory affidavit of 2 November 2018) was not challenged. I find that text messages were sent by Mrs Browne to Ms Lukas in the terms of the messages that are annexed to Ms Lukas’ affidavits.

106. The conflicts between the evidence of the plaintiffs and that of the defendants are legion. It is not necessary to resolve most the conflicts, many of which relate to matters not directly concerned with the essence of the dispute, namely, what was said about the duration of any lease.

107. In that regard, there is a dispute as to whether, at the very outset, the prospect of a 5 year lease of the Falls Creek property was raised. According to Mr Usher, Mr Browne told him in June 2016 that he was looking for a tenant for a 5 years lease, with a possible 10 years. Mr Browne says that he spoke to Mr Usher about renting the property for “a year first”. Whilst some aspects of Mr Usher’s account of the conversation were challenged in cross-examination, it was not directly put to Mr Usher that Mr Browne had spoken of only a one year lease, and counsel for the defendants put to both Mr Camilleri and Mr Usher that the latter proceeded to tell the former about a 5 year lease. In these circumstances I think that it is likely that Mr Browne spoke to Mr Usher about a lease of 5 years duration, possibly longer. Mr Usher was emphatic that Mr Browne spoke of a 5 year lease, not a 5 year plan. I note that Mr Camilleri volunteered in cross-examination that Mr Usher was a friend of his, but this was not pursued in cross-examination of Mr Usher. I am prepared to accept that Mr Usher gave this evidence truthfully and to the best of his recollection.

108. In any event, it seems clear that Mr Usher told Mr Camilleri that Mr Browne was looking to lease the property for at least 5 years, and gave him Mr Browne’s contact details. The prospect of a lengthy lease of a suitable property was evidently attractive to Ms Lukas and Mr Camilleri. I accept that Mr Camilleri telephoned Mr Browne and asked about the duration of the possible lease. It is likely that, as deposed to by Mr Camilleri, he specifically asked whether Mr Browne was considering renting the property for 5 years or so. I further accept that Mr Browne said something like “yes, we are looking for someone to take on a long-term lease”. Mr Camilleri’s account of this conversation was not specifically challenged in cross-examination. I prefer his account to that of Mr Browne. I do not accept that Mr Browne spoke of renting the place out for a year at first, with the possibility of an extension.

109. Neither do I accept that on the occasion of the first visit to the property Mrs Browne or Mr Browne spoke of a one year lease (or one year lease as periodical) to start with, and possibly longer leases “if they like it in Queensland”. I accept Ms Lukas’ denial, given in cross-examination, that right at the start she was told that there would only be “either a one year lease or a periodic lease”. It is more likely, in my view, that the conversation on the occasion of the first visit was in terms similar to that deposed to by Ms Lukas. That is to say, it is likely that Mr and Mrs Browne spoke of wanting to find tenants who would commit to a long lease of at least 5 years. Regardless of whether Mr Browne had secured any 5 year employment contract, or said that he had, it is clear that Mr and Mrs Browne did have a 5 year plan for living in Queensland. They had good reason to want to secure suitable tenants for that period of time. Mr Browne agreed in cross-examination that he told Mr Camilleri that he wanted tenants who would stay at Falls Creek and look after the place.

110. I have come to similar conclusions in relation to what was said during the plaintiffs’ second visit to the property. In particular, I accept the evidence given by Ms Lukas that during her second visit to the property she specifically enquired of Mrs Browne whether the lease was for a minimum of 5 years, and Mrs Browne said that it was for at least that time. I also accept that Mr Browne spoke to Mr Camilleri about wanting someone to rent the place who will look after it and stay for a long time. Again, I do not accept that Mr or Mrs Browne said, in response to questions about the lease, that they wanted “one year to start with”.

111. It appears from the text messages sent by Mrs Browne to Ms Lukas on 27 July 2016 that the defendants were being pressed for an answer by another couple who were interested in leasing the Falls Creek property. It further appears that the defendants were keen to resolve the leasing matter as they would soon be leaving for Queensland where Mr Browne was to start “his new job”. In these circumstances, Mrs Browne sought to ascertain the plaintiffs’ position, and in so doing expressed a preference that the plaintiffs become the tenants.

112. I accept Ms Lukas’ evidence about a telephone conversation she had with Mrs Browne shortly after receiving Mrs Browne’s first text message on 27 July 2016. In particular, I think that in the course of the conversation Ms Lukas said that the plaintiffs would accept a 5 year lease of the property.

113. The defendants placed some emphasis on the fact that the email sent by Ms Lukas on the following evening made no reference to a 5 year period. However, according to Ms Lukas’ version of the earlier conversation (which seems not have been specifically contradicted by Mrs Browne in her affidavits), Mrs Browne only wanted a written acceptance that referred to the rental amount of $1,100 per week.

114. I note in passing that the tenor of Mrs Browne’s messages sent on 27 July 2016 provides some further (albeit slight) support to the notion that the defendants were looking for suitable tenants who would look after the property and stay there for a long time. Mrs Browne speaks in her messages of being happy to lease to the plaintiffs “as you seem like us”; of feeling more relaxed knowing that the plaintiffs would be the tenants; and coming down “once or maybe twice a year” to socialise with the plaintiffs.

115. On 31 July 2016 the plaintiffs came to the property once again, presumably to sign a “private” lease agreement, as had been suggested by Mrs Browne. It seems that the form of agreement was printed off by Mrs Browne. It is clear that the question of the duration of the lease was raised by Ms Lukas. She deposed that as she was signing, she asked Mrs Browne what dates should be written in “for the entering date and vacate date”. I think it is likely that, by reference to the form of agreement, she asked what dates should be put in as the starting and ending dates.

116. According to Mrs Browne she answered “None”, and there was no further discussion of the matter. Mr Browne gave evidence to similar effect, although I note that he did not seem to have any real recollection of what was said on that occasion. I think it highly unlikely that the conversation proceeded as contended by the defendants. I do not think that Ms Lukas, having raised the question of the duration of the lease, would have been content to simply leave the matter alone after Mrs Browne said that no dates should be put in. It is much more likely, in my opinion, that the conversation proceeded in similar terms to that deposed to by Ms Lukas. I think that Mrs Browne did say something about possibly staying in Queensland for 10 years. It is likely that this was said in the context of Mr Browne being employed in the mines, even if she did not go as far as to say that he had already secured any contract of employment. I specifically accept that Mrs Browne said words to the effect of “we all know that its at least 5 years”, and also spoke of a possibility that a 10 year term might be offered later. I further accept that Mrs Browne suggested that the ending date (or “vacate date”) be left open for now, to be filled in later. I am satisfied that Ms Lukas, having heard what Mrs Browne had said in response to her query about the duration of the lease, proceeded to sign the agreement.

117. The ending date was in fact left blank on the agreement, and no term was specified. It seems that Mrs Browne inserted 13 August 2019 as the starting date. The evidence is not particularly clear as to when she did so, but I think that she most likely wrote it in on 31 July 2016.

118. The conclusions I have reached concerning what was said in the discussions about the duration of the proposed lease gain some further support from the subsequent communications between the parties. I referred earlier to the text messages sent by Mrs Browne and Mr Browne on about 13 December 2016. More significantly, from 22 December 2016 Ms Lukas sent numerous text messages or emails which included clear statements to the effect that the plaintiffs had a five year lease. It is true, as submitted by the defendants, that these only came after the raising of the prospect of the sale of the property. I would add that after that prospect was raised, Ms Lukas sent a number of messages to Mrs Browne on or about 18 December 2016 which made no reference to a five year lease (or a lease of any duration), and at least one message reveals a concern that a sale might derail her plans for the property. However, these messages need to be considered in the context in which they were written. It is evident that the prospect of a sale added stress to an already stressful situation for Ms Lukas, and there is no indication that at that time she had the benefit of any legal advice about the lease. In those circumstances, I do not think that much store should be placed on the fact that the 5 year lease was not mentioned by Ms Lukas in her messages until 22 December 2016. Of course, if the plaintiffs’ version of events was correct, and if they were relying upon the statements made about a lease for at least 5 years (as I think they were), there would have been no particular reason for the plaintiffs to further raise the matter of lease duration with the defendants before the end of 2016.

103. In my opinion it is telling that, from 22 December 2016, Mrs Browne did not contradict Ms Lukas’ statements concerning the existence of a 5 year lease. She had ample opportunity to do so, and if it was the case that the arrangement was actually for only one year at first, or a periodical lease able to be terminated on short notice, it would be expected that Mrs Browne would contradict Ms Lukas’ assertions. I note that Ms Lukas’ message of 9 January 2017 included a number of questions in relation to the 5 year lease. Mrs Browne sent a message in response which included a paragraph evidently intended as a response to Ms Lukas’ questions. Yet Mrs Browne did not on this or any other occasion challenge the notion that a 5 year lease had been agreed. I do not think that this omission is adequately explained by the fact that around that time the defendants engaged a solicitor in relation to the matter.

104. I further consider that the conduct of the plaintiffs after they moved into the Falls Creek property is supportive of the conclusion that they understood that they had a long-term lease. As mentioned earlier, the plaintiffs undertook various works on the property. There was evidence that significant amounts were spent on those works. The amount spent was perhaps as much as about $30,000, although the receipts put into evidence in respect of some of the works added up to only about $14,000. At the very least, the undertaking of the works tends firmly against the notion that the lease was a periodical lease able to be terminated on short notice.

105. I should state that I have reached my conclusions about what was said concerning the duration of the lease without placing reliance upon the evidence adduced by Messrs Day, Camilleri Junior and Usher that in August 2016, after the agreement was signed, Mr Browne spoke of the lease being for a minimum of 5 years. It is not necessary to make findings about the accuracy or reliability of that evidence.

106. I am comfortably satisfied that were it not for the statements made about the lease being for at least 5 years, the plaintiffs would not have proceeded with the lease, gone into possession of the property, or undertaken the works. When it was put to Ms Lukas in cross-examination that she had been told right from the start that the lease would be either a one year lease or a periodic lease she answered:

No, it didn’t. It was completely incorrect. The statement is incorrect. We would never have taken a lease periodical or for one year to move twenty head of cattle, three horses, three children, two cats for $1,100 just for a house. We would never have even considered a lease of that amount.

123. That evidence rang true. I also accept the evidence given by Mr Camilleri in cross-examination to the effect that the works were undertaken on the understanding that the lease was for a minimum of 5 years. In my view, it is clear that the plaintiffs acted on the understanding that the defendants had agreed to give them a lease for a minimum of 5 years. Mr Camilleri said that “you’re going to spend money thinking that you’re going to make money back over a period of five to possibly ten years”.

124. The defendants submitted that the plaintiffs had not made out their estoppel claim because the alleged representations were not made by the defendants, and therefore the plaintiffs could not be said to have relied on the alleged representations, or to have suffered detriment. For the reasons set out above those submissions must be rejected. In my opinion, the plaintiffs have established that the defendants made clear representations to them, including on the occasion when the agreement was signed, that the lease was to be for a period of 5 years. That is to say, it was made clear that the term of the lease was to be five years, albeit that an additional period of five years might be offered later. Consensus was reached as to a five year term, so all the essential elements of the tenancy had been agreed (see Doueihi v Construction Technologies Australia Pty Ltd (2016) 92 NSWLR 247; [2016] NSWCA 105 at [216]). The plaintiffs have also established that they were relying upon those representations when they proceeded to move into the Falls Creek property, and undertake at considerable expense the various works upon it. In these circumstances, I accept that the plaintiffs would suffer detriment if there was a departure from the represented position.

125. The facts of this case seem to me to fall within the principles of equitable estoppel as stated by Brennan J in Waltons Stores (Interstate) Limited v Maher (supra) at 428-9. The plaintiffs reasonably assumed, based on what they were told by the defendants, that the defendants had agreed to a lease for a term of 5 years, and they acted in reliance upon that assumption. The defendants, having made the statements about the duration of the lease must be taken to have intended the plaintiffs to so act. If the assumption is not fulfilled, detriment would be occasioned to the plaintiffs who have so acted. The defendants have failed to act to avoid that detriment, whether by fulfilling the assumption, or otherwise. They have maintained, based on the form of the agreement as signed, that the plaintiffs’ occupation of the property can be, and in fact has been, lawfully terminated on short notice.

126. The basal purpose of the doctrine of estoppel is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting (see Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 674). The defendants did not suggest that, if the estoppel was established, this was nonetheless a case where the appropriate remedy was something less than one that required the assumption to be adhered to (see Giumelli v Giumelli (1999) 196 CLR 101 at 123-4; Sullivan v Sullivan (2006) 13 BPR 24,755; [2006] NSWCA 312 at [27]-[29], [94] and [101]; Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 at [85]).

127. In my opinion, in the circumstances of this case, the appropriate remedy is one which would require the assumption engendered by the defendants to be adhered to. As the defendants are no longer the owners of the Falls Creek property, they are not in a position to see to it that the assumption is adhered to. However, the new owners are in that position, and have given undertakings to the Court and to the plaintiffs to abide by any orders of the Court in these proceedings. In order to facilitate that intention, it seems appropriate that the new owners be formally added as parties to these proceedings.

128. By their Amended Summons, the plaintiffs seek a declaration that they are entitled in equity to a lease of the Falls Creek property for a term of 5 years commencing on 13 August 2016, and otherwise on the terms of the agreement signed on 31 July 2016. It seems to me that a declaration to that effect, binding upon the new owners, would be appropriate. Orders could also be made requiring the new owners to grant a lease on those terms.

129. As for costs, there seems to be no reason why costs should not follow the event.

130. The Court will give directions, in both these proceedings and the proceedings between the new owners and Mr Browne, that the parties consult with a view to agreeing upon a form of orders to give effect to these reasons. The Court will further direct that, within 14 days, the parties bring in a proposed form of orders. The Court will then either proceed to make orders, or re-list the proceedings to hear further submissions.

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Decision last updated: 07 March 2019