Powell v State of Tasmania
[2001] TASSC 114
•26 September 2001
[2001] TASSC 114
CITATION: Powell v State of Tasmania [2001] TASSC 114
PARTIES: POWELL, David Hartley
v
TASMANIA, THE STATE OF
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 64/1996
DELIVERED ON: 26 September 2001
DELIVERED AT: Launceston
HEARING DATE/S: 9, 10, 11 April 2001
JUDGMENT OF: Crawford J
CATCHWORDS:
Estoppel - Estoppel in pais - The representation - In general - Representation by road department of intention to acquire land for purpose of highway - Later change of plan - Whether equitable estoppel operated against Government.
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, applied.
Aust Dig Estoppel [37]
Estoppel - Estoppel in pais - Who may rely on - Representation by road department to tenant of intention to acquire land for purpose of highway - Whether landlord may enforce an estoppel.
Grace v Peter Harrison Designs & Signs Pty Ltd [1998] QSC 27, referred to.
Aust Dig Estoppel [45]
Torts - Negligence - Essentials of action for negligence - Where economic or financial loss - Careless advice, statements and non-disclosure - Particular persons and situations - Public authorities - Representation by road department of intention to acquire land for purpose of highway - Later change of plan.
Aust Dig Torts [52]
Trade and Commerce - Statutes relating to misleading or deceptive conduct in trade - Other States or Territories - Tasmania - Fair Trading Act 1990 - Misleading or deceptive conduct - Representation by road department of intention to acquire land for purpose of highway - Later change of plan - Whether making of representation amounted to conduct in trade or commerce.
Fair Trading Act 1990 (Tas), s14 (1).
Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 22 ALR 621; Sykes v Reserve Bank of Australia (1997) 151 ALR 579; Unilan Holdings Pty Ltd v Kerin (1992) 107 ALR 709; Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 64 ALJR 293, referred to.
Aust Dig Trade and Commerce [36]
REPRESENTATION:
Counsel:
Plaintiff: S B McElwaine
Defendant: L J Neasey
Solicitors:
Plaintiff: S B McElwaine
Defendant: Director of Public Prosecutions
Judgment ID Number: [2001] TASSC 114
Number of paragraphs: 49
Serial No 114/2001
File No 64/1996
DAVID HARTLEY POWELL v THE STATE OF TASMANIA
REASONS FOR JUDGMENT CRAWFORD J
26 September 2001
The plaintiff was at all material times the owner and registered proprietor of 28 Bass Highway, Cooee, which is comprised in Certificate of Title volume 121325 folio 1. He purchased it in 1981 and leased the property to tenants for use as a Caltex Service Station. The property is on the northern side of the Bass Highway. North of the property is a railway line and to the north of the railway line is Bass Strait.
The service station's improvements are not modern. The building is of brick and concrete construction with a skillion style corrugated iron roof. It incorporates a shop with a small partitioned office, a storeroom and two workshop areas. A canopy is erected over the petrol sales area and there is a steel-framed automatic car wash to the west of the main building. The site has concrete driveways and parking areas.
On 1 February 1983 the plaintiff leased the property to Thirty Sixth Marterra Pty Ltd which in turn sub-leased it to Mr Laurie Howard. He operated a service station business on the site. According to the plaintiff's evidence, Caltas Pty Ltd acquired the head lease from Thirty Sixth Marterra Pty Ltd in 1991. By an agreement for lease dated 15 July 1992, the plaintiff agreed to lease the property to Caltas Pty Ltd for two years from 4 March 1992. Mr Laurie Howard remained the sub-tenant.
In about 1987 the plaintiff heard for the first time of the possibility that the site might be acquired for the purpose of new roadworks associated with the Bass Highway. He made an enquiry and was informed by a departmental officer that there were numerous proposals and nothing firm could be stated. His evidence was that in early 1990, following public display of some proposals, he inquired by telephone of Mr Brian Williams, a Senior Planning Engineer with the Department of Roads and Transport. I accept Mr Williams' record of the date and what was said. It was on 17 July 1990 that the plaintiff telephoned him concerning what was proposed. He told the plaintiff that three options were being investigated, two of which would require acquisition of the property, but a decision would not be made for at least a year. The plaintiff told Mr Williams that the uncertainty might well cause him difficulties in making long-term tenancy arrangements and in attracting a tenant. He expressed his appreciation that the Department could not make a rushed decision on which route should be adopted without fully investigating all the alternatives. I accept the plaintiff's evidence that Mr Williams indicated that the option that would not require the acquisition of his property was unlikely to be adopted. Notwithstanding that, it is clear that the plaintiff was well aware that no decision had been made to acquire his property. He said that he was left in the position of being "under the cloud of proposed acquisition and not being able to make a decision" with regard to the future.
The Land Acquisition Act 1993, and the legislation it replaced, provided the steps which needed to be taken if the plaintiff's property was to be acquired. It could be done by agreement with him. Alternatively, the property could be acquired by compulsory process. The first step in that process was a notice to treat, followed by a notice of acquisition which, in order for the compulsory acquisition to be effective, was required to be gazetted within six months of the service on the owner of the notice to treat. In this case none of the processes for which the legislation provided were implemented at any time. There was no evidence of whether the plaintiff was aware of the processes, except for a letter he sent to the Minister for Transport and Works on 23 May 1995, the terms of which are set forth later in these reasons. He referred in that letter to the need for a notice to treat.
On 2 July 1992 the Department wrote to the plaintiff in the following terms:
"During the past six months we have been developing a traffic management scheme to improve both the traffic flow on the Bass Highway and access to the highway from the abutting properties. To assist us with identifying community concerns we have established a Community Liaison Group representing the transport industry, businesses, local residents, environmental groups, schools, local government and the RACT.
One of proposed improvements to the road is to extend the dual carriage way from Toorak Court to Brickport Road where traffic signals will be installed. This will overcome the problems currently experienced with the merge from two lanes back to one at the end of the dual carriageway. It will also provide better access to Brickport Road for emergency vehicles. This is of particular concern with the new hospital to be built in Brickport road.
As was the case with our previous proposal to build a new four lane highway from Burnie to Somerset the road works associated with the traffic management scheme will require the total acquisition of your property 28 Bass Highway.
The next phase in the development of the scheme is to hold a public display of the scheme. This is expected to be held at about the end of August 1992. Construction of the project is expected to commence early in the 1993-94 financial year. Acquisition, including the acquisition of your property, would be one of the first activities in the construction program.
If you have any queries about the project you can contact me by telephoning 002 332027."
The plaintiff's evidence was that the letter caused him to believe, without doubt, that his land would be acquired. He said:
"By the time you had received that letter or when you had received that letter, what was your state of mind about whether this was a firm proposal or whether the government was still hedging their bets or ¾? ... Well I had doubts as to their intentions. I'd had discussions and this to me was just - I - if it had been any other transaction that I had been involved in I would have considered this letter to be the - a contract.
So between July 92 and when you got the Minister's letter in 21 June 1995, what was your state of mind about whether or not the government was committed to proceed with the acquisition? … I didn't doubt it.
Was it your state of mind that that expressed intention somehow limited your capacity to deal with your property? ... Could you repeat that question.
Well did you think that you were under some constraints about development, use or subsequent sale? … After I received this letter?
Yes? … I believed that it was a mere formality, it looked as if we had 18 months rent and the site was to be acquired. I didn't doubt what Brian Williams had written to me because we'd been trying to clarify this issue since the middle of 1987 and I thought that was just the final clarification of the position that the site had been under for the previous five years."
The plaintiff's evidence was that in July 1992 he was in the process of negotiating a new lease of the property. As previously stated, by an agreement for lease dated 15 July 1992 (13 days after the Department had written to him), he agreed to lease the property to Caltas Pty Ltd for two years from 4 March 1992. Caltas Pty Ltd had been the tenant at least since that earlier date and possibly since some time in 1991. The plaintiff's evidence was that it had been a long process to get a lease signed. He said that he had needed to clarify the situation concerning the future roadworks before he could offer a long term tenancy and before he could decide whether to upgrade the improvements on the site. Regarding the latter subject, the site was becoming run down and it needed a revamp to recover the level of rental he believed it was worth. The sub-tenant, Mr Howard, had requested that he upgrade the toilets and other items. The roller doors were starting to corrode. The canopy over the pumps "was getting a little bit daggy and unsightly" and the plaintiff wanted to upgrade the shopfront of the place and make it look more business-like, in the hope that it would attract what he would regard as a "real market place rental". I have no reason not to accept his evidence that he abandoned thoughts of improving the property upon receipt of a letter dated 2 July 1992 from the Department. As he put it, "I was resigned to the fact … that it was lucky if the site would be there in 18 months time so I saw little point in undertaking any further" work.
The plaintiff gave evidence that normally such a tenancy would have been for a term of three or four years, but because of what was contained in the letter dated 2 July 1992, he agreed to accept a two year tenancy. I do not fully accept that it was the letter which caused him to so agree. I find that a three or four year lease would have been normal and accept that a two year term was agreed upon by the parties because of the future uncertainty concerning the property and whether it would be acquired by the Government. Mr Hess, who was a director of Caltas Pty Ltd at the time, confirmed that a longer term would have been normal, but said that Caltas Pty Ltd chose the shorter period of two years because of the company's concern about the uncertain future of the site, having regard to its likely acquisition at some uncertain time.
One of the reasons why I have difficulty accepting the plaintiff's evidence that he agreed to the two year term because of the letter of 2 July 1992 from the Department, arose out of what I regarded as most unsatisfactory evidence given by him about the rent. The previous tenant had paid $27,000 or $28,000 per annum. In the agreement for lease with Caltas Pty Ltd, the annual rent was stated to be $50,000. At no time did Caltas Pty Ltd agree to that figure. The true agreement with Caltas Pty Ltd was for an annual rental of $36,000, which the plaintiff confirmed separately in a letter to Caltas Pty Ltd dated 24 July 1992. Counsel for the defendant pressed the plaintiff very hard in the course of cross-examination about the inflated rental amount in the agreement and I came to the conclusion that the plaintiff was not being candid in his answers. In the letter, he expressed as the reason for "rebating your rent by the sum of $14,000 pa" was "to assist you in the development of your business" having regard to "the current difficulties in the industry". In an earlier letter of 13 April 1992 to Caltas Pty Ltd, he had stated that he would rebate the rent by $14,000 "to assist you in business". I strongly suspect that something devious was behind the mis-statement of the rental in the agreement and the failure of the plaintiff to explain the matter to my satisfaction. It caused me to be cautious about accepting his evidence of the circumstances which gave rise to the terms of the tenancy, not only as to the rental, but also as to the term.
On 30 November 1993 Caltas Pty Ltd exercised an option it had to extend the term of the tenancy for two years from 4 March 1994 to 3 March 1996. Apart from evidence of that, the next evidence by the plaintiff, in chronological terms, after his evidence of receiving the letter dated 2 July 1992 and of what it caused him to believe, was evidence of speaking to a Government valuer, Mr L Rae, who told him he was conducting a valuation of the property. He described as his guess that the conversation occurred in 1993, but he admitted to not being specific about that. I find that it was some time between 9 March 1994 and 22 August 1994. On the first of those dates, a Senior Project Manager in the Department wrote to the "Property Officer" asking that arrangements be made for the acquisition of seven properties, which included the plaintiff's property. On 22 August 1994 Mr Rae wrote to a Deputy Secretary in the Department reporting on the compensation which could be expected to be payable if the plaintiff's property was acquired. Mr Rae mentioned in the report that he had interviewed the parties interested in the property. He referred to historical information concerning the property which had been provided by the plaintiff. In his evidence the plaintiff confirmed having provided the information to Mr Rae. At that time advice was given by Mr Rae to the plaintiff that he was conducting a valuation of the property on behalf of the Crown and that the plaintiff ought to obtain his own valuation. As a result, the plaintiff engaged a valuer, Mr R L Jones, for that purpose.
It was the plaintiff's evidence that when he engaged Mr Jones, his state of mind was that there was no point upgrading, maintaining or repairing the service station, apart from doing absolutely essential work. His evidence was that, according to the Department's letter of 2 July 1992, there was probably less than six months to run, inferring that the letter had indicated that the property would be acquired by then. I do not accept his evidence about that, for the letter had indicated that any acquisition was likely to occur early in the 1993/1994 financial year and that time had long passed and the tenancy had been extended by Caltas Pty Ltd to 3 March 1996. However, I accept the general tenor of the plaintiff's evidence that because he expected the property to be acquired only essential maintenance and repairs were being carried out.
Chronologically the next evidence given by the plaintiff was of a letter written by him to the Minister for Transport and Works on 23 May 1995 in the following terms:
"I plead for your help and assistance in seeking to resolve a most worrying and protracted negotiation, with your department. For the last 9 years, my property at 28 Bass Highway, Cooee has been the subject of a proposal to acquire, by the Department of Transport and Works. However during this time, I have been given no definite date for the acquisition. Consequently I have not only suffered financial loss but my family's present and future financial security is being adversely affected.
I purchased the property in 1981, as a long term investment and as a major part of our superannuation fund. As a self-employed 49 year old with a young, dependant family of three, I have always been mindful of providing security for them and my wife. The property has also provided us with an income in the ensuing years.
During the last few years, the Department has indicated both to my tenants and myself that acquisition is imminent. This has placed me in a most disadvantageous position, as tenants have not only refused to pay goodwill for the property but have ignored the maintenance clause. Thus, the property has become run-down and the likelihood of attracting another lessee is further diminished.
As you can see, this uncertainty about the Department's time frame of acquisition, has placed my family and me in a most invidious position. Road works are at present being carried out in the area and as yet, I have received no Notice to Treat.
I implore you to please help resolve this matter at the earliest."
Government officers had been reviewing whether the plaintiff's property needed to be acquired for the purpose of the proposed roadworks, which had commenced by that time. It was not long after his letter that the Government decided to construct the roadworks without acquiring his property. On 21 June 1995 the Minister wrote to him advising that the Department of Transport had reviewed its design of the relevant section of the Bass Highway and, as a result of the review, it had been decided that none of the plaintiff's land would need to be acquired. By the time of that letter, roadwork in the vicinity of the plaintiff's property had commenced, although from the terms of the Minister's letter, it appears likely that work had stopped for the winter and was due to recommence later in 1995.
I have related much of the plaintiff's evidence of relevant events, but there was other evidence of events about which neither counsel asked him anything. It came largely from Mr Hess and from documents.
The letter of 2 July 1992 from the Department to the plaintiff had advised that the next phase in the development of the scheme would be to hold a public display of the scheme, which was expected to take place at about the end of August 1992. Earlier in the letter it was stated that to assist the Department with identifying community concern, a Community Liaison Group had been established. On 26 August 1992 the Advocate newspaper carried a report about the proposed traffic management scheme. I take judicial notice of the fact that the Advocate is a daily newspaper which is published mainly for the public in the north west of Tasmania, which includes Cooee. The report did not refer to the possibility of land being acquired, but to what was proposed by way of roadworks, which included an extension of the dual carriageway of the Bass Highway from a point east of the plaintiff's property to a point west of it and other substantial works. A copy of a plan of the proposed works was included in the report. It was stated that the public had been invited to have input into what was proposed, which was described "as a medium-term solution to traffic management problems at Cooee over the next 10 years". The report advised that the scheme's plan could be viewed by the public at certain hours until 28 August 1992, that it was "open for public comment" until that date and that "if there is no major opposition from the public to the plan, it will then go to the Government's Public Works Committee for approval, with work likely to then commence early in 1994".
The report in the Advocate did not state that the plaintiff's property would be acquired, but the evidence of Mr Hess confirmed that for a substantial period of time the advice given by the Department was that the acquisition was intended. A departmental report of October 1992, on the result of the public display of the proposed traffic management scheme, reveals that the display was open to the public from 24 - 28 August 1992 at the Cooee Memorial Hall and that it was advertised in the Advocate on the two previous Saturdays. The advertisements stated that the public would have the opportunity to comment on the proposal at the display. The report noted that 447 attended the display and 107 submitted response forms. Sixty-two percent of the respondents supported the proposed scheme, although over half considered it needed modification. There was no evidence given at the trial which enables me to determine whether or not the plaintiff was aware of that particular public display.
On 4 August 1994 there appeared on page 3 of the Advocate newspaper an almost full page report concerning the possible acquisition of the plaintiff's property. It made no mention of the plaintiff. It was written largely from the perspective of the property's sub-tenant, Mr Laurie Howard, and explained that he was "a frustrated man … because he still does not know whether his business has a long-term future". He had "been in limbo … for about six or seven years since they first started talking" about the Cooee traffic problem. The report made it clear that a definite decision to acquire the property had not been made and concluded with a statement that "a Government spokesman said yesterday only partial acquisitions were likely to be made in the future". There was no evidence which enables me to determine whether or not the plaintiff was aware of the Advocate's report.
Estoppel
The first cause of action pleaded by the plaintiff is an equitable estoppel. In the statement of claim, par4, he pleaded that on various occasions between 1987 and June 1995 the defendant made a number of representations to him. He pleaded further that acting in reliance upon those representations, either singularly or collectively, he assumed that the defendant would acquire his property by way of compulsory acquisition, that the defendant had committed itself to that course and that the defendant would not depart from that course. I will deal with the particulars of the representations in the statement of claim.
The first representation alleged was that in or about mid-1987 the defendant, acting by Mr Surtees and Mr Brian Williams, orally represented to the plaintiff that the property would be acquired to facilitate road reconstruction works which would be undertaken on the Bass Highway. There was no evidence that Mr Williams made such a representation in or about 1987. There was evidence from the plaintiff that in 1987 he inquired by telephone of Mr Surtees, at the department, and was told that there were numerous proposals and that Mr Surtees could not tell him anything firm. That evidence fell far short of establishing the first alleged representation.
The second representation alleged in the statement of claim was that from early 1989 to and including early 1990, on various occasions, Mr Brian Williams orally represented to the plaintiff that the property would be acquired to facilitate reconstruction works on the Bass Highway. The evidence did not establish the making of such a representation. As I found earlier in these reasons, it was made clear to the plaintiff that no decision had been made whether or not to acquire his property.
The third representation alleged was that on or about 18 March 1992 the defendant promulgated two alternative written designs for the reconstruction of the Bass Highway, each of which indicated the acquisition of the plaintiff's property. There was no evidence to support a finding that such a representation was made to the plaintiff, nor that he relied on it in some way.
I will return to the fourth pleaded representation shortly. The fifth pleaded representation was that in or about June 1993 the defendant, by Mr Brian Williams, orally represented to the plaintiff that he ought to engage a valuer to determine what compensation would be payable to him in respect of the acquisition of his property. There was no evidence of such a representation by Mr Williams. I repeat my finding that sometime between 9 March 1994 and 22 August 1994 a Government valuer, Mr L Rae, advised the plaintiff that he was conducting a valuation of the property on behalf of the Crown and that the plaintiff should engage his own valuer, which he did. By the end of the trial I did not understand the plaintiff to base his estoppel claim on that advice.
The sixth and final representation pleaded in the statement of claim was that on or about 5 October 1993, by Mr Williams, the defendant represented to the plaintiff that the property would be acquired in the 1994/95 financial year. There was no evidence of such a representation.
I return to the fourth pleaded representation. By the end of the trial it was plainly the one upon which the plaintiff essentially relied to establish an actionable estoppel. It was pleaded that on 2 July 1992 the defendant represented to the plaintiff in writing that it intended to build a new four lane highway from Burnie to Somerset and that roadworks associated with that project "will require the total acquisition of" the plaintiff's property. How the representation was pleaded is of no consequence. It is the contents of the letter of 2 July upon which the plaintiff's case depends for the estoppel.
In their closing submissions both counsel adopted the six elements necessary to establish an equitable estoppel, which were enunciated by Brennan J in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428 - 429. The first element is that 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. Earlier in these reasons I set out verbatim the plaintiff's evidence of his state of mind consequent upon reading the contents of 2 July 1992. He was not challenged in cross-examination about what he said. In fact, he was not cross-examined at all about it. He first referred to the fact that he had previously held doubts as to the Government's intention. He then referred to the letter and said "if it had been any other transaction that I had been involved in I would have considered this letter to be the - a contract". That was not a claim that he believed that a contract had been formed as a consequence of the letter. He expressed that he would have considered the letter to be a contract "if it had been any other transaction", which to my mind means that he understood that in the particular circumstances he was in on this occasion, there was not a contract. I conclude that his reference to a contract was hyperbole.
The plaintiff's evidence was that as a result of the letter, he did not doubt that the Government had committed itself to proceed with an acquisition of his property. By that, and his later reference to "a mere formality", I understand him to have meant that he believed that a firm decision had been made by the Government to use the legal powers it had to acquire his property, if necessary compulsorily. The balance of the relevant passage of his evidence was to the effect that he believed that because such a decision had been made by the Government concerning his property, the letter had been sent to notify him of that decision.
There is no evidence enabling me to find whether at the time he received the letter the plaintiff was aware of the precise legal steps the Government would need to take before his property had been acquired. However, it is reasonable to infer that he was aware that some legal steps would need to be taken by the Government and that the property would not in fact be acquired unless and until they were taken.
I return to the first element for equitable estoppel as expressed by Brennan J in Waltons Stores (Interstate) Ltd v Maher (supra). The evidence does not satisfy me that the plaintiff assumed that there then existed a particular legal relationship between them. I say that because of the inference I draw that he was aware that legal steps needed to be taken by the Government before such a legal relationship would come into existence. Nor does the evidence satisfy me that he assumed that the Government would not be free to withdraw from the expected legal relationship which the Government had decided to bring about. The plaintiff gave no evidence about that aspect. He believed that a firm decision had been made to acquire his property and, I think, that it was the only course the Government was then intending to take with respect to his property, but evidence establishing those beliefs fell short of also establishing that he believed that the Government was not free to alter its decision and to withdraw from entering into the acquisition process.
The second element for an equitable estoppel as expressed by Brennan J is that the defendant must have induced the plaintiff to adopt the assumption or expectation referred to in the first element. I find that by the letter of 2 July 1992 the defendant induced the plaintiff to believe that a decision had been made to acquire his property, but I do not find that the defendant induced him to assume that a legal relationship of the necessary kind existed between them or that the defendant induced him to assume that the Government would not be free to withdraw from its decision to enter into such a legal relationship by acquiring the property. I repeat the reasons I gave when dealing with the first element. To them I add that the letter advised that to assist the department with identifying community concerns about the traffic management scheme which had been developed a Community Liaison Group had been established. The letter also advised that the next phase in the development of the scheme would be to hold a public display at about the end of August 1992. That it was intended that community concerns about the proposal were to be identified suggested that it was still possible that the proposed scheme might not proceed or, at the very least, that it might be altered.
The plaintiff also sought to rely on the principles of equitable estoppel on the alternative basis of representations which induced Caltas Pty Ltd to take certain action. The plaintiff pleaded that between July 1993 and March 1996, representations were made by the defendant to Caltas Pty Ltd and the public which induced Caltas Pty Ltd to believe that the defendant would acquire the plaintiff's property by way of compulsory acquisition, that the defendant had committed itself to that course of action and that the defendant would not part from that course of action. It was further pleaded that those representations induced Caltas Pty Ltd:
1To acquire by leasehold purchase an alternative site for the conduct of service operations by it at 44 Bass Highway, Cooee.
2Not to renew each of the options to renew which were available to it pursuant to the provisions of its agreement for lease with the plaintiff.
3To negotiate with and obtain from the plaintiff a variation of the provisions of the agreement for lease which gave to Caltas Pty Ltd the right to terminate the tenancy at any time upon three months' notice in writing.
4To advise the plaintiff by letter dated 19 March 1997 of its intention to terminate the tenancy with effect from 30 June 1997 and vacate the land.
5To vacate the land and remove its service station business with effect from 30 June 1997 and relocate that business to its site at 44 Bass Highway.
The evidence of the managing director of Caltas Pty Ltd, Mr Hess, was that the leasehold of 44 Bass Highway was acquired by the company on 30 April 1992, prior to the pleaded representations, to protect the company's future interests because it was very concerned about the likelihood of 28 Bass Highway being acquired. He said that the company was "fairly certain" that number 28 would be taken as part of the roadworks, so the leasehold of number 44 was acquired to ensure that the company was able to continue to supply fuel in the Cooee area. From about the time of its acquisition of the leasehold of number 44, Caltex petrol was sold from both sites. I find that Caltas Pty Ltd acquired the leasehold of number 44 because it considered that there was a likelihood, or a good chance, that number 28 would be acquired in the relatively near future. The evidence does not establish that because of the pleaded representations or any others, Caltas Pty Ltd assumed, at the time of the acquisition of the leasehold of number 44, that there then existed a particular legal relationship between the defendant and the plaintiff nor does the evidence satisfy me that Caltas Pty Ltd assumed that the defendant would not be free to withdraw from proceeding with the acquisition of number 28.
On 30 November 1993 Caltas Pty Ltd exercised an option to renew the tenancy of 28 Bass Highway for a further two years from 4 March 1994 to 3 March 1996. The agreement for lease provided for a further option for another two years, the option to be exercised by 3 December 1995. That option was not exercised by Caltas Pty Ltd. Instead it was agreed between the plaintiff and Caltas Pty Ltd that the agreement for lease would be varied so that Caltas Pty Ltd would have the right to terminate the tenancy upon three months notice in writing. The failure to exercise the option and the entering into the negotiations which led to the variation, occurred after the plaintiff had been advised by the Minister's letter dated 21 June 1995 that the property would not be acquired. The termination of the tenancy and vacating of the plaintiff's property by Caltas Pty Ltd occurred approximately two years after the plaintiff knew in June 1995 that his property would not be acquired. As was explained by Mr Hess in a letter he sent the plaintiff on 19 March 1997, Caltas Pty Ltd had purchased 44 Bass Highway as an alternative Caltex service station and the decision not to acquire 28 Bass Highway had rendered it uneconomic to run both sites.
It was Mr Hess's evidence that the reason for Caltas Pty Ltd deciding to terminate the tenancy and vacate 28 Bass Highway was "in the long-term planning we decided that the Government was going to acquire that particular property and we were still firmly convinced that it would happen". I found it difficult to understand that evidence. Notice of intention to terminate the tenancy was given by Caltas Pty Ltd in March 1997. The defendant had decided almost two years earlier not to acquire the property and had formally advised the plaintiff accordingly. Caltas Pty Ltd knew of that. By the time Caltas Pty Ltd decided to vacate the property, the new roadworks had been completed and the property remained intact. Mr Hess said that nevertheless "we still thought it (the acquisition) might happen because there was still - a controversy over, you know, the final settling of the arrangements there". Having regard to the fact that this action was commenced in 1996 and Caltas Pty Ltd had claimed compensation from the defendant as a result of the change of plans concerning the acquisition, I infer that Mr Hess was referring to his contemplation at the time that the plaintiff might be able to force the defendant to acquire the property, notwithstanding that it had determined not to do so. If he did contemplate that, he was not induced to do so by the defendant. In any event, that evidence conflicted with other evidence given by him in cross-examination, when he was pressed to explain why the company had vacated 28 Bass Highway and his response was that the site had deteriorated through the plaintiff not having carried out repairs to the property and the sub-tenant, Mr Howard, had decided to vacate and move to another location. In those circumstances, he said, Caltas Pty Ltd was forced to make its plans.
In the result the evidence does not satisfy me that representations made by the defendant to Caltas Pty Ltd and the public induced Caltas Pty Ltd to assume that a legal relationship existed between the plaintiff and the defendant or expect that such a legal relationship would exist between them and that the defendant would not be free to withdraw from it. Further, I am not satisfied that Caltas Pty Ltd was induced by such an assumption or expectation to do or not to do the matters pleaded in the statement of claim.
In any event, authority does not support the plaintiff's claim to an equitable estoppel upon the basis of losses suffered as a consequence of actions taken or not taken by Caltas Pty Ltd, in reliance on representations to it and the public by the defendant. Counsel for the plaintiff conceded that to be so, but relied on the dicta of Deane J in the Commonwealth v Verwayen (1990) 170 CLR 394 at 443, that it is undesirable to seek to define exhaustively and in the abstract the content or operation of any general legal doctrine and that development on a case by case basis enables the adaptation of the common law to meet changing circumstances and demands. At page 444 his Honour said that the persons who may be bound by or who may take the benefit of an estoppel extend beyond the immediate parties to the representation to their privies by blood, estate or contract. That statement was not so broad as to extend to the circumstances relied on by the plaintiff by way of representations made to Caltas Pty Ltd and any assumptions that the company was thereby induced to make. In no sense can it be said that the plaintiff was a privy of Caltas Pty Ltd. Like Thomas J in Grace v Peter Harrison Designs & Signs Pty Ltd [1998] QSC 27, sitting at first instance I hold that in general a claimant who is not a party or privy to the principal transaction is not able to enforce an estoppel arising from a representor's conduct, at least in the absence of some special nexus between the claimant and representor, which I do not find existed here.
Negligent mis-statement
The plaintiff also sued the defendant in negligence. He claimed that singularly or collectively, the six representations, which he alleged were made to him and which are set out earlier in these reasons, were made by the defendant in circumstances where he was expected to rely upon them, and upon which he in fact relied, in good faith. He pleaded that in making the representations the defendant owed to him a duty to exercise reasonable care in making them. The plaintiff claimed that the defendant breached that duty because it failed:
1To sufficiently enquire or investigate the necessity of acquiring the land before making any of the representations.
2To sufficiently advise the plaintiff that the defendant would or might not acquire the land.
3To give sufficiently correct information to the plaintiff in relation to the necessity of acquiring the land by compulsory acquisition.
There was no evidence establishing the first of those particulars. With regard to the others, counsel for the plaintiff expressed the breach as consisting of "the making of a statement that we will do something in the future without qualification, without saying well this is still subject to review or it might not happen or something like that ... the negligence is failing to qualify the statement, giving it in the unequivocal terms that it was given".
In the light of the evidence, the only representation upon which the plaintiff could hope to succeed in negligence is the one fourthly pleaded as having been made in the letter dated 2 July 1992 from the Department to the plaintiff. Essentially, it advised him that a traffic management scheme had been developed by the Department to improve the Bass Highway and that "the roadworks associated with the traffic management scheme will require the total acquisition of your property 28 Bass Highway". It further advised that construction work was expected to commence early in the 1993 - 1994 financial year and that acquisition of the plaintiff's property "would be one of the first activities in the construction program". The representations that the traffic management scheme had been developed and that the roadworks associated with it would require the total acquisition of the plaintiff's property have not been shown to have been mis-statements in any way. The representations that it was expected that construction work would commence in the 1993 - 1994 financial year and that the acquisition of the plaintiff's property would be one of the first activities in the construction program, was a statement of the Department's expectations and intentions in those regards. The evidence does not suggest that it was a mis-statement in that the Department did not in fact have those expectations and intentions.
Accordingly I find that there was not a mis-statement in the letter. It did not assert that the defendant would not change its intentions or expectations or would not be free to do so. The references in the letter to the establishment of a Community Liaison Group to assist the Department with identifying community concerns about the traffic management scheme and the Department's intention to hold a public display of the scheme as the next phase in the development of it, indicated that the proposal was subject to review and suggested that it was still possible that the proposed scheme might not proceed or, at the very least, that it might be altered. I repeat that the evidence does not satisfy me that the plaintiff assumed that the Government would not be free to withdraw from the proposed acquisition. He gave no evidence about that aspect. There was no evidence establishing that if the letter to the plaintiff had added that there was a chance, although possibly a remote one, that the defendant might change its mind concerning the acquisition, the plaintiff would not have acted in reliance upon the letter in the way he in fact did.
The plaintiff also sued the defendant for damages based on allegedly negligent mis-statements made to Caltas Pty Ltd and the public, which induced Caltas Pty Ltd to act or refrain from acting as set out earlier in these reasons. I find that mis-statements were not made by the defendant in a relevant sense. Insofar as the defendant may have represented to Caltas Pty Ltd and members of the public that it intended to acquire 28 Bass Highway, the representation was a correct statement of the defendant's intention. No representation was made that the defendant would not change its intention or would not be free to do so. As I have already found, the pleaded representations to Caltas Pty Ltd did not cause it to act or refrain from acting in the way pleaded. I repeat that the evidence does not satisfy me that Caltas Pty Ltd assumed that the defendant would not be free to withdraw from proceeding with the acquisition of number 28. I add that in his closing address, counsel for the plaintiff only asserted that I should find negligence because of the failure of the servants or agents of the defendant to qualify the representation that the property would be acquired, by adding that the decision was subject to the Government not changing its mind.
Fair Trading Act 1990
The plaintiff also claimed under this Act, s14(1). He pleaded that the making of the third, fourth, fifth and sixth representations to him amounted to conduct engaged in by the defendant in the course of trade or commerce. I have previously stated in my findings that one of those alleged representations was proved to have been made, namely the fourth pleaded representation, which was contained in the letter of 2 July 1992 from the Department to the plaintiff.
I conclude that the making of the representations contained in that letter were not made "in trade or commerce", as required by the Act, s14(1). "The terms 'trade' and 'commerce' are not terms of art. They are expressions of fact and terms of common knowledge." Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 22 ALR 621 at 648. The terms are of the widest import. Op cit at 649. The provisions of the Act bind the Crown (see s13) and there is no doubt that the Crown, through the Government and its departments, may engage in trade and commerce. An obvious example is of retail activities carried on by departments. But it is equally clear that many of the activities of government do not amount to conduct in trade and commerce. The answer in each case will depend on the facts.
In Sykes v Reserve Bank of Australia (1997) 151 ALR 579 the bank announced in May 1990 that new polymer five dollar bank notes would be introduced, in substitution for the previously circulating paper notes, "later this year". Production of the notes was delayed, and in November 1990 the bank announced that the new series would not begin to issue until after Easter 1991. They were not in fact issued until July 1992. It was held at 592 that the announcements could properly be described as marketing or promotional activities in relation to the supply of services to actual or potential customers and such activities could properly be described as amounting to conduct in trade or commerce for the purposes of the Trade Practices Act 1974 (Cth), s52. Reliance was placed by Tamberlin J on the circumstances that the bank was required by its establishing Act to carry on business as a central bank and to act as banker and financial agent to the Commonwealth. The Act clearly contemplated that the bank was to operate as a profit making entity. The bank intended to sell the polymer notes and to make profits doing so. The printing and issue of the bank notes was found by his Honour, upon the basis of the evidence and the relevant legislation, to be a trading or commercial venture on the part of the bank which was intended to be conducted in order to generate profits. It was not difficult therefore for the learned judge to conclude that the announcements were made in trade or commerce.
A contrasting case is Unilan Holdings Pty Ltd v Kerin (1992) 107 ALR 709 which concerned the Minister for Primary Industry and Energy who, in the course of a speech made to the International Wool Textile Organisation, gave "a cast-iron guarantee ... that the Australian government will not contemplate, under any circumstances, any further downward movement in the floor price" of wool. Eight months later the Minister's government suspended the national wool marketing scheme including the reserve price, as a result of which the price of wool slumped. It was held that the Minister's speech was not made in trade or commerce, notwithstanding that it was made to an audience comprised of those whose business was the wool trade and for the purpose of seeking to promote the interests of the Australian Wool Corporation and the wool industry generally. Hill J concluded at 714 that "the giving of a speech to an international wool conference by a Minister of State is not an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character", and it was not made so merely because the speech concerned matters of trade or commerce. "The giving of the speech is a matter that can be said to be in relation to trade or commerce, but is not conduct which is actually in trade or commerce", his Honour said.
In the joint judgment of Mason CJ, Deane, Dawson and Gaudron JJ in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 64 ALJR 293 at 295 it was held that upon a proper construction of the Trade Practices Act 1974 (Cth), s52, that with which the section was concerned was conduct "towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character".
I accept the submission of the defendant's counsel that governmental and departmental activities for the purpose of planning and constructing roads pursuant to statutory powers and duties are a function of government and not of trade or commerce. The authorising and empowering statute in this case was the Roads and Jetties Act 1935 which provided for such things as the declaration, by proclamation, of the intended new line of highways, the power to construct highways and roads and to enter onto land for that purpose, and the power to acquire land for the purpose of constructing highways and roads. The process of acquisition was governed by the Land Acquisition Act 1993 or the previous legislation repealed by it. The announcement of plans for the new line of a highway, its construction and the land it is intended will be acquired for the purpose of constructing it, is not an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character and do not amount to conduct in trade or commerce.
The plaintiff also claimed damages under the Fair Trading Act 1990 based upon representations allegedly made to Caltas Pty Ltd and to the public. I hold the same view that the representations relied upon, insofar as they were established by the evidence, were not made in trade or commerce.
It is therefore my conclusion that the plaintiff's action should fail. There will be judgment for the defendant.
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