Richard Pitt and Sons Pty Ltd v Hydro Electric Commission
[2000] TASSC 61
•6 June 2000
[2000] TASSC 61
CITATION: Richard Pitt & Sons Pty Ltd v Hydro Electric Commission [2000] TASSC 61
PARTIES: RICHARD PITT & SONS PTY LTD
v
HYDRO ELECTRIC COMMISSION
TITLE OF COURT: SUPREME COURT OF TASMANIA (FULL COURT)
JURISDICTION: APPELLATE
FILE NO/S: FCA 67/1999
DELIVERED ON: 6 June 2000
DELIVERED AT: Hobart
HEARING DATE: 13, 14 March 2000
JUDGMENT OF: Cox CJ, Underwood J and Crawford J
CATCHWORDS:
REPRESENTATION:
Counsel:
Appellant: W J Martin QC, C R Doherty
Respondent: S P Estcourt, T J Williams
Solicitors:
Appellant: Toomey Manning & Co
Respondent: Gunson Pickard & Hann
Judgment Number: [2000] TASSC 61
Number of paragraphs: 21
Serial No 61/2000
File No FCA 67/1999
RICHARD PITT & SONS PTY LTD v
HYDRO-ELECTRIC COMMISSION
REASONS FOR JUDGMENT FULL COURT
COX CJ
UNDERWOOD J
CRAWFORD J
6 June 2000
Orders of the Court:
Appeal dismissed.
Serial No 61/2000
File No FCA 67/1999
RICHARD PITT & SONS PTY LTD v
HYDRO-ELECTRIC COMMISSION
REASONS FOR JUDGMENT FULL COURT
COX CJ
6 June 2000
The appellant company, the shareholders of which are members of the Pitt family, held leases of three tracts of land owned by the respondent Commission in the Bronte area and used them for grazing purposes. Members of the family had occupied two of the tracts as lessees for some 30 years prior to 1981 at a relatively modest rent. In 1981, the respondent advised the appellant and other lessees in the district that new conditions and increased rentals were to be imposed. After negotiation, leases of these two tracts were entered into in late 1981 and after a successful tender by the appellant in respect of the third tract, a lease of it was likewise entered at that time. All leases were in similar form for a period of six years, with provision for an extension for a further term of six years from 1 June 1987. In 1993, the leases were extended by another two years and later by yet another 12 months, being finally terminated by notice to quit in 1997. The leases contained provisions for review of rental by the respondent Commission after the first three years. Effectively the Commission was in a position to dictate the quantum of rent every three years until 1993 and thereafter to set it for the two extensions it granted. The leases also contained provisions requiring the lessee to erect and maintain stock-proof boundary fences and to manage the lands in a good and husband-like manner and to keep them at all times in good heart and condition and not to allow any part to become impoverished.
Not long after the signing of the leases in February 1982, a fire occurred causing significant damage to the leaseholds. The learned trial judge found that fencing was destroyed and much of the pasture rendered unfit for grazing. In an action by the respondent Commission against the appellant seeking recovery of the land and payment of mesne profits from the termination of the leases in 1997, the appellant raised a counterclaim seeking payment of sums expended by it after the fire in re-seeding and fertilising the properties with superphosphate and also in re-erecting fences and stock yards. This expenditure involved the outlay of $52,000 for purchasing, carting and spreading seed and superphosphate in February/March 1982 and $29,000 therefor in March - June 1983; while in 1982 $20,000 was expended on fencing and yards. Further sums amounting to $52,000 were spent on superphosphate in 1985 and in 1987.
The appellant pleaded its counterclaim on a number of bases which arose out of discussions between its secretary, Mr Richard Pitt, and an officer of the respondent Commission, Mr Linton, in March 1982. The appellant's adviser, Mr Douglas Dickinson, was also present at the meeting. The first plea alleged an agreement to the following effect:
"22On 5 March 1982 at the Websters property office in Hobart, the plaintiff by its servant, agent or officer John Linton, and the defendant by its director Richard Pitt orally agreed:-
(a)that the defendant would immediately re-sow the leased land with grass seed and apply super-phosphate;
(b)that the costs of effecting such works would be borne by the plaintiff; or alternatively
(c)that the plaintiff would reduce or not increase the rental of the leased lands for such period sufficient to enable the defendant to recoup the costs of effecting such works.
(hereinafter referred to as 'the agreement').
Particulars of Conversations Comprising the Agreement
The substance of the conversations comprising the agreement were that Mr Linton said to Mr Richard Pitt that he was concerned about the damage done to the leased lands by the fire and said that Mr Pitt should carry out re-sewing with seed and supering immediately at the Hydro-Electric Commissions expense to stop the property eroding and the top soil being lost. Mr Linton also told a Mr Doug Dickinson (who was also present at the meeting) that he should write a letter to the Hydro-Electric Commission with the initial costs of re-seeding and supering to formalise what had been discussed. Mr Linton also said to Mr Pitt that the Hydro would assist with the payment for works and would reimburse Mr Pitt through a reduction of rent or payment of compensation or both. To all of these propositions Mr Pitt and Mr Dickinson assented.
22AIn the premises of paragraph 22(c) hereof, it was an implied term of the agreement that the plaintiff would not require the defendant to quit the leased lands unless and until the defendant had recouped the costs of effecting such works (hereinafter referred to as 'the implied term').
23Pursuant to the agreement, between February 1982 and December 1986, the defendant re-sowed, or alternatively caused the leased lands to be re-sowed with grass seed and applied or alternatively caused the application of, super-phosphate (hereinafter referred to as 'the works').
Particulars of Causing Re-sowing and Application
The grass seed and super-phosphate were respectively sowed and applied by a partnership known as Messrs R B K Pitt & Partners ('the partnership') at the direction of the defendant.
Particulars of Works
See annexure 'B'
24 (a) The cost of the works was $150,000;
Particulars of Cost of Works
See annexure 'B'
(b)the works effected an improvement in value to the leased lands ('the increase in value') full particulars of which shall be provided prior to trial herein.
Particulars of Improvements
See annexure 'B'."
In the alternative, it was pleaded:
"28 Further or alternatively:-
(a)on or about 5 March 1982 the plaintiff by its servant, agent or officer John Linton orally represented to the plaintiff (sic) that
(i) the defendant had its authority to perform the works; and
Particulars of Authorised Works
The plaintiff authorised the defendant to undertake the re-sewing of grasses and the application of super-phosphate sufficient to effect the stabilisation and protection of the soils, and to facilitate the recommissioning of the leased lands for the grazing of stock.
(ii) the plaintiff would bear the costs of the works; or alternatively
Particulars of Costs to be Borne
All material and labour costs associated with the re-sewing of grasses and application of super-phosphate.
(iii)that the plaintiff would reduce or not increase the rental of the leased lands for such period sufficient to enable the defendant to recoup the costs of effecting such works.
such that the relationship of principal and agent was established between them ('the relationship') from which relationship the plaintiff would not be free to withdraw;
Particulars of Service, Agency or Office of Linton
Mr Linton was employed by the plaintiff as its property manager, and as such had actual and apparent authority to negotiate, make representations on behalf of, and bind by contract, arrangement or understanding the plaintiff.
Particulars of Conversations Comprising the Representation
The defendant repeats and relies upon the particulars sub-joined at para22 hereof.
Particulars of Relationship of Principal and Agent
The terms of the agency, other than those implied by operation of law, were as follows:
AThat the defendant had the plaintiff's authority to perform works on the leased lands on behalf of the plaintiff;
BThat the plaintiff would bear the costs of the works so performed, either by direct reimbursement of the defendant or by reducing or not increasing the rental of the leased lands for such a period sufficient to enable the defendant to recoup the costs of effecting such works.
(b) acting in reliance on the relationship, the defendant performed the works;
(c) it is unconscionable for the plaintiff to deny:
(i) the existence of the relationship; or
(ii) its liability to bear the costs of the works performed by it agent; or
(iii)that it may not require the defendant to quit the leased lands without affording the defendant any recoupment of the costs of effecting the works;
(d) in the premises the plaintiff is estopped from denying
(i) that in performing the works, the defendant was its agent; and
(ii) its liability to bear the cost of the work;
(iii)that it may not require the defendant to quit the leased lands without affording the defendant any recoupment of the costs of effecting the works."
The learned trial judge rejected the claim that there was a binding agreement as pleaded in par22 of the defence and counterclaim. He found that a meeting had occurred as particularised and that Mr Pitt raised with Mr Linton the question of the cost of rehabilitation of the properties and that Mr Linton agreed that the work was necessary and could be undertaken with the approval of the Commission. Mr Pitt did not need the Commission's permission and his Honour observed that the appellant may well have been obliged by the terms of the lease to undertake at least part of the work involved. Nevertheless, Mr Linton expressed general approval of the appellant's intended action. His Honour found that:
"Mr Pitt was entitled to believe, at the conclusion of the meeting, that Mr Linton, as property management officer, would ensure that the Commission would act in good faith and would make some future accommodation in recognition of his expenditure of capital. But there was no concluded or binding agreement. Even if the version of Mr Pitt is accepted in full, it is impossible to identify the terms of the agreement in any precise or enforceable manner. On his version, it is not certain that the Commission would pay the entire sum expended by him, whether future rental would be reduced by a specified amount, or that his tenure would be for an identified period. At best, Mr Pitt had an expectation that some allowance would be afforded the company's expenditure."
Following the meeting and in accordance with a request by Mr Linton, Mr Dickinson wrote to the Commission on 10 March 1982 in the following terms:
"I wish to confirm our telephone conversation re the lease of the Bronte land to Richard Pitt and Sons of Ouse.
As clients of Webster Limited we and they are concerned that as a result of the unfortunate fire in February 1982 that [sic] their leasehold property was totally burnt.
The lessees are concerned about the devastation and lack of production as a result of the fire. They have decided to super and re-seed the areas of open country.
This decision will cost approximately $50,000 which excludes fencing and stock yard rebuilding.
With your approval work will commence this week, weather permitting. It is hoped that their efforts in re-establishing improved pasture will not be taken into account in later years for rental assessment."
By letter dated 2 April 1982 and addressed to Mr Pitt, the secretary of the Commission wrote:
"GRAZING BLOCK AT BRONTE
'FINLAYS'I refer to discussions held with our Chief Surveyor, Mr J Linton and confirm that the Commission will not be taking into account, when determining the rental of the second term of three years, pastoral improvement which may result from the accelerated use of seed and superphosphate etc, the use of which has been brought about by the damage caused by the February bush fires."
The letter expressly referred only to the smallest of the three blocks, namely "Finlays", a lot of 309 hectares which had been the subject of the appellant's tender. Nevertheless, his Honour held that it was intended to apply to all three lots as a copy was sent to Mr Dickinson.
His Honour then made a finding that "there was an understanding that the defendant would not be disadvantaged by its expenditure and that any future assessment of rental would reflect that understanding". His Honour made other observations which may not have amounted to formal findings because of the way they were expressed, but insofar as they advantaged the appellant in illuminating the extent of the respondent's alleged promise, I will treat those parts in bold print as findings for present purposes. He found:
· that Mr Linton's concession of the possibility of a discussion having dealt with the question of compensation in the event that the Commission breached its leasehold obligation "does not warrant the conclusion that he did other than repeat his earlier statement that the defendant would receive fair treatment".
· that "The plaintiff gave comfort in statements made by one of its officers that it would act fairly and honourably in its future dealings with the defendant over rental and tenure".
· that "The representation made by an officer of the plaintiff that it would take into account the expenditure of the defendant in its future dealings did not constitute an inducement for the defendant to act to its detriment in reliance upon the plaintiff's representation".
· that "In the circumstances of this case, the evidence favourable to the defendant is capable of supporting the following conclusions:
"(1)(a) The defendant expected that it would receive favourable treatment from the plaintiff for its expenditure of capital in 1983. It had no basis for such expectation in relation to its later expenditure.
…
(2)The plaintiff gave comfort to the defendant in relation to its initial decision to expend capital in 1983. That confidence was to the effect that the expenditure would be taken into account in the assessment of future rent and that the plaintiff would look favourably on a grant of extended tenure.
(3)The defendant acted, in part, on the assumption or expectation of the representation. …
(4)The plaintiff knew that the defendant was intending to expend capital."
The appellant does not claim that some other findings as to the representations of the respondent ought to have been made. The findings I have adverted to above illustrate the scope of the promise at its highest from the appellant's point of view. The attack is upon the learned trial judge's conclusion that the respondent in fact fulfilled the promise. The grounds of appeal are as follows:
"1That the learned trial judge erred in fact in concluding that the defendant received a benefit in the form of a rental discount from the plaintiff to reflect capital expenditure by the defendant and in concluding that account was taken of the capital expenditure made by the defendant;
2That the learned trial judge erred in fact and in law in concluding that the defendant received a benefit of increased productivity resulting from its expenditure without a commercially assessed rental increase;
3That the learned trial judge erred in fact and in law in concluding that the defendant failed to establish detriment by reference to actual losses outlayed [sic] in reliance upon a representation by the plaintiff;
4That the learned trial judge erred in fact and in law in concluding that the defendant has not established its claim based on unconscionable conduct or promissory estoppel;"
The promise did not involve a commitment to off-set the full amount of capital expended by the appellant against future rental. Mr Dickinson's written request on behalf of the appellant was that having regard to the intention of the appellant to immediately super and re-seed the areas of open country at an anticipated cost of $50,000 exclusive of fencing and stock yard building costs, it was "hoped that their efforts in re-establishing improved pasture will be taken into account in later years for rental assessment". The Commission's written response was that:
"… the Commission will not be taking into account, when determining the rental of the second term of three years, pastoral improvement which may result from the accelerated use of seed and superphosphate etc, the use of which has been brought about by the damage caused by the February bush fires".
When the time came for a reassessment of the rent in 1984, the Secretary of the Commission instructed the Valuer-General, on 9 March 1984, to determine rentals for the ensuing three years for each of the three properties and for four other properties in the general area leased by other parties. Details of each property, lessee, current rent and area were set out in that letter, which concluded:
"The grazing lands were severely damaged by a major bush fire in February 1982 and as a result the lessees accelerated the use of seed and superphosphate to re-establish and improve the pasture.
Please give appropriate consideration to these circumstances when making your assessment."
On 25 May 1984, the Valuer-General assessed "the fair rentals for the next three years" in respect of each of the seven properties. In respect of the appellant's leases, he assessed rental as follows:
"BLOCK
AREA
RENTAL PA
Scrub Run, Part Long Marsh
2,024 ha
$8,000
Woodwards & Cattle Paddock
852 ha
$4,600
Finlays
309 ha
$3,640"
These rentals constituted an increase on those payable under the 1981 leases, the rental for "Scrub Run" rising from $7,000 per annum, for "Woodwards" from $4,032 per annum and for "Finlays" from $3,585 per annum. Nevertheless, the mere fact that the rental increased does not necessarily suggest that the Commission, in adopting the new rentals, resiled from its written promise of not taking into account pastoral improvement due to the accelerated use of seed and superphosphate, nor resiled from any of the versions of the promise I have set out above, and in particular the specifically found understanding "that the (appellant) would not be disadvantaged by its expenditure and that any future assessment of rental would reflect that understanding".
The respondent Commission called a Mr Kyle of the Valuation Branch who had set the rentals in 1984 and subsequently as well. He explained that the rental for 1981 had been set using two factors, the first a factor which reflected the assumed or notional capacity of the land in question to carry stock expressed as a unit known as a Dry Sheep Equivalent or DSE, and the second, a factor expressed as a Dollar factor representing the value of the use of the land per annum per unit of stock. The latter factor was calculated at $3.50 per DSE in 1981 and in 1984 it was calculated at $4. He said he calculated that factor by reference "to the few comparable rentals that were available". The DSE used in 1981 had been 2,000 in respect of "Scrub Run", 1,150 in respect of "Woodwards" and 850 in respect of "Finlays", a total of 4,000 overall Thus the rental for "Scrub Run" was then set at $7,000 (or $3.50 x 2000 DSE), for "Woodwards" at $4,025 (or $3.50 x 1,150 DSE) and calculated in respect of "Finlays" at $2,975 ($3.50 x 850 DSE), but in fact demanded at $3,585 because that was the rental offered by the lessee in its tender for that property.
In his evidence-in-chief, Mr Kyle was asked if he had been requested to re-assess the rentals in 1984. He agreed that he had been and referred to the letter of 9 March 1984 confirming that he had been asked to take into account the special factor of the accelerated use of seed and super, to which I have already adverted. He was then asked what the rentals were which he assessed in 1984 and how he assessed those rentals. He replied:
"The base carrying capacity remained the same for the three subject properties; a rate of $4 per dry sheep equivalent was used."
Although he did not expressly say that he took account of the factor he was asked by the Commission to allow for, the only inference reasonably open was that he did make allowance for it by keeping the DSE factor at 1981 levels, notwithstanding that the accelerated use of seed and super was likely to, and indeed shown by other evidence, to have increased the productivity and hence carrying capacity of the land. He was not cross-examined on this. No suggestion in cross-examination was made that the DSE would for any other reason have stayed the same, nor that his assessment failed to take into account the factor adverted to by the Commission.
As the appellant's case at trial was based upon the proposition that, on whatever basis pleaded, the obligation of the Commission was to repay the whole of the expenditure laid out by the appellant, this may explain why little regard was paid to whether or not the appellant had been given favourable treatment in the calculation of rentals.
In August 1986, the Secretary to the respondent Commission wrote to the appellant confirming that the 1984 review of rentals did take into account the extraordinary expenditure on seed and fertilising after the February 1982 fires. In 1987 and again in 1990 when rentals were reviewed, the Valuer continued to use the 1981 DSE for each block. Indeed, rental calculations have always since been made using that DSE figure.
The learned trial judge, in testing the adequacy of the respondent Commission's fulfilment of its promises to the appellant, noted that the appellant gained advantage from the retention of the old DSE in calculating rent, notwithstanding the increased productivity and hence carrying capacity of the land. The appellant challenges his use of actual stock carried on the land as compared with the notional DSE set in 1981. It is true that a farmer may over-stock or under-stock his property and that the actual numbers carried do not necessarily indicate that a fair DSE would be the same. However, according to the appellant's answers to interrogatories, the number of livestock carried over all did substantially increase after the seeding and fertilising process had been conducted and Mr Pitt, in answer to questions as to the DSE of each property, said he had calculated the DSE on the basis of the sheep carrying capacity of the properties. A comparison of these figures shows that in January 1984, the combined annual stock and the DSE calculated by Mr Pitt was 4,100 compared with 4,000 DSE used by Mr Kyle and that it rose in each successive year to 4,400, 4,800 and 5,300 respectively. Thus in 1987 when rent was again calculated, the combined DSE of the three properties as at 1981, namely 4,000, was again used applying a Dollar factor of $5, whereas the actual number of DSE units on the properties was 1,300 more, on the face of it a discount of $6,500 per annum for the following three years; while between 1984 and 1987, the discount amounted only to $400 per annum, or $1,200 for the last three years of the initial term of the lease. Using the same methodology, his Honour calculated that over the whole period of the lease after 1984, savings in the order of $120,000 had been effected by the appellant by virtue of the use of a constant DSE which, at least in later years, was significantly less than the figure at which DSE might otherwise have realistically been determined. Some of those figures are, with respect, misleading because actual DSE capacity for each year has been used in the calculation, whereas it is reasonable to suppose that only the DSE capacity as at the beginning of any three year period would have been used and any increase in carrying capacity in the remainder of the term regarded as relevant only to the assessment of DSE at the next review date. Nevertheless, the method used by his Honour does indicate, even making appropriate reductions for this consideration, that if actual DSE capacity at the beginning of each rental period had been used rather than the 1981 DSE capacity, additional rent of over $100,000 would have been called for.
I confess to some unease about the respondent's assertion that the 1984 review of rentals did take into account the extraordinary expenditure on seed and fertiliser after the February 1982 fire and that this was sufficient to satisfy the appellant's equity created by its reliance on the latter's promises. The use of the DSE set in 1981 rather than the actual stock numbers (equated by Mr Pitt for the purposes of the answers to interrogatories as an actual DSE) produced the result of reducing the rent otherwise payable by a paltry $400 per annum over all. It is difficult to see how this was anything but an arbitrary estimate of the value of any pastoral improvement resultant upon the accelerated use of seed and super after the fires, as promised in the Secretary's letter of 2 April 1982. If actual figures ought to be relied upon, the DSE had improved not from the base figure of 4,000 set by Mr Kyle in 1981 to 4,100, but from an actual figure of 2,400 (although this figure does not include any DSE for "Finlays", which presumably was not, for some reason, carrying any stock immediately prior to the fires). There was no evidence how Mr Kyle went about making the assessment of the improvement effected by the accelerated use of seed and super. Even assuming "Finlays" was properly assessed as having the estimated DSE of 850, there was an improvement in carrying capacity from 3,250 DSE to 4,100 which should have been taken into account in assessing the new rental. That is not to say that the new rental should have been reduced by the dollar factor multiplied by the difference in DSE, for it was not the improvement alone for which allowance as a factor had to be made, but the improvement occasioned by accelerated use of seed and super. That in turn must surely depend upon when, in the ordinary course of events (or if at all) seeding and fertiliser would be required and in what quantities. As to taking into account the extraordinary expenditure referred to in the letter of 2 April 1982, there is no evidence that Mr Kyle was ever informed what it was and on what it had been outlaid. Indeed, he was told to apply the factor of giving appropriate consideration to the circumstances that "the grazing lands were severely damaged by a major bush fire in February 1982 and as a result the lessees accelerated the use of seed and superphosphate to re-establish and improve the pasture" in assessing rentals in respect of all seven leases at Bronte, not just those of the appellant, when other evidence shows that the damage to the remaining four blocks varied considerably and there was no evidence that the other lessees took any remedial measures. Once again, that is not to say that he did not undertake appropriate enquiries, but the strong impression that I get is that the simple expedient of not increasing a notional DSE (which may or may not have been realistic in any event) was regarded by Mr Kyle as the appropriate way to make the allowance required. Confining myself to the first review, I am quite unpersuaded that in setting the rental at the figure it did, the respondent Commission satisfied the appellant's equity.
Nevertheless, I can detect no error in the learned trial judge using a DSE calculated by reference to actual stock numbers as a guide in his determination of the question whether or not any detriment suffered had been recompensed and hence whether or not the respondent could be said to have acted unconscionably and to have resiled from its promises. The appellant argues that to use actual stock numbers is contrary to the practice attested to by Valuers Lewis and Dickinson who, it is said, claimed that an assessed carrying capacity rather than the actual number of stock run should be used in valuing pastoral land. Mr Lewis did not, however, state the proposition as baldly as that. He said, in a report tendered in evidence, that:
"Rental values of grazing land are based on the carrying capacity of the land … Rental value since April 1997 has been assessed at $10,400 per annum or $200 per week. It should be emphasised that this is an approximate estimate of rental value only. Full access to the lessee's stocking records including the time that each class of stock remained on the property is required in order to derive a more accurate rental value of the subject properties".
Mr Dickinson, who did a valuation of the land as at 1987, used a similar method, multiplying the DSE by a Dollar factor of $95, the difference in the size of that factor from Mr Kyle's figures being that the latter was assessing a rental value compared with Mr Dickinson's valuation of the freehold. Nevertheless, Mr Dickinson stressed that "the basis of the valuation for this type of country is basically on carrying capacity". For the purposes of his valuation, Mr Dickinson determined the carrying capacity of the properties as at 1987 at 5,300 DSEs, a figure 500 greater than the number being run at that time on the properties, according to Mr Pitt, and 1,300 higher than the DSE on which the respondent calculated rental. Obviously reliance on actual stock where the property was demonstrably under-stocked would produce an unrealistic assessment of a fair rental. But when the records show a consistent, and indeed increasing, level of actual stocking over more than a decade, reliance on actual stock numbers must give reasonable guidance as to what stock the property is capable of carrying. I conclude that in retaining the DSE at 1981 levels in calculating each rental review throughout the remaining 12 years of the tenancies after 1984, the respondent was foregoing, especially from 1987 onwards, substantially higher rentals which could have been justified by the proven increased carrying capacity of the blocks. A conclusion that the appellant thereby gained a benefit in the order of $100,000 by reason thereof is, in my view, amply demonstrated.
The respondent concedes that at trial the appellant established that the respondent promised, in effect, that it would act in good faith and would make some future accommodation in recognition of the appellant's capital expenditure, that it would not take into account, when determining the rental of the second term of three years, any pastoral improvement resulting from the accelerated use of seed and superphosphate brought about by the bushfires, that it would not disadvantage the appellant for its expenditure and that any future assessment of rental would reflect such an understanding, and that it would look favourably upon a grant of extended tenure. The appellant further established that on the basis of those promises, it acted to its detriment at least by expending $50,000 on seed and superphosphate earlier than it might otherwise have been required to do so and in those circumstances equity would not allow the respondent to resile from its promises. However, the learned trial judge found that the respondent did take into account the capital expenditure when assessing rentals in that it made no allowance in such assessments for any increased carrying capacity occasioned by the re-sowing and the use of superphosphate and that it afforded the appellant additional tenure.
Brennan J (as he then was) expressed the relevant principle in The Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 428 - 429 in these words:
" … equitable estoppel yields a remedy in order to prevent unconscionable conduct on the part of the party who, having made a promise to another who acts upon it to his detriment, seeks to resile from the promise. The remedy is to effect what Scarman LJ called 'the minimum equity to do justice' in Crabb v Arun District Council (1976) Ch 179 at p 198."
It was for the appellant on its counterclaim to establish that the respondent had resiled from its promises and that as a result the appellant suffered a detriment which was not compensated for by such allowances as the respondent made to it, thereby leaving outstanding a minimum equity in terms of monetary compensation. Having regard to the allowances made by the respondent, I am of the view that the appellant has been amply compensated and that there is no outstanding equity which it can now demand of the respondent. It has never been entitled to a refund of its entire expenditure, even prior to 1985, still less after that date. It had no entitlement to any allowance in respect of boundary fences which were its responsibility under the leases. In my view, the grounds of appeal are not made out, the verdict cannot be assailed and the appeal should be dismissed.
File No FCA 67/1999
RICHARD PITT & SONS PTY LTD v
HYDRO-ELECTRIC COMMISSION
REASONS FOR JUDGMENT FULL COURT
UNDERWOOD J
6 June 2000
I agree with the Chief Justice's reasons for judgment and the order that he proposes be made in this appeal.
File No FCA 67/1999
RICHARD PITT & SONS PTY LTD v
HYDRO-ELECTRIC COMMISSION
REASONS FOR JUDGMENT FULL COURT
CRAWFORD J
6 June 2000
For the reasons given by the Chief Justice, I agree that the appeal should be dismissed.
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