Maxted v LC Smith & Co Pty Ltd

The plaintiffs, Maxted, rented a property from the defendant, LC Smith & Co Pty Ltd, comprising 24.6 hectares. The property was intended as their residence and they were tasked with its care. The plaintiffs had a plan to purchase their own acreage property and were contemplating leaving the rented property after three years. The director of the defendant, who was the de facto partner of the female plaintiff, assured the plaintiffs they would be "taken care of" and did not need to worry about their future. Consequently, the defendant granted the plaintiffs a 20-year lease at the same rental they had been paying. The plaintiffs sought to establish an equitable estoppel against the defendant, arguing they had an expectation of being granted a greater interest in the property than the long-term tenancy at a fixed rental, and that this expectation was fostered by the defendant. They also contended that their acts of reliance on this expectation constituted a detriment.

The court had to determine whether the plaintiffs' expectation of a greater interest in the property was reasonable and whether it was created or encouraged by the defendant. Additionally, the court needed to assess if the plaintiffs' actions were taken in reliance on this expectation and whether these actions constituted a detriment to them. The court also examined whether the removal of vegetation and dilapidated fencing from the property boundary by the plaintiffs without the landlord's consent constituted a breach of the tenancy agreement. The court had to consider if the removal of vegetation was necessary for safety reasons, and whether the removal of the fence, an improvement to the property, violated the tenancy agreement.

The court found that the plaintiffs had an expectation of being granted a greater interest in the property, which was reasonably created by the defendant. The acts of the plaintiffs in relying on this expectation constituted a detriment. However, the court determined that the removal of vegetation and fencing by the plaintiffs was a breach of the tenancy agreement. The removal of vegetation, while required for safety reasons, did not excuse the breach, and the fence, as an improvement, could not be removed without the landlord's consent. The court directed that further submissions be made by the parties to address these issues before making any final orders.