Salienta v Clancy

[1999] NSWSC 916

CITATION:	SALIENTA v CLANCY & ANOR [1999] NSWSC 916
CURRENT JURISDICTION:	EQUITY
FILE NUMBER(S):	2747 OF 1998
HEARING DATE(S):	9 &10/3; 7-11 & 30/6; 1 & 2/7/99
JUDGMENT DATE:	14 September 1999
PARTIES :	Salienta Pty Ltd v. Stephen William Clancy & Anor
JUDGMENT OF:	Bryson J at 1

COUNSEL :	I.G. Harrison SC and A.J. McInerney for Plaintiff M. Einfeld QC and G. Parker for Defendants
SOLICITORS:	Hunt & Hunt for Plaintiff Greaves Wannan & Williams for Defendants
CATCHWORDS:	VENDOR and PURCHASER; PROPRIETARY ESTOPPEL; AGRICULTURAL TENANCIES; - Forsyth QC and his trust co. owned 12000 ac Yarrawah at Hay and permitted Clancy and his trust co. to conduct operations including grazing and cropping from October 1992 until Forsyth died in August 1997. During this time Clancy carried out extensive irrigation works and other improvements with Forsyth's knowledge approval and encouragement and earnt large sums from operations. The basis of dealing was recorded in a long series of letters and several documents - Option, Memorandum, Contract and Licence. Contract was poorly drafted by Forsyth and neogtiations for over 2 years between solicitors for formal contract to be exchanged did not result in exchange. Several weeks before Forsyth's death Clancy objected to the price and contended it was unfair and did not give credit for his improvements. Forsyth's executors treated this as repudiation, gave notice of termination and sued for possession. Clancy disputed that the Contract was intended to be binding, alleged that it was unconscionable, alleged a Proprietary Estoppel and relied on the Agricultural Tenancies Act. These defences failed on the facts, principally (1) the Contract was intended to be binding (2) If there had been room for Proprietary Estoppel, the property was held out as available only on payment of Forsyth's price, which Clancy was unwilling to pay (3) there was no sharefarming arrangement as between Forsyth and Clancy.
ACTS CITED:	Agricultrual Tenancies Act 1990 ss.19, 27.
CASES CITED:	Austotel Pty Ltd v. Franklins Selfserve Pty Ltd (1989) 16 NSWLR 502 at 604 Cameron v. Murdoch (1986) 63 ALR 575 Dudgeon v. Chie (1954) 55 SR (NSW) 450 Dudgeon v. Chie (1955) 92 CLR 342 at 347 Plimmer v. Wellington Corporation (1884) 9 App. Cas. 699 Silovi Pty Ltd v. Barbaro & Ors (1988) 13 NSWLR 466 Waltons Stores (Interstate) Ltd v. Maher (1988) 164 CLR 387
DECISION:	See para.114

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRYSON J.

TUESDAY 14 SEPTEMBER 1999

2747 of 1998 SALIENTA PTY LTD v STEPHEN WILLIAM CLANCY & ANOR

JUDGMENT

1   HIS HONOUR: The litigation and the parties. These proceedings relate to possession and ownership of “Yarrawah”, a rural property in the Hay district said to contain approximately 12,000 acres. Yarrawah is the land in Certificates of Title Volume 14803 Folio 20 and Identifiers 9/756766 and 13/756766. There are now extensive irrigation works on the property, almost all of which were constructed by the defendants since the relevant events opened in October 1992. 2   The Arrangement of the Judgment.

The litigation and the parties 1
Four documents - Option, Memorandum, Contract, Licence. 5
The pleadings 15
Approach to fact finding 21
The principal issues 22
The history of the parties’ relationship 25
The end of the relationship 49
The legal effect of the Memorandum 54
The legal effect of the Contract 56
The legal effect of the Licence 60
The Improvements 67
Proprietary Estoppel 77
Unconscionable Contract 94
Sharefarming 98
Termination of the Licence 100

3   The Plaintiff Salienta Pty Ltd was under the control of the late Mr Neil Harry Mark Forsyth Q.C., during his lifetime. Mr Forsyth was a member of the Inner Bar of Victoria; he died on 29 August 1997. Mr Forsyth was hospitalised and under treatment for some months from about the middle of 1994 at which time it was known that he suffered from terminal bowel cancer. He informed Mr Clancy of this in August 1994. He was not an invalid at all times and displayed vigour in his dealings until 1997; in that year it was clear that he was gravely ill and that his life was closing. Many pieces of evidence including recitals in contractual documents and letters and assertions by Mr Forsyth are to the effect that Salienta held Yarrawah in trust or as nominee for Mr Forsyth. These statements must be attributed to Salienta as Mr Forsyth was the only principal in its affairs and Salienta was wholly under his control and direction. Although there is no evidence of the formal constitution of any trust, there is no reason to doubt that there was a trust and the affairs of the parties were conducted on the footing that there was. 4   In all events relevant to these proceedings, Rosefarms the second defendant was wholly under the control and direction of the first defendant Mr Stephen William Clancy. There is no sign in the evidence that either Salienta or Rosefarms functioned under a board of directors, and acts of their respective principals are attributed to the companies themselves. 5   Four Documents. The litigation revolves around four documents which relate to rights to occupy and own Yarrawah. The parties dispute the effect of those documents, and the defendants dispute whether they were all intended to have effect and truly express arrangements, and the defendants claim equitable relief against their operation. 6   The first is the Option. This is a licence together with an option to purchase the property, recorded in a letter from Mr Forsyth to Mr Clancy, dated 27 October 1992 - Exhibit 1, Document 2. Mr Forsyth set out “the terms we have agreed upon for a licence, and option to purchase Yarrawah.” The parties are identified as follows:

“1. Licensor: Salienta Pty. Ltd. (registered proprietor) and Neil Harry Mark Forsyth (beneficial owner).
2. Licensee: Rose Farms Pty. Ltd. as trustee of the Clancy Bros. Family Trust.”

7   The terms provided for a licence commencing on 1 November 1992 and ending on 30 June 1996, and a licence fee of $1170 four weeks payable in arrears; that is, approximately $23,010 per year. An option to purchase was granted in these terms:

“12. Option to Purchase : The licensee is hereby granted an option to purchase the whole of the property by giving written notice to that effect at any time before 1 July 1996.
13. Purchase Price : The base price will be $1,625,000. It will be increased by:
(a) $1,000 for every week which elapses between 1 November 1992 and
the date of settlement of the purchase;
(b) a further $50,000 if the date of settlement is later than 1 November
1994; and a further $50,000 if the date of settlement is later than
1 November 1995; and
(c) any further capital expenditure by the licensor (with the consent of
the licensee) between 1 November 1992 and the date of exercise of the
option (such as acquisition of further water licences).”

8   The time-based increases in the base price over 191 weeks would amount to $291,000 by 30 June 1996 when the Option expired. The price was also to be increased by any further capital expenditure made by the licensor with the licensee’s consent. In addition by cl.6 the licensee was to complete a program of capital improvements “to be agreed between us from time to time” having a value of not less than $1000 per week. The minimum obligation for expenditure over 191 weeks on capital improvements was $191,000. By cl. 15 a more formal written agreement was to be drawn up by solicitors if either party desired. 9   An important part of the context in which improvements were carried out is that under the Option of 27 October 1992 Mr Clancy was obliged to carry out a program of improvements. On the one hand Mr Forsyth had an entitlement to have improvements carried out and an economic interest in having them carried out, because they would accrue to him if Mr Clancy did not exercise his option or otherwise acquire the property. On the other hand Mr Clancy could contemplate getting the benefit of his improvements by acquiring the property in accordance with the Option or any other arrangements between himself and Mr Forsyth. 10   The second document is the Memorandum dated 13 December 1994, Exhibit 1, Document 15 headed “Contract for Sale of Yarrawah”. It is preceded in Exhibit 1 by two unsigned generally similar memoranda. The parties are referred to as follows:

“1. Vendor: N.H.M. Forsyth;

Purchaser: Steve Clancy or nominee approved by vendor.”

The price was $2,115,556, payable by instalments of $250,000 each year on or before 30 June 1995, 1996 and 1997, and the balance on or before 30 June 1998. There was to be interest on the whole amount at 2% payable quarterly until 30 June 1997 then at 10% payable quarterly, and a further $50,000 per annum for each year 1995 to 1998 inclusive. This introduced the terminology that the payments made pending payment of the price were referred to as “interest” on the amount of the price. Sometimes Mr Forsyth referred to such payments as “agistment”. In economic function they were the same as the Licence fee under the Option. The Memorandum was signed by Mr Forsyth and Mr Clancy. It does not contain any express term conferring a right of occupation before settlement.

11   The third document is the Contract dated March 1995, Document 17 headed “Contract for Sale of Yarrawah”. The copy in evidence is signed by Mr Forsyth: other evidence shows that Mr Clancy received a copy in March, later showed it to his solicitors and then signed a copy in May or June and returned it to Mr Forsyth by 15 June 1995. The Contract provided for the sale of Yarrawah by Mr Forsyth to Mr Clancy for $2,327,111, for instalments of $250,000 to be payable on 30 June 1996, on 30 June 1997 and on 30 June 1998, and the balance on 30 June 1999. Clause 5 set out a table of interest payments payable at the end of each quarter from 30 June 1995 to 30 June 1999. The interest rates were not stated and the amounts payable on each 30 June were much greater than the amounts payable on other quarter days. There is no provision in this document conferring an entitlement to possession on the vendor, but as with the Memorandum of 13 December 1994 the obligation to pay interest on the purchase price suggests a common assumption that the purchaser would be in occupation. 12   The Contract dated March 1995 is quite clear in expressions which establish that Mr Forsyth as beneficial owner was the vendor, the purchaser was Mr Clancy and the subject of the sale was the land Yarrawah, together with incidental rights. Clause 13 provided for transfer of the whole of the issued capital of Salienta to the purchaser. On a reading of the whole terms of the document it is clear that Salienta was registered owner of the land and that the transfer of the shares in Salienta was incidental to the main subject matter. It could I suppose have been thought that transfer of control of Salienta while Salienta was still the registered owner was means of effecting transfer of the land which the parties could adopt; the contract did not provide that they had to adopt those means. 13   The fourth document is the Licence, Document 30 entitled “Licence to Occupy Land”. This document refers to itself as a deed and was signed sealed and delivered by Mr Forsyth, Salienta and Rosefarms who were named as the parties. Mr Clancy was not named as a party. The date of the deed is given as 1996 and the copy bears no other date except an inscription suggesting that it was word-processed on 2 August 1996. Recitals refer to Salienta as registered proprietor and Mr Forsyth as beneficial owner, and refer to the Contract dated March 1995 as a Contract by which Mr Forsyth had agreed to sell Yarrawah to Mr Clancy. The recitals also establish that Salienta granted the licence to Rosefarms as Mr Clancy’s nominee, at the direction of Mr Forsyth. The Deed conferred a licence to occupy the land from the possession date 1 March 1995 for the Permitted Use, which was defined and meant “…the right to farm the Land and to carry out all ancillary activities.” 14   There were many meetings, conversations and letters between Mr Forsyth and Mr Clancy from about October 1992 until Mr Forsyth died. There were also communications with solicitors and other representatives of Mr Forsyth and Mr Clancy. Mr Forsyth visited the property many times and took a close interest in the improvements and farming activities which Mr Clancy carried on there. There was a friendly personal relationship with easy communication between the two men throughout the events and until shortly before Mr Forsyth died. This relationship existed in a context where it was obvious that they were dealing with each other over ownership and use of property of significant value and in the contemplation that ownership of that property would pass for a large amount of money. Many letters from Mr Forsyth to Mr Clancy are in evidence and they contain many examples of suggestions, encouragement and expressions contemplating a successful outcome for Mr Clancy and a transfer of the property. I view these communications in the context of the contractual relationships between the parties. 15   The pleadings. The proceedings were commenced on 10 June 1998 when Salienta issued a Summons against Mr Clancy and Rosefarms. In the Further Amended Statement of Claim of 7 June 1999 Salienta seeks declarations which would establish that on or before a Notice of Termination dated 23 December 1997 which Salienta gave to the defendants, their rights of occupation under the Contract dated March 1995, the Licence or from any other source were terminated. Several alternative bases are put for this contention and, reflecting cl.2.4(b) of the Licence, the defendants’ entitlement to enter the land until 30 June 1998 for the purpose of cultivating, harvesting and removing crops planted prior to 23 December 1997 is accepted. Salienta claims judgment for possession of the property and leave to issue a writ of possession and also damages. The principal bases are that the Licence was terminated on 23 December 1997 by breach of the Contract of March 1995 and a notice based on cl.2.4(a)(iii) in that Rosefarms had not made any payments of principal and interest after September 1997, that the defendants repudiated the Contract of March 1995 by a letter dated 25 August 1997 from Mr Clancy’s solicitors to Mr Forsyth’s solicitors, Document 60. 16 In his Defence Mr Clancy takes the position that the Contract dated March 1995 was not and was not intended to be a binding agreement. For this reason he denies that he defaulted in payments under it and thereby committed a breach, and that he repudiated it. Paragraph 10 of the Defence states that the contract was not intended to be binding, that it was too incomplete or uncertain to constitute a binding legal contract, and that it was signed in such circumstances that it ought to be set aside having regard to the relationship between Mr Forsyth and Mr Clancy. It is also contended that documents required by cl.4(1) of the Conveyancing (Vendor Disclosure and Warranty) Regulation 1996 were not annexed. It is also contended that the Contract dated March 1995 an agreement for sale of the issued shares in Salienta and not for the sale of Yarrawah. 17 In its Defence Rosefarms takes a generally similar position to Mr Clancy. It also relied on subss.19(4) and 27(1) of the Agricultural Tenancies Act 1990. It also contends that Salienta was estopped by representation or alternatively by convention from claiming possession of Yarrawah and that Rosefarms was entitled to a charge over and a conveyance of Yarrawah. 18 In its Amended Cross-claim Mr Clancy and Rosefarms allege that the Contract dated March 1995 was not intended to be of legal effect and was not binding, allege entitlement to equitable relief against the March 1995 document and set up a proprietary estoppel entitling the cross-claimants to a conveyance of Yarrawah and alternatively to a charge over it. The Cross-defendants are Mr Forsyth’s executors and also Salienta. There are three executors, Mrs Brown formerly Mrs Forsyth, Mr I.R. Phillips and Mr J.W. DeWijn. 19 The pleadings and the conduct of the proceedings establish that the signatures and authenticity of the principal documents are not disputed, nor is the Notice of Termination; the dispute relates to their legal effect, and to circumstances which are alleged to create an equitable estoppel and to disentitle Salienta from relying on its rights as owner of Yarrawah. 20 Neither party has claimed to enforce the Contract dated March 1995, except in the limited sense that Salienta maintains that a right of termination of the Licence arose on breach. Indeed both parties are now prevented from enforcing the contract; Salienta and the executors by giving Notice of Termination and claiming possession, and Mr Clancy and Rosefarms by contending that it was not legally binding and by all later conduct, including the terms of their pleadings and the position taken at the hearing; and neither has claimed any remedy based on it. Salienta contends that Mr Clancy repudiated the Contract, and in my opinion it is clear from the terms of the letters that, if the Contract dated March 1995 had effect, Mr Clancy’s letter of 12 August 1997 and his solicitors’ letter of 25 August 1997 were a clear and complete repudiation of it. There is no possibility that either Mr Clancy or Rosefarms may obtain any remedy based on the Memorandum of 13 December 1994 or has any equitable estate arising from it, and they have not so contended. 21 Approach to Fact finding: Several circumstances influence my approach to fact finding and the application of the standard of proof on the balance of probabilities. One is that in substance Rosefarms and Mr Clancy make a claim against the estate of a deceased person in circumstances where Mr Forsyth’s evidence on matters in dispute is not available. There is a well-established practice of approaching claims of that kind with care and considering carefully the availability of corroborative material. Another circumstance of some importance is that the case put forward by Mr Clancy and Rosefarms involves impeaching the apparent effect of documents, including documents signed by Mr Clancy, which passed between the parties without contemporaneous challenge. A contention that these documents were not the true arrangements and do not express the true basis of action over a number of years requires careful consideration. Another is the need for clarity of expression and of proof of the representation or other circumstances alleged to give rise to an equitable estoppel. Equitable remedies of that kind are not granted unless the basis for the remedy appears clearly. 22   The principal issues. There are two principal issues in the case. The first revolves around the defendants’ principal case based on Proprietary Estoppel. It is claimed that Salienta’s conduct created an expectation that the defendants would not be evicted but would be permitted to purchase Yarrawah at a fair value having regard to the improvements they effected, that in that expectation the defendants carried out improvements, and that as a result Salienta is estopped from claiming possession and the defendants are entitled to purchase Yarrawah at a fair value having regard to the improvements which Rosefarms effected; or if not, is entitled to an equitable charge over the property. The other principal issue revolves around the defendants contention that the Contract of March 1995 does not establish the rights of the parties; and that it was not intended to have legal effect, and that, if it had legal effect, the defendants should be relieved in equity against it. To address these issues it is necessary to review the long history of the parties’ relationship. 23   Cases are not classified precisely by describing them as Proprietary Estoppel cases. Cases depend greatly on careful examination of their facts and of the circumstances which are held to render it unconscionable for a proprietor to rely on ownership of land and on the absence of any obligation under the general law to recognise a claim. Defendants’ counsel referred me extensively to the case law but I do not find in the cases cited any close or useful analogy to the present facts because the present facts are distinguished by the overwhelmingly important characteristic that the acquiescence and extensive encouragement on the one side and the extensive works performed on the other took place in the presence of explicit written arrangements which spelt out the principal advantages which each party was to expect. If the Contract dated March 1995 was binding it would remove the whole subject from the law relating to equitable estoppel; if it were not binding, its highly explicit character would make it impossible that any equitable relief to be granted would be on terms other than that the stipulated price was to be paid. 24   The remove between a case where the parties do have a contract and the subject of equitable estoppel is I think illustrated by the propositions distilled by Priestley JA from the decision of the High Court in Waltons Stores (Interstate) Ltd v. Maher (1988) 164 CLR 387. Priestley JA’s judgment embodying these propositions in Silovi Pty Ltd v. Barbaro & Ors (1988) 13 NSWLR 466 was concurred in by Hope and McHugh JJA. The fifth of Priestley JA’s propositions, at 472 was “For equitable estoppel to operate in circumstances such as those of the present case there must be the creation or encouragement by the defendant in the plaintiff of an assumption that a contract will come into existence or a promise be performed, and reliance on that by the plaintiff, in circumstances where departure from the assumption by the defendant would be unconscionable.” This proposition is not exhaustive, as there is also room for equitable estoppel to be the basis of relief in a further class of cases where the plaintiff is unable to point to an agreement which although yet unformed or unenforceable contains terms describing what he expected from the defendant; see Priestley JA’s observations in Austotel Pty Ltd v. Franklins Selfserve Pty Ltd (1989) 16 NSWLR 502 at 604. Proprietary estoppel cases typically fall within the further class so identified by Priestley JA. A lack of precision is a characteristic of many cases in this field including Plimmer v Wellington Corporation (1884) 9 App. Cas. 699 which defendant’s counsel described as the archetypal illustration, and Cameron v Murdoch (1986) 63 ALR 575 on which great reliance was placed. Where the parties’ behaviour has pointed out in detail, for example in a purported but ineffective contract, what their expectations were, the court is obliged to treat those as the expectations which were reasonable. 25 The history of the parties’ relationship. It is appropriate to look at the terms of each communication for the purposes the defendants’ claim that on a whole view of the parties’ relationship the defendants are entitled to an estoppel and equitable relief. The first significant document between the parties is Mr Forsyth’s letter of 15 October 1992 Exhibit 1, Document 1. This letter points out that what is under discussion at this stage is a licence to use part only of Yarrawah. In it Mr Forsyth stated that the licence was not to be a lease and that he was “free to go and come upon the land” as he chose. Mr Forsyth looked forward to a meeting on 24 October 1992. This letter can be looked to for interpretation of the Option, to identify the subject matter or resolve any ambiguity. 26   Exhibit 1, Document 2 is the letter of 27 October 1992, the Option. Each party accepts that this letter was fully effectual to create a licence and an option to purchase according to its terms. This was a very advantageous arrangement for Rosefarms. The payments for Licence fee $23,010 and improvements $52,000 totalled $75,010 per year, about 4.6% of the base price; and were mostly in a form the benefit of which could be taken back by Rosefarms. The licence fee per year was about 1.4% of the base price. There was no deposit, and there was no premium for the Option. Rosefarms had an immediate licence to occupy, not stated to be exclusive, an entitlement to sublet all or any of the property and an option to purchase which was available until 1 July 1996. There was no obligation to pay a large capital sum for up to three years and eight months and in the meanwhile Rosefarms could work the property. The Option was not ever exercised. 27   On 30 November 1992 the Headingly Agreement Exhibit 1, Document 4 was made between Headingly Farm Contractors Pty Ltd which Mr Forsyth controlled, and other parties including Rosefarms and Mr Clancy. Headingly agreed to provide a finance facility for $200,000 to Rosefarms. This facility was to be drawn against by Rosefarms for the sole purpose of financing capital improvements on Yarrawah. In the course of the next year it was fully drawn. The loan was assigned to Alnwick Pty Ltd on 19 February 1996 and again assigned to Stourhead Pty Ltd on 20 August 1997; these companies are also associated in some way with Mr Forsyth. 28   In 1993 Mr Forsyth purchased some water rights for the benefit of Yarrawah from a neighbour Mr Heckendorf, and he maintained that this led to his being entitled to an increase in the four-weekly payments of licence fee. This was accepted and from March 1994 payments were made at an increased rate. Correspondence dealing with this subject is Exhibit 1, Documents 6 and 7. 29   In 1994 Mr Clancy negotiated with neighbours called the Headons for the purchase of land adjoining Yarrawah. This led to negotiations in which Mr Forsyth and Mr Clancy considered arrangements under which the Headingly loan of $200,000 was to be treated as repaid, and a new loan from Stourhead Pty Ltd, also controlled by Mr Forsyth, of $1,300,00 was to be made to enable Mr Clancy to purchase the Headon property. In recompense or in part recompense for this further advance the price which was to be payable for Yarrawah on exercise of the Option, which was slowly escalating in accordance with the terms of the letter of 27 October 1992, was to be altered and was to become $2,440,556 payable by instalments of $250,000 each on or before 30 June 1995, 1996 and 1997 with the balance payable on or before 30 June 1998. Correspondence relating to this proposed arrangement appears at Exhibit 1, Documents 8, 9 and 10. These proposals did not mature, apparently due to lack of progress in dealings between Mr Clancy and the Headons. On 4 August 1994, Document 12, Mr Forsyth in a letter to his solicitors recorded the state of his dealings with Mr Clancy, which he said were an agreement in principle but had not been carried to the detail of agreeing on the appropriate adjustment. 30   The next significant correspondence was the Memorandum dated 13 December 1994, Document 15, preceded by the two unsigned generally similar memoranda and which recorded the price to be $2,115,556 payable by three instalments of $250,000 by 30 June in each of 1995, 1996, 1997 and the balance on 30 June 1998. If the Memorandum had effect it would not be possible to treat the Option of 27 October 1992 as still governing the relationship; there could be no purpose in continuing the existence of a contractual option to purchase if the parties entered into a memorandum of contract of sale of the property. The price and instalments were different. There were no provisions for capital improvements or escalation of the price and the time contemplated for settlement was extended by up to two years. There was no express provision for Mr Clancy to be permitted to occupy Yarrawah pending completion, although the parties’ behaviour clearly shows that that was permitted, and the provision for interest on the purchase price seems to contemplate that Mr Clancy would have the benefit of occupation. 31   Also on 13 December 1994 by letter Exhibit 1, Document 16 Mr Forsyth confirmed extension of the Headingly loan of $200,000 to 30 June 1997, and specified other terms . One term was “If the principal of $200,000 is not repaid in full by 30/6/97 NHM Forsyth may rescind the contract of sale of Yarrawah as if default had been made under that contract.” Mr Clancy signed this letter, and this shows his agreement to its contents. 32   The Contract dated March 1995 established another price that was higher than that in the Memorandum, namely $2,327,111.00, and a scale of payments which start a year later than in the Memorandum; $250,000 on 30 June 1996, 1997 and 1998 and the balance on 30 June 1999. In the Contract interest was payable in amounts specified for each quarter; mathematically the amounts stated represent a low rate, although no rate is stated. 33   Document 18A, Exhibit 1 is a lengthy letter dated 26 June 1995 from Mr Clancy’s solicitors to Mr Clancy seeking detailed instructions on many matters which would have a bearing on the terms of a contract for sale of Yarrawah. The letter shows that Mr Boyce, the solicitor then acting for Mr Forsyth, was to prepare a contract for sale of the property and submit it to Mr Clancy’s solicitors. Document 18A addresses many matters which had not been addressed in the documents prepared by Mr Forsyth but were appropriate for consideration when professional skills were brought to bear on a sale of a large rural property for over two million dollars. (Mr Forsyth later quoted his own solicitors as considering that Mr Forsyth’s drafting was amateurish; and so it was.) Mr Clancy’s solicitors spelt out at page 3 the view that the low rate of interest for the first two years implied that the agreed price was inflated above market value, and brought before Mr Clancy’s consideration a number of practical commercial aspects of the transaction 34   In Exhibit 1, Document 20, a letter of 7 August 1995, Mr Forsyth set out an explanation of how the purchase price of $2,327,111 had been arrived at. In doing so he recounted what he said was the effect of negotiations from time to time over the period since 27 October 1992 and the impact of various changes in the parties’ dealings. The stages were that he said that the base price in a contemplated exchange of contracts of 1 July 1994 was to be $1,888,890, that this was escalated by 4% per annum for 3 years making $2,115,556 and an extension of the contemplated time for payment of the balance to five years led to an increase of 5% per year for each of two extra years, that is a further 10% above $2,115,556 making $2,327,111. Mr Forsyth’s letter went on to discuss various considerations and contingencies affecting time and amount of final payment. This letter shows his contemplation that there might be further negotiations and movement in the parties’ positions. 35   On 18 August 1995 Exhibit 1, Document 21, Mr Forsyth’s solicitors Messrs Hunt and Hunt sent Mr Clancy’s solicitors Messrs Greaves Wannan & Williams drafts of a contract of sale of land and of a deed of release, obviously contemplating an exchange of contracts which was still to take place. Salienta was to be the vendor and Mr Clancy was to be the purchaser. The price was to be $2,327,111 with no deposit. The vendor was to provide second mortgage finance of $2,077,111 from Alnwick Pty Ltd on completion. The draft deed of release would have extinguished the Option of 27 October 1992. 36   Correspondence followed between the solicitors about the terms of the draft contract. There was discussion about the draft at a conference attended by Mr Clancy, his accountant Mr Lea and solicitors for both parties on 24 November 1995. The correspondence shows that in late 1995 and thereafter the parties contemplated that the terms of the formal contract of sale would be agreed on and that an exchange would take place. The form which the contract would take when exchanged was never settled by agreement. 37   In his letter of 5 October 1995 Exhibit 1, Document 26 Mr Forsyth encouraged Mr Clancy to plant belts of Tasmanian Blue Gum trees on Yarrawah. Mr Clancy proceeded with a planting project. 38   In a letter of 15 July 1996 Exhibit 1, Document 28 Mr Forsyth said to Mr Clancy: “Basically, we are still proceeding in accordance with the March 1995 Contract of sale signed by both of us. However, it has been agreed that Rosefarms Pty Ltd rather than you personally, should be the purchaser.” He also said: “Perhaps it is also as well to record that the present intention of the parties is to proceed with reasonable expedition to enter into a formal contract of sale, (our solicitors considering that my own drafting is somewhat amateurish); followed quite soon by a transfer of the property and a mortgage back.” In my finding this then was the intention of both Mr Forsyth and of Mr Clancy. 39   In a second letter to Mr Clancy of 15 July 1996 Exhibit 1, Document 29 Mr Forsyth recorded a change in the financial arrangements in the Contract dated March 1995. First the instalment of $250,000 due on 30 June 1996 was deferred and interest was running at 18% per annum. Secondly Mr Clancy was to obtain a first mortgage from some third party of $1,000,000 and the mortgage advance by Alnwick was to be deferred to that. There was to be a higher rate of interest on the second mortgage. 40   Another letter of 15 July 1996 from Mr Forsyth to his solicitors, Exhibit 1, Document 31, shows that he contemplated settlement of the sale in the near future and he commented: “As I pointed out to Steve, completion of the contract of sale with me is really irrelevant to his continuing negotiation. Economics effectively compels him to go ahead with the Yarrawah purchase no matter what. (He has obtained a recent valuation of 3.7M.)” 41   Document 30 in Exhibit 1 is the Licence to Occupy Land of 1996. This is not the product of communications between the solicitors who were acting for the parties in relation of the proposed exchange of contracts; it seems that one or other of them may not have known of the Licence. The Licence refers to the Contract dated March 1995, and deals with that agreement as if it were regarded by all parties to the Licence as in effect. The possession date is given in the Licence as 1 March 1995 which was the earliest possible date for the operation of that agreement, and provisions relating to termination of the licence in cl.2.4 are related to completion, rescission or termination of that agreement. On ordinary principles of estoppel by deed the Licence bound its parties to the proposition of fact that there was an agreement of March 1995. Mr Clancy himself did not execute the licence as a party to it; he participated in Rosefarms’ execution. 42   Document 46 is the second draft contract forwarded on 9 September 1996. In relation to this it was Mr Clancy’s evidence that if the proposed financiers had been able to provide sufficient finance both sides would have gone ahead with that contract. As the financiers were not so able, discussion between solicitors for the parties turned to a proposal for Salienta as vendor to provide finance for the whole of the purchase price. 43   Correspondence between solicitors about the terms of the draft contract continued after 9 September 1996 - Exhibit 1, Document 32 and others. Mr Forsyth wrote a letter of 10 September 1996 Exhibit 1, Document 36 to Messrs Morrison and Sawers solicitors for Kyabram Pty Ltd, a proposed mortgagee, in support of finance to Mr Clancy to complete the purchase. Those solicitors gave searching consideration of the proposal, but no first mortgage finance was forthcoming. 44   In a letter of 2 December 1996 Exhibit 1, Document 42 Mr Forsyth informed his solicitors (and he sent a copy to Mr Clancy) that he had agreed a new financing regime with Mr Clancy; no principal was to be paid until 30 June 2002; the price contemplated remained $2,327,111, further interest was to be paid; Alnwick Pty Ltd was to be the mortgagee and that “Steve is now anxious to proceed promptly with signing a contract and settlement. So, of course, am I.” Mr Forsyth contemplated that the solicitors would “… agree the terms of the contract and proposed mortgage.” 45   On 23 January 1997 Document 48 Kyabram Property Investments Pty Ltd declined to proceed with a proposed loan to Rosefarms. 46   A further draft contract incorporating a mortgage back was submitted on 24 January 1997 - Exhibit 1, Document 45. In this draft the contract the price was unchanged and the covering correspondence did not discuss changing it. This continued to be the position with solicitors’ correspondence and all correspondence between the parties until August 1997. This draft was more detailed and elaborate and dealt with subjects which earlier drafts had not expressly dealt with. The draft contemplated that exchange and completion would be contemporaneous. The entire price of $2,327,111 was to be secured by a first mortgage granted to Alnwick Pty Ltd, the principal to be repaid on 30 June 2002, and there were detailed provisions for interest until then. Salienta’s solicitors said: “We confirm that we are advised by Mr Forsyth that he is very ill and that he considers the completion of this transaction to be a matter of urgency.” They commented on a number of matters of detail. They also enclosed drafts of a guarantee to be given by Mr Clancy, a deed extinguishing the Option and a Licence to Occupy Land; these were to be completed at exchange. 47   On 28 January 1997 Exhibit 1, Document 47 Mr Forsyth wrote to Mr Clancy with suggestions to assist him to make an application for a working capital loan to some other lender such as a bank. His concluding comment was: “Plainly, I have a direct interest in all this, because the sounder your finances are, the more readily you will be able to perform under the mortgage. But quite apart from that, I do very much want you to reap the financial benefits from Yarrawah which your enterprise and industry deserve.” 48   Correspondence between the solicitors about the proposed exchange and completion continued in March 1997 and thereafter. Meanwhile Mr Clancy continued to make payments to Mr Forsyth referable to the Contract dated June 1995, but with some modifications which I do not understand. Mr Forsyth’s letter of 3 April 1997 Document 51 to Mr Clancy recorded the then state of these payments. Correspondence continued and in his letter of 10 April 1997 Exhibit 1, Document 54 Mr Forsyth gave Mr Clancy and Mrs Clancy warm assurance of his concern that they should reap the full rewards of their initiative, perseverance, ingenuity and hard work. On 2 May 1997 Mr Clancy’s solicitors objected to some provisions of the proposed contract. 49   The end of the relationship. There was a change in the mood and mode of expression of the correspondence with Mr Forsyth’s solicitor’s letter of 31 July 1997 Document 57. This responded and made comments on matters raised in the letter of 2 May 1997. Expressions in the letter clearly show an understanding that there was potential for a dispute; for example the letter is referred to as an open letter, although there was no reason theretofore why “without prejudice” or any other reservation should be attributed to the correspondence. Mr Forsyth’s solicitors made a statement adhering to the proposed repayment regime, with detailed comments. They reviewed various steps in negotiations, including some which are not recorded in correspondence in Exhibit 1. They commented in detail on the implications of the purchaser’s having invested a large amount of money and effort into improving the property, as was of course well known to Mr Forsyth. They gave assurances of Mr Forsyth’s continuing admiration and goodwill for Mr Clancy. They put forward Mr Forsyth’s views on the causes of Mr Clancy’s apparent financial difficulties. They demanded that various payments which, in Mr Forsyth’s view of things, had fallen due be brought up to date, including two instalments of $250,000 which had become due to Alnwick Pty Ltd on the loan, earlier the Headingly loan, and had not been paid. They concluded: “Our client regrettably wishes it to be made known to the purchaser that the time has come for it to perform in accordance with its contractual obligations or otherwise face the action that will flow.” 50   On 10 August 1997 there was a meeting at which Mr Clancy, his accountant Mr Lea, Mrs Forsyth and Mr De Wijn were present. 51   In a letter headed “Without Prejudice” and dated 12 August 1997, Document 58, addressed to Mr Forsyth and his wife, Mr Clancy stated his position. This letter was prepared for him by his accountant Mr Lea, but as Mr Clancy said in evidence, “It was my thoughts”. Mr Clancy reviewed the work which had been done on Yarrawah and many steps in the negotiation. He presented the view that the base value of Yarrawah was $700,000 and had not increased during his association with it and that the increases in value arose from expenditure by Mr Clancy. In a letter which made many assertions which were contentious Mr Clancy put forward a broad position based on the assertion that the property apart from his own efforts was worth $700,000. “I would be happy to purchase “Yarrawah” on the following basis. I believe a genuine offer for the property would be $2,400,000. From this I would deduct a modest $1,200,000 on account of my contribution. This would leave Neil with $1,200,000 for his contribution. This figure represents an extremely fair appreciation of his investment including the Headingly and Heckendorf loans”. He proposed that he would obtain $800,000 on first mortgage from a third party and give Mr Forsyth a second mortgage of $400,000 at 11% for three years. 52   The terms of the letter of 12 August 1997 show that Mr Clancy was then not prepared to treat or to continue to treat the Contract dated March 1995 as binding on Rosefarms or on himself, and the cessation of payments soon afterwards bears out this view. The position which he has taken at all times since, particularly in his pleadings and the conduct of this litigation shows that he and Rosefarms have since the last payment was made been entirely unwilling to comply with that arrangement, whether or not it is a binding contract. 53   In their reply of 21 August 1997 Document 57 Messrs Hunt and Hunt asserted Mr Forsyth’s position that the contract entered into in March 1995 was binding and enforceable and called for confirmation by 22 August that it would be performed, and otherwise threatened proceedings. On 25 August 1997 Mr Clancy’s solicitors wrote a letter Document 60 to Mr Forsyth’s solicitors which, with a narration of some facts, made a denial that the Contract dated March 1995 was binding on Mr Clancy. The letter stated that it was astonishing to suggest that it was binding, described the deal then proposed as harsh and unconscionable and threatened a claim for compensation for the value of the improvements. Mr Forsyth’s death followed within a few days and with it any communications recognisable as negotiations ended. 54   The legal effect of the Memorandum. Mr Clancy said in evidence to the effect that when he signed Document 15 the Memorandum dated 13 December 1994 he was not happy to have it represent the arrangement pursuant to which he agreed that Rosefarms would buy Yarrawah and that he was under a lot of pressure from Mr Forsyth. Mr Clancy also said that he did not believe that the document was a binding contract but only that it was an agreement in principle, meaning “a proposal as to how he would move to a contract for the purchase of the property”. 55   Mr Clancy said too that he did not believe he actually agreed with everything in Mr Forsyth’s calculation which produced the price set out in Document 15; he thought the rate of interest was too high and there was not any allowance made for the fact that Rosefarms did not have to do anything until mid-1996. I do not accept his evidence on the effect of the Memorandum. It purports to be a memorandum of a contract, it deals with the essential terms of a sale of land, and the contemporaneous arrangement in Document 16 confirms that it was a contract by providing for its rescission. 56   The legal effect of the Contract dated March 1995. Preparation of the Contract dated March 1995 followed Mr Clancy’s coming to the view that he could not make a payment of $250,000 on or before 30 June 1995, and it would seem telling Mr Forsyth that this was so. Mr Clancy’s evidence shows that he relied on himself in deciding whether he could make payments. 57   It was contended that the intention that the Contract should not be binding should be inferred from later dealings, and from the openness of the parties to discussion of terms for a more formal arrangement. Further Mr Clancy has asserted in evidence that he did not consider it binding “… bearing in mind the relationship I had with Neil” (t126, l7). The behaviour of the parties to it shows that there was room in their intentions for negotiation and modification; and the contemplation was clear that a more formal document would be entered into. 58   Mr Clancy ceased to make weekly payments in accordance with the earlier arrangements in March 1995; from that date he made payments in accordance with the March 1995 document. The first interest payment of $61,635 was paid in July 1995. This supports the view that that document was then regarded as effective to create an obligation to pay money, and effective to override the previous arrangements. Payments broadly in accordance with that document continued until September 1997. One payment was made several weeks after Mr Forsyth’s death; thereafter they stopped. Mr Clancy was unable to explain why the payments ceased and said he did not recall why that was. 59   Some things which well ought to have been attended to were not attended to. On the purchaser’s part stamp duty should have been paid but was not. The Contract dated March 1995 generally speaks at an imprudently simple level and does not deal appropriately with complexities such as the water rights and the transfer of shares in Salienta. It would have been prudent to enter into a more formal document, and the drafts produced by solicitors illustrate that many subjects had not been addressed with which it is prudent for a contract about such an elaborate matter as the sale of a property of 12,000 acres to deal. In my view what was under consideration until August 1997, through three drafts and much solicitors’ correspondence, was putting an established agreement into a more suitable form; however the established agreement remained a binding contract. There is no evidence of any express arrangement which established that the Contract dated March 1995 was not intended to be binding. In my finding the Contract dated March 1995 was binding and was intended to be. 60   The Legal Effect of the Licence dated 1996. One advantage produced by the Licence Agreement was that it established in a clear way and in writing that Rosefarms did in fact have a licence, that is the permission of Salienta, to be in occupation of Yarrawah. A licence is explicitly granted by cl.2.1, limited to the permitted use and subject to the concurrent right of the lessor to enter the land under cl.2.2. It was expedient that there should be a licence in writing in that the Option according to its terms expired on 30 June 1996 and it could not be thought that thereafter the Option conferred a licence. The parties’ conduct since late 1994 shows that they no longer treated the Option as effective, but there was no express written arrangement which established that. 61   The Licence confirmed in a clear way that the Contract dated March 1995 was treated as binding. This appears from the recitals and the references to the Contract. The recitals are as follows:

“Recitals
A. The Licensor is the registered proprietor of the Land.
B. Forsyth is the beneficial owner of the Land.
C. Pursuant to the Contract Forsyth has agreed to sell the Land to
Stephen William Clancy (Clancy) or his nominee.
D. Forsyth has directed the Licensor to grant a Licence to occupy the
Land to the Licensee, as Clancy’s nominee.
E. The Licensor has agreed to that request subject to the execution of this
Deed by the Licensee.”

The definition of “Contract” in cl.1.1 is as follows:

“Contract means the Agreement dated March 1995 for the sale of the Land by Forsyth to Clancy or any subsequent Agreements for the sale of the Land between the Licensor as registered proprietor acting on the direction of Forsyth and the Licensee as Clancy’s nominee.”

The definition of “Permitted Use” is:
“Permitted Use means the right to farm the Land and carry out all ancillary activities”.

62   Termination was dealt with by cl.2.4(a) in these terms:

“2.4 Termination
(a) The Licence shall terminate on the earliest of the following:
(i) the Date of Completion of the Contract;
(ii) the Date of rescission or termination of the Contract;
(iii) the Date on which the Licensor notifies the Licensee of the
termination of the Licence for a breach under this Deed of
the Contract; or
(iv) the liquidation of the Licensee.
(b) Unless paragraph 2.4(a)(i) applies, the Licensee shall give vacant possession of the Land to the Licensor on the Termination Date, however, the Licensee and its sublicensees shall be permitted to enter upon the Land for the purpose of cultivating, harvesting and removing any crops planted prior to the Termination Date by the Licensee or its sublicensees.”

63   Document 31 suggests that the Licence Agreement was prepared by Allen Allen & Hemsley Canberra who were acting for Bald Hill Quarries in a proposed sharefarming and financing agreement with Rosefarms, and that they in some way wanted comfort with respect to Rosefarms’ occupation of Yarrawah. Mr Clancy gave a similar explanation for the Licence. Mr Clancy explained the licence document of 1996 as arising out of a need to offer Bald Hill Quarry, which was growing crops under a share-farming or some similar arrangement with Mr Clancy on Waradgery and on Yarrawah, some greater certainty of occupation. Bald Hill Quarry was growing corn on Yarrawah. In Mr Clancy’s explanation the expiry of the Option on 30 June 1996 was not related to the Licence. 64   A word-processing imprint in the Licence suggests that it was printed on 2 August 1996. Correspondence in Exhibit 12 suggests that the Licence was probably executed early in August 1996. In Mr Clancy’s explanation of how he came to execute the Licence Agreement he says that he was approached by his own accountant Mr Lea who presented the problem of Bald Hill Quarries’ requirement to him. In my finding no pressure of any kind was exercised on Mr Clancy in relation to entering into the Licence. He had a full opportunity to consider its terms, and obtain advice about its implications before Rosefarms executed the document. Mr Clancy said that he did not intend Rosefarms to be bound by its terms. The evidence gives no real basis why the document should not be accepted as effective to bind Rosefarms according to its terms. Among other things it would bind Rosefarms to the proposition that the Contract dated March 1995 was in force as a contract. 65   The Licence, Document 30 was executed under its common seal by Rosefarms attested by Mr Clancy as director and Mr Andrew S. Lea as secretary. Although Mr Clancy sought to disavow this document and said to the effect that he did not know its contents and did not intend that Rosefarms be bound by it, there is no basis in substance on which it could be held not to be binding on Rosefarms as its Deed. I find that the Licence was binding on the parties to it, according to its terms. 66   Curiously in view of the explanation for its existence relating to giving comfort to Bald Hill Quarries Pty Ltd the licence in cl.2.1(a)(i) appears to be limited to permission to Rosefarms to occupy the land for the permitted use. Sub-licensing was contemplated as there is a reference in cl.2.4(b) to permitting sub-licensees to enter; but this relates only to entry by sub-licensees after the termination date and for the purpose of cultivating harvesting and removing any crops planted prior to the termination date. Mr Forsyth’s conduct seems to show that as before he accepted that there would be sublicensing. 67   The improvements. A large body of evidence established what improvements to Yarrawah have been carried out and illustrated their scale. There is a lack of precision in establishing the times at which works were carried out, what work in detail was done and the expense involved. In October 1992 a small area of Yarrawah had been contoured for irrigation, variously stated as 100 acres and 250 acres, but it was principally rough country appropriate for grazing with improvements suitable for that purpose. The major works carried out by Mr Clancy later were water storage facilities, construction of supply channels, drainage and recycling system, and construction or irrigation and layouts. 68   Development work began late in 1992 and early 1993 when Mr Clancy says he did irrigation work on 500 to 600 acres for cropping. In 1994 Mr Clancy built a water storage of about 48 hectares on the northern part of Yarrawah, an area known as “The Crown Lease” (although freehold). Early in 1994 the big river pump was constructed; its volume of 140 megalitres, many times the previous pumping capacity, enabled irrigation works for 2,500 acres of rice to be constructed. In and after 1996 he built a larger water storage of approximately 77 hectares in the southern part of Yarrawah. Construction of the storage works involved huge volumes of earthmoving works, which Mr Clancy was well equipped to do by experience and availability of equipment. These water storages greatly enhance the utility of other irrigation works, as they allow the accumulation of water when available by purchase or at times of high river flow, and storage until time of need when further supply may not be available. Complex arrangements exist for pumping water from the pump on the Murrumbidgee River and transporting it by a channel over several neighbouring properties. A lengthy main supply and infield channels have been constructed for reticulation from the Murrumbidgee River and thence to irrigated fields from the storages. Further drainage and recycling works have been constructed. Huge areas have been laid out for irrigation, partly by contoured ploughing and partly by laser levelling; Mr Clancy claimed that over 7000 acres of irrigated layout have been created. He estimated that the contour banks constructed were almost 200 kilometres. 69   Associated with the irrigation works are many items of hardware, including a large pump at the river and the constructions for head walls, valves, pipes, gates, road crossings and many other works. There have also been general improvements including fencing and cattle yards. 70   Mr Clancy and Rosefarms in fact continued to make improvements on a large scale after payments ceased in September 1997 and after Notice of Termination in December 1997. In my opinion there is no basis in which any remedy in respect of them could be granted. Development work continued in 1998. Mr Clancy’s evidence was that he did not undertake any new projects after December 1997 but that he completed projects which had been commenced by then. These included completing the construction of the second storage, which was completed in 1998. He also completed development work for irrigated land. 71   The improvements carried out must be regarded as permanent improvements. By carrying them out Mr Clancy greatly enhanced his earnings during the years he has been in occupation. Revenue was generated from occupation of Yarrawah in several ways. Income was gained from cropping, grazing, rental and sale of water. Crops included rice, soya beans, wheat, barley, oats and hay. Cropping was undertaken in a variety of arrangements, some involving sharefarmers and not always producing revenue in money. Proceeds of cropping from Yarrawah and from other properties are not well differentiated. Stock have been run on parts of Yarrawah not used for cropping, or during intervals. There have been large earnings contemporaneous with occupation, not always in the form of money as they sometimes take the form of work performed in exchange for use of land for cropping or agistment, or other advantages, and the advantages do not always accrue on Yarrawah. 72   Mr Clancy and Rosefarms were not in a position to prove in detail the value in money or otherwise of their expenditures on Yarrawah. It was Mr Clancy’s case that he simply did not have or was unable to produce detailed records or accounts which would establish what the costs had been. I found this very unsatisfactory, as maintaining records and accounts is an obligation incurred by operating in the corporate form. Expert evidence was tendered providing assessments of the volume of the work done and of its costs, but these appear to me to leave very wide margins of possible inaccuracy. Then too Mr Clancy was not in a position to give any clear evidence of the advantages which he has gained from occupation. The material put in evidence leaves me to deal only in broad terms. 73   Mr Clancy gave evidence only in the broadest detail of the costs and time which he had expended in working on Yarrawah. He said that he had worked 80 to 100 hours a week on Yarrawah; I regard this as an overstatement, particularly as he had enterprises on other properties. 74   In my finding the works carried out are improvements which have transformed the nature of Yarrawah and very greatly enhanced its value. Irrigation works require considerable maintenance. Lasered areas need to be re-lasered every four or five years, and work on clearing and maintaining channels is more or less continuous. However the works are of permanent value. The utility of the works will depend on continuing maintenance work of appropriate intensity, and also on commercial success in negotiating water supply by purchase or other arrangements with land-holders, on managing availability of water off-location and at times of high flow, and otherwise on continued and successful water management. I do not regard the evidence as enabling me to make a finding more precise than that the improvements have very greatly enhanced the value of Yarrawah, doubling and perhaps trebling its value, and that the cost of the works has probably exceeded the large advantages which have flowed to Mr Clancy and Rosefarms from occupation. If the facts had been that the Contract dated March 1995 was not legally binding but Mr Clancy wished to complete a transaction to the same effect including its provisions as to price, and Mr Forsyth or his successors had resisted, Mr Clancy and Rosefarms would have had a strong claim for remedies based on Proprietary Estoppel. However the facts are very different. 75   Mr Valuer Shuter expressed the view that Yarrawah’s value was $3.4m as of 1 April 1998. I accept his valuation, which in a general way is indicative of the level of value at present. Mr Valuer Smith in what he said was an estimate only, expressed the view that the value of Yarrawah as of August 1997, valued on the assumption that the improvements effected since October 1992 had not been carried out, was $720,000. I do not regard this evidence as reliable as it was expressed to be an estimate and not a valuation and no convincing supporting detail was given with it. In any event, on the findings I have made elsewhere, the value of the property at the time and on the assumption referred to is not relevant. Mr Engineer Healey gave evidence in which he estimated the cost of the earthworks as $2,523,407. This is a crude assessment based on generalised material and assumptions, and more accurate material ought to be available from Rosefarms if its affairs were conducted with appropriate care. It is a particular difficulty that Mr Healy proceeded on market rates for contracting work, which I do not regard as an appropriate measure for the purpose in hand, in which the cost to Rosefarms is a significant element in appraising the detriment which Rosefarm would incur if it did not obtain relief. While I do not accept Mr Healy’s estimate in detail, it is obvious that the earthworks were very large, continued over some years and involved costs on a massive scale. 76   Mr Halligan, a chartered accountant, made an assessment as revised that the net profit from trading on Rosefarms over the period of his occupation was $827,204. He also assessed the revenues over the period at $7,468,718.00. Mr Halligan’s evidence was based on his analysis of the records which Rosefarms did maintain. However proceeding from the records to conclusions relating to the facts now relevant required him to depend on a number of arbitrary ex post facto allocations, largely made by Mr Clancy for the purposes of the analysis. Mr Halligan did not offer a conclusion about the amount of the Development Costs. His allocations left a large majority of expenditure, very large sums unallocated. The cost of development activities cannot be established to any reasonable degree of reliability. I can only take a very general view of what they were and in that general view it seems that they probably amounted to several million dollars and are unlikely to be fully represented in the value of the property. It seems likely that the development activities were largely financed from Mr Clancy’s and Rosefarms contemporaneous revenue-producing activities on Yarrawah and on other properties, and from the employment of otherwise unused capacity of his earthmoving business. 77   Proprietary Estoppel. Mr Clancy in his evidence made a statement which in its terms appears to explain the nature of his attachment to the project of improving and acquiring Yarrawah (t123-124):

“Q. You said you felt under pressure to sign that document which you received in March 1995. If you did so, why did you wait until late May or early June or, on the basis of your last answer, possibly until early July to sign it and return it?
A. Because I was unsure about signing it.
Q. What was it about it you were unsure of?
A. Your, Honour could I explain something that might help understand the answers?
HIS HONOUR: I think the question allows that, yes.
WITNESS: It goes back to the definition, that’s why I have a problem in answering, that goes back to the actual definition of even what ‘Yarrawah’ is. When you have the map you will see the physical boundaries of ‘Yarrawah’. To me, that is only part of what ‘Yarrawah’ is, that is, the physical property.
Part of what ‘Yarrawah’ is the bond between Neil and myself, the friendship between Neil and myself, the drive between us to achieve is mutual benefit, which was, on the one hand, Neil getting a very advantageous price for the property, us getting the long term benefit of the property; together we got the enjoyment of creating the property.
‘Yarrawah’ is physically ‘Yarrawah’. ‘Yarrawah’ was an entity. Also discussed anything we did; in my eyes to generate income, to create what Neil and I would enjoy, to fulfil the partnership that Neil and I had to build or create what was a work of art. To me it’s ongoing, ‘Yarrawah’ still lives and grows through that. Neil still lives, our friendship is still there, Neil never died. To me Neil lives in what I created and it’s very hard to take. When they talk of ‘Yarrawah’ they are talking of physically myself.
I am talking an entirely different subject. The whole thing of what we built and created together and I find it very hard to rationalise between the physical part of it and the entity of what we built and we were -
HIS HONOUR: I am not sure you have done yourself justice in answering the question.
WITNESS: The pressure that was there was the pressure that my side of the bargain, arrangement, partnership, whatever it was, to create all this, to fulfil my side of the partnership, it’s hard to reduce that to words and say the pressure was --
HIS HONOUR: Q. I see you have explained there was a sense of commitment to a project. Do you feel you have done yourself justice in answering the question, or do you feel there is anything else that deals with the question
A. What was the question?
(Question marked * read)
A. Neil, for his side of the bargain, was to advise, treat us fairly, help, assist in any way he could, whether that fitted into - whether this agreement fitted into that category. If Neil said I could afford to do something, I would try and do that thing. If he said I could afford to make these payments, I wold attempt to make these payments.”

78   This is not as a matter of language a clear explanation, but it shows that Mr Clancy felt a deep emotional involvement in Yarrawah and in his dealings and personal relationship with Mr Forsyth. At several other passages Mr Clancy also spoke about the nature of his personal relationship with Mr Forsyth in a manner which revealed considerable feeling. 79   At all times there was before Mr Clancy a document which described in clear detail the terms upon which Mr Forsyth was prepared to sell the property; several different documents from time to time, but the proposal before Mr Clancy was always clearly stated in writing. At no time was it reasonable for Mr Clancy to expect that Mr Forsyth would transfer Yarrawah to Rosefarms at any less price than the price stipulated. Different prices were stipulated from time to time. When there were movements, they were upward. The amounts and times of payments were renegotiated; but in no way was it ever held out to Mr Clancy that Rosefarms could obtain the property for a lower price than Mr Forsyth currently stipulated in writing, or that he could get benefit from his improvements except by buying the property (except, of course, for what he was earning by his operations on Yarrawah). 80   The existence of a good and personal relationship between the two men, and the many expressions of encouragement, approval and hopes of success which Mr Forsyth made do nothing to obliterate, on any reasonable view available to Mr Clancy, the understanding that the availability of the property was availability at the price stipulated. Indeed the fact that a price had been established in Mr Forsyth’s proposals, and the clarity of statement and the absence of any challenge to it, must have had a great deal to do with the element of goodwill in the relationship. For each side there were advantages, and the advantages were ones which each party wished to obtain. Mr Clancy’s position now appears to be to the effect that his relationship with Mr Forsyth was such that he felt that Mr Forsyth would not ultimately require him to pay more than a suitable and fair price. In my finding there was no reasonable basis for Mr Clancy to have any expectation about price other than expectations based on what Mr Forsyth expressed in writing. 81   From June 1995 until August 1997 all dealings were conducted on the basis that the price was to be $2,327,111.00. Apart from an entirely subjective interpretation put forward by Mr Clancy there is no objective indication that Mr Forsyth did anything to create an expectation of Mr Clancy that Rosefarms would get the property at any other price or at a price determined on any other basis. Other aspects of the transaction or proposed transaction were discussed or further considered or the subject of new provisions in drafts; and these aspects included the time and manner in which the purchase price was to be paid and whether there was to be mortgage finance from the vendor; but the price itself was never the subject of questioning or further discussion until the conversation of 10 August 1997, involving Mrs Forsyth and Mr De Wijn, followed by Document 58 of 12 August 1995. The challenge which was then made to the price was entirely new. The terms of the letter show that it was not the continuation of some long-running debate about the price. The position put in the letter was radically different to any position with which Mr Forsyth had ever been associated; in effect it was a proposal that he would accept far less than the $1,625,000 with which arrangements between the parties had opened almost five years earlier. 82   The expectations which Mr Clancy could reasonably hold and which could in any way be attributed to Mr Forsyth about the terms on which Rosefarms would acquire Yarrawah could not at any stage have included an expectation that the price would be a price as determined by objective valuation, as of any date, on the basis that the improvements had not been made. At no time did Mr Forsyth deal with Mr Clancy on any basis of which that was a possible interpretation. The letter of 12 August 1997 departed in a most radical way from any expectation which it could have been reasonable for Mr Clancy to hold until then. Until that date the expectations on which it was reasonable to act in carrying out improvements were expectations based on Mr Forsyth’s current position as expressed in writing. 83   From October 1992 until the parties ceased to act on the basis of the Option at some time from December 1994 to June 1995, the only expectation on which it was reasonable for Mr Clancy to act was that if he exercised the Option within the time available, and incurred and met the obligations which came with exercising the option, he would have the property including the benefit of the improvements which he was carrying out; he had no reasonable basis for an expectation that he would get the benefit of the improvements in any other way. From 13 December 1994 onwards and again from June 1995 onwards, the only expectation on which it would be reasonable for Mr Clancy to act in incurring expenditure for improvements, and the only expectation which it could be said was created or contributed to by Mr Forsyth, was an expectation that Rosefarms would own the property and have the benefit of the improvements if the terms in the documents of those dates were carried out, Rosefarms met the obligations expressed in them and did so within the times referred to; all the obligations, including as to the price. This is true whether or not the Contract dated March 1995 was intended to be or was a legally binding contract; I am of the view that it was, but if it were not, it could not reasonably give rise to any expectation which differed from its terms. 84   Mr Clancy’s expressions in evidence to the effect that he believed that Mr Forsyth would treat Rosefarms and Mr Clancy fairly were borne out in a way by the fact there were several re-negotiations; however this is not a basis for any expectation that there would be a departure from Mr Forsyth’s stated price, which was a basic matter throughout. 85   All of Mr Forsyth’s acts of acquiescence and encouragement occurred in the context of express arrangements, reliance on which is entirely sufficient to explain the conduct of Mr Clancy and Rosefarms in occupying and improving the land. For the period during which the parties acted on the Option, the rights under it were a sufficient source of remedies and protection against incurring loss by carrying out the improvements. The value of the improvements could be realised by purchasing the land in exercise of the Option and would be lost if that were not done; so much was then obvious. At later stages any expectation which it would be reasonable to rely on and could be the source of equitable remedies must have related to the Memorandum of 13 December 1994 and then from June 1995 onwards to the Contract dated March 1995. From June 1995 onwards the Contract dated March 1995 and expectations of advantages to be obtained under it were the only reasonable bases upon which Mr Clancy and Rosefarms could rely for protection in respect of improvements. The only reasonable expectations of advantage to flow from improvements which Mr Clancy could hold related to completing the Contract and taking title under it, and it must then have been obvious that if those things were not done no long-term value would be gained from the improvements. I see no room for the operation of the law relating to Proprietary Estoppel where the rights of parties are established contractually, no matter what acquiescence or encouragement there was. If the Contract dated March 1995 were not binding its operation for the purpose of the law of Proprietary Estoppel could only be to create expectations according to its terms, including to the term relating to price, a subject of central importance and explicit statement on which Mr Forsyth did not after June 1995 show any flexibility, and was not asked to. 86   There could not in my opinion be any continuing expectation, on a reasonable basis, that Mr Clancy and Rosefarms would obtain title to Yarrawah and the benefit of the improvements after the series of events of August and September 1997 in which Mr Clancy stated that he was quite unwilling to pay $2,327,111 but that he was willing to pay $1,200,000, his solicitors denied that there was a binding arrangement, Mr Forsyth died and the personal friendship between Mr Forsyth and Mr Clancy ended and Rosefarms ceased to make payments after September. At no stage since then and throughout the hearing have Mr Clancy and Rosefarms adopted the position that they were willing to pay $2,327,111; the case put forward was to an entirely different effect, that the amount which should be paid was a value to be determined by the Court supported by evidence which suggested that that value was even far less than $1,200,000. 87   In these circumstances it is in my judgment in no way unconscionable for Salienta and Mr Forsyth’s successors to rely on Salienta’s legal title to the land, its legal right of possession and on the termination of the Contract dated March 1995. I see no room for Proprietary Estoppel when all relevant conduct happened in the context of legally binding contracts under which Mr Clancy and his nominee had rights to take title if they complied with the obligations. If these were not binding they have much the same effect to define what expectations it would be reasonable to hold and act on about the interest which would be conferred and the circumstances in which it would be conferred. 88   As of August 1997 Mr Forsyth, who had been known to be seriously ill for some years, was known to be gravely ill; this was referred to in the correspondence of 1997 and was well known to Mr Clancy. In the context of the parties’ earlier dealings and Mr Forsyth’s circumstances, the letter of 12 August 1997 appears retrospectively to be an astonishing departure from any expectation which might reasonably have been held by Mr Forsyth about the future of his transactions with Mr Clancy. At about this time Mr Clancy, being as he says unhappy with the proposed arrangements, came to “…the opinion that we could not proceed under those lines and if I could have one final attempt at getting back to square one.” In my finding, in August 1997 and before Mr Forsyth’s death Mr Clancy and Rosefarms became entirely unwilling to purchase the property on the terms which Mr Forsyth had kept before them in various forms since June 1995, and that, whatever else its terms may show, the letter of 12 August 1997 is an expression of this entire unwillingness. Until then discussions had proceeded for years on the basis that the price was agreed. 89   Mr Clancy also said of the schedule of payments in the Memorandum of 13 December 1994 “I assumed the payments would be credited against any ultimate price.” There is no reasonable basis for that assumption; there was no reason why Mr Clancy should not pay contemporaneously for the advantages of occupation as distinct from the price. 90   For the first time too the letter of 12 August 1997 expressed an alleged understanding by Mr Clancy that Rosefarms was to be credited with the value of the improvements on the property. This too was an entirely radical change in the proposed arrangements. It is altogether inconsistent with each of the Memorandum and the Contract, which are the parties’ expressions and purport to be expressions of agreement, and with the various forms of draft contract. 91   Mr Clancy expressed in evidence in various ways a complaint to the effect that he was not given any credit or allowance in the price for the improvements which Rosefarms effected on Yarrawah. This was a characteristic of each proposal which is recorded in any way, from October 1992 until the end of Mr Forsyth’s life. At each stage Mr Clancy and Rosefarms had the benefit of possession of Yarrawah, the opportunity to carry out improvements on Yarrawah the opportunity to work the property and get the concurrent benefits of the improvements, and generally to get the benefits of occupation before having to pay the purchase price. In the first form of the arrangement, in October 1992 there was actually an obligation to make improvements at least at a stated rate. At later stages when the Option was no longer treated by the parties as governing their affairs, improvements continued to be made, on a large scale. The flow of advantages was not solely favourable to Mr Forsyth; the price was deferred and Mr Clancy and Rosefarms had the opportunity to work the property with the benefit of the improvements, and to allow others to work the property in return for advantages of various kinds, without any payment in the nature of a deposit. It was obvious from the outset that unless Mr Clancy and Rosefarms in some way completed a purchase the long-term advantage of the improvements would be lost and the only advantages gained would be gained while actually in occupation. This was obvious whether or not the various documents were intended to be binding; the risk that there would be no long-term benefits from improvements if there were no transfer of title was obvious at all times. 92   The reasoning underlying the price of $2,327,111.00 in the Contract dated March 1995 was explained by Mr Forsyth in a letter of 7 August 1995, Document 20, and in the terms of that explanation there was no place for a credit or allowance in the price for the improvements. Mr Clancy showed this letter to his solicitors. However until August 1997 there was no challenge to the reasoning or debate about the principles or the amount in any written form, or as far as evidence shows, in any other way. It does not appear to me that the reasoning expressed by Mr Forsyth in that letter relies on Rosefarms paying for the improvements which it effected. However even if that were a true view of the reasoning underlying the price, from June 1995 onwards the price had been established in the parties’ negotiations, and until August 1997 it was never challenged or raised for re-negotiation. Quite otherwise, it was a constant in the communications between the parties, and was the basis on which Mr Clancy sought to obtain mortgage finance from a third party. Correspondence between solicitors about the drafts does not include debate about this figure. Nor does it appear that it was debated or discussed or challenged at the conference attended by Mr Clancy and his accountant, and by solicitors for both parties, on 24 November 1995. Mr Clancy’s dealings over many months with solicitors representing a proposed intended first mortgagee proceeded on the basis that $2,337,111 was to be the purchase price. 93   The central reasoning supporting the price was that the contract price was structured in a way which effectively deferred Mr Forsyth’s benefit and gave Rosefarms the benefit of a low occupancy fee until Rosefarms purchased Yarrawah, with a countervailing increase over what would have been the value of Yarrawah in a present sale for ready money. It would be difficult to justify any of the prices referred to in the documents in terms of the value of Yarrawah in its limited state of improvement in October 1992; for $2,327,111 this justification would be quite impossible. The justification of the price is not that it is objectively a fair value on any set of assumptions, but that it is the price that Mr Forsyth stipulated and in the knowledge of which Mr Clancy acted and to all outward appearance and in fact agreed to. The price is one element in a congeries of advantages and disadvantages which the contract brought with it, and the clear fact that it is higher than market value at the outset has to be taken with the advantages of there being no deposit, deferral of payment, occupation for relatively small current payments, the income that could be earnt, the Headingly loan, the prospects of future ownership and Mr Clancy’s perception of the suitability of the property for what he planned to do. It is for the parties and not for the Court to say whether $2,327,111 as an element in all this is the appropriate price: they have said in effect that it was. Mr Clancy’s viewpoint on the fairness of the price now after he has had the advantages and occupation and the elapse of time is not the same as the viewpoint he had in 1995. 94   Unconscionable Contract. It was contended that the Contract of March 1995 if in effect should be set aside as an unconscionable contract. The case in support of this was to the effect that Mr Clancy had been overborne by Mr Forsyth. Mr Forsyth no doubt had considerable advantages in subjects related to his talents as Queen’s Counsel. It is a completely wrong view of the relationship between the two men and of Mr Clancy’s abilities to think that Mr Clancy was or could be in any way overborne in entering into the transactions or continuing from 1992 to 1997 to carry on his activities of improvements. In his own field of rural business Mr Clancy is a talented and successful person. He has no ability for paper work but in his evidence before me he showed that he has a good and clear command of spoken language, and a ready grasp of commercial considerations. He had professional advice available to him independently of Mr Forsyth, and he consulted his professional advisers as he wished; his solicitors and his accountant, who were entirely independent of Mr Forsyth. When the events opened Mr Clancy had an accountant in Hay who attended to his accounts, and was mainly oriented to keeping records. Mr Clancy consulted Mr Lea a chartered accountant and had his advice from March 1995 onwards. From April 1994 he consulted Messrs Greaves Wannan & Williams solicitors. He had ready access to his solicitors and was in a position to refer documents to them for consideration and advice and did so when he thought he should. It is clear that Mr Clancy did not place himself in Mr Forsyth’s hands. 95   Mr Clancy contended that he felt pressured into signing the document of 13 December 1994, which he referred to as guidelines and as an agreement in principle. The pressure which he felt was “the pressure not to fail in Neil’s eyes” and he felt that by not signing the agreement that would have constituted a failure - “… if he thought I could accomplish something, which he obviously must have done to come up with these things then, yes, it would have been a failure not to sign it and a failure not to be able to do it.” 96   Mr Clancy said in evidence that he had been prepared to commit himself to a binding arrangement to purchase the property being “a binding arrangement that was suitable and fair.” He accepted that he did sign Document 16 which expressly conferred a power of rescission if he did not pay the Headingly loan by 30 June 1997. He said “I felt under a fair bit of pressure to sign the document”. In my view however he was not in fact under any influence of Mr Forsyth which could reasonably be thought of as pressure. 97   Mr Forsyth’s legal skills gave him considerable advantages in some respects over Mr Clancy. His legal skills were not well deployed in his dealings with Mr Clancy. Mr Clancy for his part had abilities in rural life and the world of practicalities which gave him some advantages over Mr Forsyth. Mr Clancy is a person of considerable talent and ability and adept at business. For some years he has conducted an earthmoving business and all affairs related to operations on Yarrawah, and also related operations on several other properties, complex affairs involving dealings amounting to millions of dollars. This has involved him in detailed and elaborate transactions with neighbouring owners over occupation, sharefarming and water rights. In some ways he had advantages over Mr Forsyth in understanding rural life, capacity to carry out engineering works, knowledge of the personalities and talents involved and presence at or near the site, whereas the main scene of Mr Forsyth’s activities was in Melbourne and from 1994 onwards he was suffering from terminal illness. I do not accept that the terms of the agreement were unconscionable or unfair in any way. The price agreed upon was high but it was reached in the course of several negotiations and re-negotiations in which Mr Clancy was in a position to weigh the relevant considerations and the advantages and decide whether they should be set off against the price. The advantages were considerable as they brought him the opportunity over some years and for small payments to occupy the property, improve it according to his own requirements and work it, earning revenue in millions while making payments which were to a marked degree concessional, and deferring any large payments on account of the price. I do not accept that the contract was unconscionable or that it ought to be set aside. Suggestions that in some way Mr Forsyth overbore Mr Clancy into entering into the Contract dated March 1995 are in my view groundless. 98   Sharefarming. Paragraph 13 of Rosefarms’ Amended Defence relies on the Agricultural Tenancies Act 1990 and is in these terms:

“13. In further answer to the whole of the Statement of Claim so far as it concerns Rosefarms, Rosefarms says that if the Notice dated 23 December 1997 would otherwise have been valid and legally effective:
(a) as at that date, ‘Yarrawah’ was being used for the purpose of growing three crops (in rotation) on a share-farming basis;
(b) as at that date, the second of those crops was to be harvested in 1998 and the third was to be harvested in 1999;
(c) the Notice did not provide for notice of at least a period ending at least one month after the end of the current annual cropping program;
(d) by sub-section 19(4) and 27(1) of the Agricultural Tenancies Act 1990, the Notice was invalid and of no legal effect.”

99 Section 19 of the Agricultural Tenancies 1990 is in these terms:

19.(1) A tenancy for a fixed term with no provision for holding over terminates at the end of the fixed term without the necessity for any notice.
(2) A periodic tenancy (other than a tenancy from year to year) cannot be terminated unless written notice of termination is served by a party on the other party so as to give notice at least equivalent to the length of the term.
(3) A tenancy from year to year cannot be terminated unless written notice of termination is served by a party on the other party so as to give not less than 6 months’ notice.
(4) In addition to the requirements of subsections (2) and (3), a tenancy cannot be terminated unless written notice of termination is served by a party on the other party so as to give notice of at least:
(a) in the case of a sharefarming arrangement for crop growing -
a period of 1 month, ending at least 1 month after the end of
the current annual cropping program; and
(b) in any other case - a period of 1 month.

(5) This section does not apply to termination for a breach of the tenancy or where the parties have otherwise agreed on the notice to be given.”

100   Provision for termination in cl.2.4 of the Licence did not provide for termination by notice of any period. 101   “Tenancy” is defined in s.4 in these terms:

“’tenancy’ means a lease or licence, an agreement for a lease or licence, a tenancy at will or a sharefarming arrangement or any other arrangement by which a person who is not the owner of the farm has a right to occupy or use it;”

102 Section 27 avoids provisions for contracting out of the operation of the Act. 103 Defendants’ counsel contended that the defendants’ licence to occupy arose out of the series of events beginning in October 1992 in which the defendants in fact occupied Yarrawah and carried on development and farming activities and paid outgoings, supported by the invitations, representations and encouragement of the owner. It was further contended that this licence was a sharefarming arrangement because, it was said, a sharefarming arrangement is one pursuant to which sharefarming takes place. The sharefarming to which counsel referred was not any sharefarming as between Salienta and Mr Forsyth and the defendants. Counsel relied on the fact that to the knowledge of Mr Forsyth the defendants sharefarmed with other persons. These arrangements are described by Mr Clancy in his affidavit of 8 October 1998 para.62, to the effect that Rosefarms then had a sharefarming arrangement with the Violi Brothers relating to part of Yarrawah; the Violi Brothers hired machinery to Rosefarms which was used primarily for undertaking development on Yarrawah and in return they were permitted to grow crops on the land at their own expense and for their own benefit, under a cycle of planting and cropping three different products which was to run until the last harvest about May 1999. In Mr Clancy’s affidavit of 31 March 1999 para.5(b) he narrated that he had told Mr Forsyth in 1993 about an arrangement with Sally and Kyle Smith to jointly grow rice for the 1993, 1994 season under the name Riverina Rice Company. The Smiths operated as Third Sargasso Pty Ltd. A letter from Mr Forsyth to Mr Clancy of 15 July 1996, Document 28 also shows that Mr Forsyth was aware and agreed that Rosefarms would allow others to farm on Yarrawah. 104 In my opinion the contemplation, acceptance and permission of Salienta and Mr Forsyth that Rosefarms would allow others to farm on Yarrawah and would do so under various arrangements for sharing expenses and proceeds does not characterise the Licence granted by Salienta to Rosefarms as a sharefarming arrangement within the meaning of para.19(4)(a). Salienta was not involved in any arrangement for sharing in any sense, either expense or proceeds, and no money amounts payable to Salienta were related to the outcome of farming. In the ordinary and natural meaning of words referring to sharefarming, a sharefarming arrangement is an arrangement between those who participate in the sharefarming; an arrangement under which land is made available to a person who then participates in sharefarming with someone else is not a sharefarming arrangement. 105 Although para.13 of the Defence does not in terms allege that there was a sharefarming arrangement the allegations which are made (in subpara (a) “On a sharefarming basis” and subpara.(c) “At least one month after the end of the current annual cropping program”) show that it is alleged that there was a sharefarming arrangement and show that the provision relied on is para.19(4)(a). Evidence shows clearly that an annual cropping program was current on 23 December 1997 when the first notice of termination was given. 106 The operation of para.19(4)(a) to extend a tenancy until after the end of a current annual cropping program applies only in relation to a sharefarming arrangement, which is one of several kinds of arrangements and agreements which fall within the definition of “tenancy”. “Sharefarming” and “Sharefarming arrangement” are not defined expressions and it appears from the terms of the definition of ‘tenancy’, and also from the general meaning of those words that an arrangement is not a sharefarming arrangement simply because a person who is not the owner of a farm has a right to occupy or use it. 107 The Agricultural Tenancies Act 1990 does not alter the nature of the rights conferred by arrangements between the parties; s.19 alters the time and manner of termination of the tenancy, but does not alter the nature of the rights which exist pending termination. A lease remains a lease and a contractual licence remains a contractual licence, and a contractual licence does not confer a right of exclusive possession, a defence to a claim for possession or any right to possession except by reference to any claim the licensee may make for an injunction to restrain breach of the contractual licence. The defendants contend that the Licence did not have effect, so it is inconsistent with their position that they should ever be entitled to enforce it specifically by injunction. If some arrangement between the parties did have effect to confer a licence to which subs.19(4) applied the extension to one month after the end of the annual cropping program current in December 1997 has long since expired. It probably expired before the Summons was issued on 10 June 1998. It clearly expired before the Amended Statement of Claim of 26 October 1998 in which Salienta first claimed possession of Yarrawah, and certainly expired before their claim was made again in the Further Amended Statement of Claim dated 7 June 1999. By making those claims Salienta clearly terminated any then existing and unterminated licence. In my opinion the question whether subs.19(4) ever had any operation is now academic. 108 Salienta’s counsel contended that observations in the judgment of the Full Court of the Supreme Court in Dudgeon v Chie 55 SR (NSW) 450 set out in the report of the decision of the High Court (1955) 92 CLR 342 at 347 and approved at 352, which dealt with entitlements as regulated by the Agricultural Holdings Act 1941, are applicable to tenancies as affected by s.19 of the Agricultural Tenancies Act 1990, particularly the observation “The Agricultural Holdings Act 1941 was not designed to affect the status of a share-farmer, as such, or to confer upon him an estate in possession as against the owner, unless such a right could be spelled out of the agreement itself.” In my opinion s.19 where applicable to a tenancy as defined has the same effect as the legislation considered in Dudgeon v. Chie: the term of the deemed tenancy is affected by limiting the manner of its termination, but the nature of the rights conferred by the parties’ agreement is not affected. If the deemed tenancy does not according to its terms confer an exclusive right of possession or any right which will protect the tenant from ejectment, s.19 has no impact on the deemed tenant’s protection from ejectment. The basis of this view is that neither in s.19 nor elsewhere in the Agricultural Tenancies Act 1990 is there any provision protecting a deemed tenant’s occupation in any way other than by providing for periods of notice as stated by s.19. 109 In my opinion the Agricultural Tenancies Act 1990 does not afford any protection to the defendants’ occupation. The provisions of s.19 of the Agricultural Tenancies Act 1990 relating to notice of termination do not apply having regard to provisions of subs.(5). If that were not so the notice given was for longer than one month and complied with para 19(4)(b). The pleaded defence relates only to subpara 19(4)(a) and has not been made out. 110 Termination of the Licence. Notice of Termination of Contract dated 23 December 1997 directed by Salienta and Mr Forsyth’s executors to Mr Clancy and Rosefarms stated that it terminated the Contract dated March 1995, and the grounds recited were defaults in payments of principal and interest under the Contract and the denial of the letter of 25 August 1997 Document 60 that the Contract was binding on Mr Clancy. In my finding these grounds were well based, there were further grounds and circumstances from which repudiation of the Contract by Mr Clancy was clear, it was open to Salienta and the executors to accept that repudiation and terminate the Contract, and that notice was effective. The Licence was terminated on 23 December 1997 having regard to sub-paragraphs 2.4(a)(ii) and (iii) of the Licence. I find that the Contract dated March 1995 was repudiated by Mr Clancy and Rosefarms in August and September 1997 and that the Notice of Termination operated to accept the repudiation and terminate the Contract. 111   The Notice of Termination conferred permission on Mr Clancy, Rosefarms and any sub-licensees to enter upon the land until 30 June 1998 for the purpose of the rights specified in cl.2.4(b). Subject to this permission the Notice of Termination was effective to bring the licence to an end. 112   In my opinion Salienta is entitled to recover damages for mesne profits against Mr Clancy and Rosefarms in respect of the period commencing 26 October 1998, when the claim for possession was first made in the Statement of Claim. 113   The claim against Mr Clancy personally for damages under the Contract dated March 1995 was not pressed (t229). The improvements effected by the defendants even after 23 December 1997 will make proof of actual loss and the assessment of quantum quite difficult. 114   ORDERS

Upon the Further Amended Statement of Claim:-

1. Give judgment for the plaintiff for possession of the property known as Yarrawah being approximately 12,000 acres of land in Certificates of Title Volume 14803 Folio 20, Identifiers 9/756766 and 13/756766.

2. Reserve further consideration of leave to issue a Writ of Possession.

3. Order that Caveat 5646342 P be withdrawn within seven days.

4. Give judgment for the plaintiff against the defendants for damages for mesne profits for the period from 26 October 1998 until recovery of possession.

5. Order that it be referred to a Master to inquire, ascertain and certify the amount of the plaintiff’s damages and further order that judgment be entered as of today for the amount so certified.

6. Order that the defendants pay the plaintiff’s costs of the proceedings.

Upon the Amended Cross-claim:-

7. Give judgment for the Cross-defendants with costs.
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Last Modified: 09/15/1999