Waaka v Francois

[2017] NSWSC 744

Supreme Court

New South Wales

Medium Neutral Citation:	Waaka v Francois [2017] NSWSC 744
Hearing dates:	22 – 24 May 2017
Date of orders:	09 June 2017
Decision date:	09 June 2017
Jurisdiction:	Equity
Before:	Darke J
Decision:	Plaintiffs’ equitable proprietary estoppel case not established
Catchwords:	ESTOPPEL – equitable proprietary estoppel – arrangement whereby defendant agreed to sell property to plaintiffs if they were able to obtain finance – where plaintiffs gave up a secure public housing tenancy to lease the property – where plaintiffs carried out improvements to property – defendant refused to sell property after plaintiffs had not obtained finance over period of more than six months – whether defendant created assumption or expectation that plaintiffs had to obtain finance by a certain time – whether defendant adhered to assumption or expectation – no estoppel established
Cases Cited:	Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2010] NSWCA 483 DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728; [2011] NSWCA 348 Doueihi v Construction Technologies Australia Pty Ltd (2016) 92 NSWLR 247; [2016] NSWCA 105 Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 Ramsden v Dyson (1866) LR 1 HL 129 S & E Promotions Pty Ltd v Tobin Brothers Pty Ltd (1994) 122 ALR 637 Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466 Sullivan v Sullivan (2006) 13 BPR 24,755; [2006] NSWCA 312 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
Category:	Principal judgment
Parties:	Susanne Huhana Waaka (First Plaintiff) John Rhubin Waaka (Second Plaintiff) Marie Anne Valerie Francois (Defendant)
Representation:	Counsel: Mr P Batley (Plaintiffs) Mr A L Connolly (Defendant)   Solicitors: Legal Aid NSW (Plaintiffs) Mulally Mylott a division of Goldbergs Lawyers Pty Limited (Defendant)
File Number(s):	2015/140471
Publication restriction:	None

Judgment

Introduction

1. The plaintiffs, Mr and Mrs Waaka, reside with some of their children at 4 Olbury Place, Airds (“the property”). The property is owned by the defendant, Ms Francois. She purchased it from her father in 2008.

2. Mr and Mrs Waaka allege that Ms Francois is bound by an equitable proprietary estoppel which, in the circumstances, requires her to enter into a contract to sell the property to them for $320,000.

3. In brief, Mr and Mrs Waaka allege in their Amended Statement of Claim that:

1. in March 2014 Ms Francois promised, or encouraged the assumption or expectation, that she would sell the property to them if certain things occurred, including that Mr and Mrs Waaka secure finance for the purchase within a reasonable time (see Amended Statement of Claim paragraph 6);

2. in reliance upon what Ms Francois said they gave up a secure tenancy with Housing NSW, entered into occupation of the property at a higher rent under a residential tenancy agreement with Mr Francois, and carried out certain repairs and renovations to the property (see Amended Statement of Claim paragraphs 7 to 10);

3. on 17 October 2014, when they had secured finance for the purchase, Ms Francois said that she would not proceed with a sale of the property to them (see Amended Statement of Claim paragraphs 11 and 12); and

4. in the circumstances it is unconscionable for Ms Francois to resile from her promise or the assumption or expectation she encouraged (see Amended Statement of Claim paragraph 13).

4. Ms Francois takes issue with what she is alleged to have promised Mr and Mrs Waaka or encouraged them to assume or expect. She denies that she has acted unconscionably towards Mr and Mrs Waaka. It is clear, however, that in the course of discussions in late March 2014 an arrangement was made which involved Mr and Mrs Waaka moving into the property with a view to subsequently purchasing it from Ms Francois. The terms of that arrangement are of central significance to the case.

Narrative of salient events

5. Mr and Mrs Waaka and Ms Francois met in 2013 at the Calvary Life Outreach Church in Minto. They became friends, and had occasional social contact outside of church activities. In about February 2014 Ms Francois had suggested that Mr and Mrs Waaka’s daughter, Miriama, could have her birthday party at the 4 Olbury Place property in early April.

6. In early 2014 Mr and Mrs Waaka were living in a Housing NSW property in Ambarvale. They had commenced living in that property in May 2005. They had entered into a residential tenancy agreement with the Department of Housing on 11 April 2005 for a term from 2 May 2005 to 27 April 2008. There was no right to renew the tenancy at the end of the term. However, the Department of Housing agreed that it would then review the matter in accordance with its Renewable Tenancy Policy. The evidence is not clear as to what occurred at the end of the term, other than that Mr and Mrs Waaka continued as tenants at the Ambarvale property. It appears that at some stage a “Renewable Tenancy Agreement” was entered into.

7. Such an agreement was in force in 2013 when Mr and Mrs Waaka fell into dispute with Housing NSW concerning a pre-fabricated shed they had installed in the rear yard. The shed was used to provide additional space for some of their children. On 3 September 2013 Housing NSW issued a Notice of Termination of the tenancy. It then commenced proceedings in the Consumer, Trader and Tenancy Tribunal seeking termination of the tenancy. On 24 October 2013 an order was made by consent in the Tribunal to the effect that Mr and Mrs Waaka would remove the shed by 17 November 2013. That did not occur. On 12 December 2013 an agreement was reached for Mr and Mrs Waaka to remove the shed by 14 February 2014. That did not occur either. In February 2014 Housing NSW renewed its application (now in the Civil and Administrative Tribunal) for termination of the tenancy. That application was listed for 3 April 2014.

8. In early 2014 Ms Francois lived at 4 Olbury Place with her daughter. Ms Francois’ sister had lived there with them until November 2013. Ms Francois also owned the property across the road at 1 Olbury Place. She acquired that property in 1998. The 1 Olbury Place property was rented out, but on 12 March 2014 the tenants gave notice that they would be leaving on 22 March 2014. Ms Francois gave evidence that she intended to move into 1 Olbury Place and then rent out 4 Olbury Place.

9. It seems that in about mid-March 2014 Mr and Mrs Waaka found out that Ms Francois may be looking to move in to 1 Olbury Place and rent out the 4 Olbury Place property. On 17 March 2014 Mrs Waaka sent a text message to Ms Francois to the effect that Mr Waaka wanted to know if her house was definitely for rent. Ms Francois responded with a text message that as far as she knew “the neighbours are moving”. Presumably, that is a reference to the tenants of 1 Olbury Place.

10. Ms Francois deposed that at about that time she had a conversation with Mr Waaka (in the presence of Mrs Waaka) in the yard of 4 Olbury Place in which he said words to the following effect:

We want to rent the house. We need to move the container and John’s [sic] boss will move the container for us. We want to put it on the driveway. But we want to do renovations to the house. We want to paint the inside of the house and move the three sheds from the front to the back. You don’t have to do anything we will organise everything and do it all ourselves. You only have to pay us back if you start working full-time or if you sell the house.

11. Ms Francois deposed that she responded by saying that she would think about it.

12. In cross-examination, Mr Waaka agreed that he had said “we want to rent the house”. He also agreed that he spoke about moving the container (the shed) from the Ambarvale property and putting it on the driveway. Mr Waaka accepted that he may have said that “we want to do renovations to the house”. He said he did not remember saying anything about painting the inside of the house and moving three sheds from the front to the back. Mr Waaka said the discussion only concerned the “site shed” which was on the Ambarvale property. He recalled saying “you don’t have to do anything we will organise everything and do it all ourselves”, but did not recall saying “you only have to pay us back if you start working full-time or if you sell the house”.

13. Mrs Waaka denied in cross-examination that her husband had said that they wanted to rent 4 Olbury Place. She did not recall any conversation to the effect of that deposed to by Ms Francois. She further said that “there was no interest in renting her house”.

14. On 19 March 2014 Ms Francois sent a text message to Mrs Waaka in the following terms:

Hi Sue, I been thinking about the house for the last 2 days & I don’t think I can afford the changes that you want to make. I can’t afford anymore debt. I am considering whether it is best to just sell the house. I am sorry but my financial situation atm is not good & I can’t make decisions that will cost me more money. I hope you understand.

15. Ms Waaka responded with a text message stating:

All good that’s confirmation for us we were going to tell we no longer needed to rent your house we have had a change of circumstances when we got home from talking to you. You do what you need to do for You and your daughter.

16. Having regard to those text messages and Mr Waaka’s concessions in cross-examination, I think it is likely that a conversation about renting 4 Olbury Place took place on about 17 March 2014 or 18 March 2014 substantially in the terms deposed to by Ms Francois.

17. However, it appears that by 19 March 2014 the Waakas were no longer interested in renting 4 Olbury Place. The “change of circumstances” was explained by Mrs Waaka as her son moving out of home. I infer that the departure of the son meant that the shed on the Ambarvale property (which Housing NSW was pressing to be removed) was no longer needed by the Waakas. Mrs Waaka told Ms Francois at about that time that the shed was to be removed, and there is evidence that the shed was in fact removed from the Ambarvale property on 31 March 2014. (It seems that, as a consequence, the application made by Housing NSW for termination of the tenancy was withdrawn and dismissed on 3 April 2014.)

18. For a time, Ms Francois continued to consider the letting of 4 Olbury Place. Charmayene Haenga, a member of the church congregation, inspected the property on about 28 March 2014 with a view to renting it. She deposed that a lot of cleaning and some repairs were needed, which Ms Francois said she would attend to. Mr Francois was at that stage in the process of moving out of 4 Olbury Place into 1 Olbury Place. Ms Haenga deposed, in effect, that she was not prepared to sign a lease until those matters had been attended to, and that she was going to inspect the property again about one week later.

19. It seems that Ms Francois was unsure about whether to retain 4 Olbury Place and rent it out, or sell it. By 30 March 2014 she was minded to sell the property rather than rent it to Ms Haenga. However, this was not made known to Ms Haenga before she had announced to the church congregation on 30 March 2014 that she had been “blessed with a rental”. When Ms Francois then told Ms Haenga that she was going to sell the property, Ms Haenga expressed her displeasure to Ms Francois.

20. Mr and Mrs Waaka were also at the church on 30 March 2014. At some stage there was discussion between them and Ms Francois about the idea of the Waakas purchasing 4 Olbury Place. There is a divergence in the evidence over who first raised the idea, but it is not necessary to resolve that issue. It is clear that an arrangement was made for the Waaka’s to go to Ms Francois’ place that evening to discuss the matter.

21. The Waaka’s claim against Ms Francois is largely based upon what was said at Ms Francois’ place during the evening of 30 March 2014. It is necessary to consider the evidence of that meeting in some detail.

22. Mr Waaka deposed in his first affidavit that sometime in March 2014 he and his wife met with Ms Francois, and a mortgage broker Ms Francois knew from the ANZ Bank by the name of David, at Ms Francois’ house. He deposed that the discussion included the following:

Ms Francois:   I know you are interested in buying the house but I would need you to start renting the place straight away until you get finance.

Mr Waaka:   Ok we could arrange that, but we’ll need to do a lot of work on the place before we could move in but we’re happy to pay rent straight away. We can finalise the sale once we get finance.

Ms Francois:   Seeing you are going to buy the place you can do with it what you want but you’ll have to pay for it yourself because I don’t have the money.

Mr Waaka:   Ok that suits us.

Ms Francois:   I can take the money you spend on the property off the sale price of the house.

Ms Francois:   I would want to get $320,000 for the property before renovations, but if you like I’ll count $17,000 for the value of the renovations as the deposit for the sale.

Mr Waaka:   Yes that would be good for us.

Ms Francois:   I would want to get $320 per week for rent and I’d like to start that from Sunday 6 April 2014.

Mr Waaka:   Yes that’s ok we can do that.

Ms Francois:   I think we should sign a lease for renting the property but I’d like you to try and finalise the loan within 3 months.

Mr Waaka:   3 months will not be enough we’ll need at least 6 months.

Ms Francois:   ok 3 to 6 months.

23. Mr Waaka also deposed that David told the Waakas that he thought he could set up a loan where a $17,000 deduction from the purchase price could be considered the deposit, so the Waakas would just need to have sufficient money for stamp duty.

24. Mrs Waaka deposed in her first affidavit that sometime in March 2014 she and her husband met with Ms Francois and the mortgage broker called David at Ms Francois’ house. She deposed that there was a discussion to the following effect:

Ms Francois:   I would like to sell the house to you, but you will need to move in and rent it from me until you can get a loan.

Mrs Waaka:   How much will the rent be?

Ms Francois:   $320 per week.

Mrs Waaka:   That is ok, but the house needs a lot of work to be lived in.

Ms Francois:   I am happy for you to fix the house up however you like because you are buying it. I will sell you the house for $337,000, but I will take $17,000 off the price to cover the cost of fixing the place up.

Mrs Waaka:   We would like to buy the house.

David:   You might not have to buy mortgage insurance if you can count the $17,000 as part of the deposit.

Ms Francois:   You can have 3 to 6 months to organise finance.

25. Ms Waaka deposed that David explained that he thought he would be able to set up a mortgage whereby $17,000 could be used as the deposit, and the Waakas would just need to have sufficient money for the stamp duty.

26. Mrs Waaka further deposed that Ms Francois said words to the effect:

If the value of the property drops in six months’ time, will you still be happy to pay $320,000?

27. Mrs Waaka deposed that she and her husband said that that was “fine”.

28. Both Mr and Mrs Waaka deposed that they inspected the property before they entered into the residential tenancy agreement with Ms Francois for the property.

29. Ms Francois deposed that on 30 March 2014 Mr and Mrs Waaka came to her house, possibly with their three youngest children, and asked to see the 4 Olbury Place property. Ms Francois deposed that she gave them the key, and when they returned there was a discussion to the following effect:

Mr Waaka:   We would like to buy your house.

Mrs Waaka:   We have some money saved up but can we rent the house until we save enough money for the deposit and stamp duty and get a loan?

Ms Francois:   How long will it take before you can buy the house?

Mrs Waaka:   We should have the money and be able to buy it by mid May.

Ms Francois:   Are you sure you are going to be able to buy the house by mid May because I want to sell the house not rent it out and I don’t want you to come back to me in May and tell me that you’re not buying the house anymore because I need to sell as soon as possible because I need the money?

Mrs Waaka:   Yes or at the latest by July when John does his taxes.

Ms Francois:   How much rent are you paying with Housing?

Mrs Waaka:   $295.00

Ms Francois:   I can’t afford less than $320 in rent because that’s the minimum it costs me for the house. The rent is going to be more expensive than what your paying in Housing.

Mrs Waaka:   I want to get out of Housing and John is working full-time now so the rent will go up when we tell Housing anyway.

Mr Waaka:   How much do you want for the house?

Ms Francois:   $320,000.

Mrs Waaka:   About the deposit can we organise something with the bank because in New Zealand there are arrangements we can do for the deposit?

Ms Francois:   I don’t know anything about that but we could see if the bank would accept a letter for the deposit.

Mrs Waaka:   Show us how to buy a house without any money.

Ms Francois:   I don’t know we would have to ask the bank whether they would be prepared to accept a letter regarding the 5% deposit and you would need to pay me off that 5% as a loan. So then the bank would settle me 95% of the $320,000, $304,000, so I could pay off my debts and you could pay me off the 5%. We could ask the ANZ bank loan officer if you like.

30. Ms Francois deposed that there was no mention of any renovations to the property during the discussions on 30 March 2014.

31. In their affidavits in reply, both Mr and Mrs Waaka deposed that they had been mistaken in thinking that the mortgage broker was present at the meeting on 30 March 2014. Mrs Waaka maintained, however, that the idea that the value of renovations could be counted towards the deposit was suggested by Ms Francois before the residential tenancy agreement was signed and before she and her husband moved in to 4 Olbury Place. Mr Waaka also maintained that there had been discussion about counting the cost of renovations towards the deposit so as to meet bank lending requirements. He said that Ms Francois had said that a deposit of about 5% would be needed and that “if you do renovations, I will say it is worth 5%”.

32. On the morning of 31 March 2014 Mrs Waaka and Ms Francois exchanged text messages in the following terms:

Mrs Waaka:   Hi Valerie, we could hardly sleep last night we are Sooo excited about buying your house. Have a blessed day.

Ms Francois:   I’m excited about selling it to u. I pray God blesses you with the funds you need asap. You have a blessed day too.

Mrs Waaka:   Yes Amen I believe He will bless us with the funds ASAP thanks.

33. Mrs Waaka agreed in cross-examination that at the time those text messages were sent she was aware that Ms Francois wanted to sell the house as soon as possible. She also agreed that she was aware that Ms Francois was then under financial pressure.

34. The substance of Ms Francois’ version of what occurred on the evening of 30 March 2014 was put to both Mr and Mrs Waaka in cross-examination.

35. Mrs Waaka agreed with some parts of Ms Francois’ version. She agreed, for example, that they told Ms Francois that they would like to buy the property, and that they had some money saved up. She agreed that Ms Francois asked how long it would take before the Waakas could buy the house. She agreed that Ms Francois said she wanted $320,000 for the property, although she later suggested that a price of $337,000 was mentioned. Mrs Waaka denied numerous parts of Ms Francois’ version. She denied, for example, that she said they should have the money by mid-May. She denied that Ms Francois asked whether she was sure about that and then spoke about a need to sell as soon as possible. Mrs Waaka denied that she told Ms Francois that they would be able to buy the property by July at the latest. Further, Mrs Waaka maintained that there was discussion about renovations and using renovations as a deposit for the house.

33. Mr Waaka agreed with practically all of Ms Francois’ version of what occurred at the 30 March 2014 meeting. Whilst he did not recall his wife saying they should have the money to buy the house by mid-May, he agreed that Ms Francois had said that she did not want to be told in May that the Waakas were not buying the house anymore. Mr Waaka did not recall Ms Francois saying that she needed to sell as soon as possible, although he later conceded that she said in March that she needed to sell the property. Mr Waaka did agree that his wife said that they would be able to buy the house by July at the latest. Mr Waaka also agreed that in the course of discussing the deposit, Ms Francois said that the bank might lend 95% and the 5% deposit could be a loan from her which the Waakas would pay off. Mr Waaka agreed that there was no discussion of a price of $337,000. He maintained that there was discussion about $17,000 and the carrying out of renovations.

34. Both Mr and Mrs Waaka stated in cross-examination that Ms Francois had said they could have three to six months to obtain finance. Mrs Waaka said that she understood that the time ran from when the lease was signed (on 7 April 2014).

35. I generally prefer Ms Francois’ account of the 30 March 2014 meeting to that of either Mrs Waaka or Mr Waaka. Whilst I accept that both Mr and Mrs Waaka attempted to provide their best recollections of what took place, I do not think that their recollections can be accepted as reliable. The accuracy of their accounts is undermined by their confusion about the presence of the mortgage broker called David. There was a meeting on 23 May 2014 involving the Waakas, Ms Francois and Mr David Roberts, a lending officer employed by the ANZ Bank. Both of the Waakas have erroneously attributed certain recollections of that later meeting (which took place after they had moved in to 4 Olbury Place) as having occurred on 30 March 2014. These errors cannot be dismissed as minor inaccuracies concerning relatively insignificant or peripheral details.

36. I consider that the reliability of Mrs Waaka’s evidence must be further questioned in light of her evidence concerning the earlier discussion about renting 4 Olbury Place. She was unable to recall the detail of that discussion, and she seemed intent upon downplaying the fact that she and her husband were at that time interested in renting the property.

37. I gained the impression that Ms Francois had a much better recollection of the detail of the discussions that took place in 2014 (including as to what occurred on 30 March 2014) than either Mr or Mrs Waaka. There were some aspects of her evidence (including her reluctance to accept that she had written certain Facebook posts, and her explanation of her attempts to evict the Waakas from the property in October and November 2014) which caused me to scrutinise her testimony with particular care. However, I ultimately formed the view that her evidence of the discussions was essentially accurate and reliable. As already mentioned, much of Ms Francois’ version of the 30 March 2014 meeting was accepted by Mr Waaka in cross-examination.

38. The main points of divergence between Ms Francois’ account and the accounts given by Mr and Mrs Waaka are:

1. whether there was discussion about renovations being undertaken and counted towards the deposit; and

2. whether Ms Francois said that the Waakas could have three to six months to obtain finance.

42. As to (1), I do not accept that anything was said to the effect that renovations could be done and they would be or might be able to be counted towards the deposit. I accept Ms Francois’ evidence as to what was said about a deposit. Mr Waaka largely conceded that such words were said, including that the 5% deposit could be a loan from Ms Francois which the Waakas would pay off. I also accept that there was no discussion on 30 March 2014 about a price of $337,000 or a deposit of $17,000. Insofar as Mr and Mrs Waaka assert that there was discussion about renovations counting towards the deposit, I think they are attributing to the discussion on 30 March 2014 conversation that in fact took place at the May 2014 meeting involving Mr Roberts. There may have been some mention on 30 March 2014 of works to be done to the house, but not in the manner asserted by the Waakas. In closing submissions, counsel for Mr and Mrs Waaka did not suggest that the evidence supported the conclusion that there was on 30 March 2014 a discussion about giving credit for renovations.

43. As to (2), I accept Ms Francois’ evidence to the effect that, after seeking an assurance that the Waakas would be able to buy the house by mid-May, and saying that she needed to sell as soon as possible, Mrs Waaka said words to the effect of:

Yes or at the latest by July when John does his taxes.

44. Mr Waaka agreed that his wife had said that they would be able to buy the house by July at the latest. I note further that a sale by July was subsequently referred to by Ms Francois in a text message she sent to Mrs Waaka on 17 October 2014, and in her application to the Civil and Administrative Tribunal in November 2014. It is true that a letter prepared by Ms Francois for the Waakas in September 2014 referred to an agreement “to purchase the property and settle the transaction within 3 to 6 months”. However, I accept Ms Francois’ evidence given in cross-examination that the letter, which was prepared for the purpose of assisting the Waakas to obtain finance, did not accurately record what was agreed in March 2014. It is likely that the recollections of Mr and Mrs Waaka in this respect are derived, probably unconsciously, from the terms of that letter.

45. On 3 April 2014 Mrs Waaka sent a text message to Ms Francois about terminating the lease with Housing NSW, and painting the inside of the house once Ms Francois had removed all of her belongings. Ms Francois deposed that painting had been discussed with Mrs Waaka on the day before.

46. Ms Francois and her daughter had completed their move out of the property by about 4 April 2014. Ms Francois deposed that at about that time she had a conversation with Mrs Waaka about tinting of the windows at the property.

47. On 5 April 2014 Ms Francois and Mrs Waaka exchanged text messages on the subject of works to the house. Ms Francois stated that whilst painting was okay, the Waakas should not proceed with any tinting of the windows or changes to the back room until “after the property has sold”. Ms Francois was apparently worried about the risk of still owning the property after it had been altered. Mrs Waaka stated that Ms Francois should not worry as they were only doing painting and hoping to remove a mouldy carpet from the back room, with other changes (including the installation of a cooktop and renovation of the kitchen) to be made once they bought the house. Ms Francois sent a further message in which she stated the cooktop and carpet removal were fine, and that the Waakas could “do floorboards if u like”. Mrs Waaka sent a further message stating that Ms Francois should not worry “we will respect you and what you have concerns about”. I note that there is no mention in these communications of any link between work to be done and the deposit for the purchase.

48. The Waakas took possession on 6 April 2014. That was the day after their daughter’s party which was held at the property.

49. Ms Francois prepared a residential tenancy agreement on 6 April 2014. Ms Francois deposed that she discussed the lease with Mrs Waaka who asked whether the lease could be “for 12 months just in case the loan doesn’t get approved and you need to sell to someone else”. This evidence was not contradicted by Mrs Waaka in her affidavit in reply, but in cross-examination she denied that she said those words. I accept Ms Francois’ evidence on this matter, which was not challenged. Ms Francois agreed to the twelve month term.

50. The lease was executed on 7 April 2014. It provided for rent of $320 per week.

51. The Waakas did not immediately move in to live at the property. That seems to have occurred (according to text messages sent by Mrs Waaka) by 27 April 2014, after the painting and polishing of floorboards was complete.

52. By that time, Ms Francois had told Mrs Waaka that the Waakas could install a new kitchen provided the work was done by a licensed tradesman. Works in the kitchen, including the installation of cupboards and an oven, appear to have commenced (again, according to text messages sent by Mrs Waaka) in early to mid-May.

53. As mentioned earlier, on 23 May 2014 a meeting was held at 1 Olbury Place attended by the Waakas, Ms Francois and Mr Roberts from the ANZ Bank. The meeting was organised by Ms Francois following a request made by Mrs Waaka. Ms Francois deposed that before Mr Roberts arrived, Mrs Waaka asked if something could be organised so the Bank would pay the full $320,000 and “we not owe you anything”. Ms Francois replied:

You can tell the bank that you have done some renovations and ask if the bank is willing to accept that as the 5% deposit.

54. Ms Francois says that she did some calculations and then said:

5% will be around $17,000 on top of the $320,000 so the sale price will have to be $337,000 and the loan $320,000. You will need to provide me with a receipt for the renovations as I am not willing to pay tax for the $17,000.

55. In cross-examination, both Mrs and Mr Waaka accepted that Ms Francois said those words, and that they had agreed with what she said. I find that the possibility of using renovations to constitute a deposit was first raised on 23 May 2014 as deposed to by Ms Francois.

56. Ms Francois deposed that during the discussion which took place after Mr Roberts arrived, Mr Waaka asked him whether the bank might accept the renovations for a 5% deposit, and Mr Roberts said he believed the bank would accept that.

57. Mr Roberts (who was not required for cross-examination) deposed that during the meeting he said that a receipt for the renovations would “satisfy the bank’s requirement for the 5% genuine savings policy” to allow the Waakas to borrow 95% of the purchase price. Mr Roberts further deposed that the Waakas provided some financial information which indicated sufficient income “to be suitable to apply for a loan”. Mr Roberts deposed that he told the Waakas that if they applied the loan should be approved, subject to income, employment and credit history checks, and Mrs Waaka said that they would think about it and come back to him.

58. In their affidavits in reply, Mr and Mrs Waaka did not challenge either Ms Francois’ or Mr Roberts’ accounts of what was said at the meeting. They both agreed in cross-examination that no loan application was signed by them on 23 May 2014.

59. I note in passing that it appears that earlier on 23 May 2014 Mrs Waaka had handed back the keys to the Ambarvale property.

60. Both Mrs Waaka and Mr Waaka accepted that prior to 23 May 2014 no steps had been taken to obtain finance to buy the property.

61. Even though Mrs Waaka had said that they would come back to Mr Roberts, this did not occur. Mr Waaka deposed that he waited for Mr Roberts to come back to him, and after two or three months he called Mr Roberts who told him that they would not be able to get a loan through the ANZ Bank. The suggested timing of that conversation is problematic having regard to a text message sent by Mrs Waaka to Ms Francois on 10 September 2014 which refers to Mr Waaka wanting to make an appointment to see Mr Roberts, and a further text message sent by Mrs Waaka that day stating that Mr Waaka had spoken briefly with “David from ANZ”. In cross-examination, Mr Waaka accepted that his affidavit may be incorrect in this respect. The likelihood is that Mr Waaka did not speak to Mr Roberts after the May meeting until 10 September 2014.

62. Prior to September, the Waakas seem to have done little or nothing towards the obtaining of finance. I note that Ms Francois deposed that when she returned in early July after about two weeks in Mauritius, Mr Waaka informed her that they would be organising the loan within the next few days. In cross-examination, Mr Waaka agreed that he could have said words to that effect.

63. In about late July or early August arrangements were made for Ms Francois, who is an accountant, to prepare Mr Waaka’s tax return. It was anticipated that he would receive a substantial refund from the Australian Taxation Office. It seems that the return was completed by 8 August 2014. Mr Francois gave evidence that Mr Waaka would have received his refund in two weeks.

64. Ms Francois agreed in cross-examination that notwithstanding the passing of the end of July, she was prepared to allow the Waakas a longer time to raise their finance. She said that she had been told that they were seeking finance, and she also said that she had little choice because the Waakas had to go to New Zealand for about two weeks in mid to late August.

65. Mr Waaka deposed that around August or September 2014 Ms Francois had been putting some pressure on them “because of the time it was taking for us to secure a loan”. That is consistent with Ms Francois’ evidence to the effect that shortly after the Waakas returned from New Zealand she asked Mrs Waaka what was happening with the house, and said that she cannot afford to wait any longer, to which Mrs Waaka said that they still wanted to buy the house and will be organising a loan. I accept that a conversation to that effect occurred.

66. Text messages sent by Ms Francois to Mrs Waaka in the first week of September suggest that she was then anxious to speak to the Waakas “about the house”.

67. It seems that the Waakas were prompted to take some action in relation to the obtaining of finance. On 10 September 2014 Mrs Waaka sent the text message to Ms Francois about making an appointment to see Mr Roberts, and Mr Waaka spoke to Mr Roberts briefly later that day. Mr Waaka deposed that when it became clear that finance from the ANZ Bank was not possible, an approach was made to Mr Alan Monson, a finance broker who was known to the Waakas.

68. The Waakas met with Mr Monson on 13 September 2014. Shortly after that meeting, Mrs Waaka told Ms Francois that the broker needed a letter about the $17,000 going towards the purchase price. On 15 September 2014 Ms Francois drafted a letter, addressed to the Waakas, and gave the letter to Mr Waaka. The letter was in the following terms:

This is to confirm that renovations were undertaken at your expense, between the periods of March 2014 and September 2014, at 4 Olbury Place Airds NSW 2560. The renovations included painting of the house, removing carpets, sanding and varnishing the floor boards & replacing the kitchen.

If you purchase the property at 4 Olbury Place Airds NSW 2560 for $337,000, I will accept the renovations done to the house as part of the 5% deposit, for the value of up to $17,000, towards the purchase of the house. Please note that an invoice will be required for the deposit.

69. On about 16 September 2014 Mrs Waaka telephoned Ms Francois and asked her for another letter for the broker. Ms Francois deposed that she made notes whilst Mrs Waaka told her what the broker required. No such notes are in evidence. In any event, on 16 September 2014 Ms Francois prepared a further letter, addressed to the Waakas, which was in the following terms:

This is to confirm that I had intended to sell the property at 4 Olbury Place Airds NSW 2560, in March 2014 and that I had negotiated with the tenants Sue & John Waaka that they could rent the property, if they agreed to purchase the property and settle the transaction within 3 to 6 months.

70. Ms Francois gave the letter to Mr Waaka later on 16 September 2014.

71. Late in the evening on 16 September 2014 Mrs Waaka sent a text message to Ms Francois which included the following:

John asked me to ask you if you would come with us to talk to our mortgage broker if we can get an appointment tomorrow arvo night to explain deposit.

72. It appears that the Waakas and Ms Francois went to see Mr Monson on the afternoon of 17 September 2014. There was discussion about whether any bank would accept the renovations as a deposit.

73. On 17 September 2014 a solicitor retained by the Waakas, Mr Michael Slattery, sent a letter to Lyn Camp Conveyancing, who were acting for Ms Francois, requesting a copy of the contract for sale and various other documents. Later on 17 September 2014 Lyn Kemp Conveyancing sent a letter to Mr Slattery enclosing a copy of the contract for sale “for approval and execution by your client with a view to an early exchange”. On 19 September 2014 Lyn Kemp Conveyancing sent an email to Mr Slattery advising that Ms Francois had agreed that on exchange of contracts renovation works up to a value of $17,000 will be taken as payment towards the deposit. I note that the draft contract that had earlier been supplied referred to a price of $337,000 and a deposit of $33,700.

74. Ms Francois deposed that on 19 September 2014 both Mrs Waaka and Mr Waaka telephoned her and said that in order for the loan to be approved the broker needed a statutory declaration saying that the Waakas had given $17,000 to Ms Francois. She deposed that she said she could not do that as it would be lying. The Waakas both deny making a request in those terms or asking Ms Francois to provide a false statutory declaration.

75. Early on the morning of 20 September 2014 Ms Francois sent a text message to Mrs Waaka which was in the following terms:

Good morning Sue, I have reflected on what I was asked to do yesterday which could have been detrimental for a lifetime to me. I would not have asked you or anyone to risk their livelihood for me. I think its best we keep everything on a business level from here on. Let me know if you will buy the house by Tuesday if possible. If you don’t buy the house I will need to know how much you spent renevating [sic] & will organise real estate. I will need access to sheds to get my things out also. Thank you. God bless you.

76. Later that day Mrs Waaka sent a text to Ms Francois which was in the following terms:

Hi Valerie read your txt understand where your coming from let this not be a wedge or division between us. We have given paperwork to Alan today to get the ball rolling by Monday papers will be sorted and signed for the loan. John said come over for coffee later.

77. I am prepared to accept that the Waakas did not intentionally set out to have Ms Francois make a false statutory declaration. However, the context of the text messages set out above indicates that, whatever the precise terms of the request, Ms Francois considered that she had been asked to make a false statutory declaration and was unwilling to do so, and Mrs Waaka could, on reflection, understand Ms Francois’ position.

78. On about 26 September 2014 Ms Francois spoke to Mrs Waaka and asked her what was happening with the house. Mrs Waaka told her that they were waiting on the broker.

79. Ms Francois gave evidence, which was not challenged, that she rang Mr Monson on 26 September 2014 and was told by him that he was still waiting on some documents he had requested, and after that it would take two weeks to get loan approval.

80. On about 2 October 2014 the Waakas asked Ms Francois to come over to discuss the matter. It seems that the discussion centred upon a possible loan from Liberty Finance. Mr Waaka said that Mr Monson had told him that they were “the only lender that will consider our loan”. Mr Waaka deposed that Mr Monson said they should not take the loan because of the high rate of interest. Mrs Waaka gave evidence to similar effect. Ms Francois herself told the Waakas that it was up to them but “if it was me I wouldn’t take this loan”.

81. By that time, Mr Waaka had spoken to his employer, Mr Michael Welsh, about the obtaining of finance. Mr Welsh (who was not required for cross-examination) spoke to his finance broker, Mr George, who advised that without a deposit the Waakas would have a lot of difficulty obtaining a mortgage. There was discussion between Mr Welsh and Mr George about setting up a trust to facilitate the payment of a deposit. It seems that the proposal was to advance the money through a trust, and some form of security would be taken over the property until the advance was repaid. Mr Welsh then spoke to an accountant, Mr Thomson, about setting up the trust arrangement. Mr Welsh told Mr Waaka that it would take about two weeks to set up.

77. Ms Francois deposed that at the meeting on 2 October 2014 Mr Waaka told her that if she needed money his boss (Mr Welsh) would “give you money to help you”. Ms Francois deposed that she replied:

Ok that’s fine I’ll wait the two weeks, its all right about the money I can wait until then.

83. Mr Waaka gave evidence to similar effect. He deposed that after he made the offer of money “to tide her over” Ms Francois said she would be able to manage “as long as it will be soon”. I accept Ms Francois’ evidence that on 2 October 2014 she said she was prepared to wait two weeks.

84. Ms Francois heard nothing further from the Waakas during that period.

85. On the morning of 17 October 2014 she sent text messages to Mrs Waaka in the following terms:

Hi Sue, I haven’t heard from you regarding the sale of the house. Its now the 17th. I cannot wait any longer unfortunately. I will be organising to sell the house through a real estate today. He will need to have access to the house over the weekend to take photos. Please let me know when you are free for him to come. Thank you.

I forgot also to ask. How much have you spent on the house? I will need to know this to know the minimum I will sell the house for. Thank you.

86. In the afternoon and evening of 17 October 2014 text messages were sent by Mrs Waaka and Ms Francois in the following terms:

Mrs Waaka:   I have forward your message to John he has said we are still buying the house John will confirm tonight what’s happening.

Ms Francois:   Hi Sue, I will still put the house on the market & get the real estate to proceed. I will remove the house from the market once there is a signed contract. If the real estate gets a contract signed first, then I will go with that buyer. I am not will [sic] to hold the house back any longer.

Mrs Waaka:   Can you please wait till Tuesday John boss is assisting us by giving us more deposit towards buying the house plus stamp duty its in his accountants hands we still want to buy the house we know it’s a big ask.

Mrs Waaka:   We will be going for signed contract ASAP re house as directed from John boss.

Ms Francois:   Not unless you can show me proof that your loan has been approved.

Ms Francois:   I cannot wait till Tuesday, that’s another weekend. I have waited 7 weeks. The house would have been settled by now if I had listed it back then. This is costing me about $1,500 out of my pocket per month.

Mrs Waaka:   Can we talk face to face please.

Ms Francois:   Can you show me proof of your loan approval? Because quite frankly I am not happy at all atm. So you probably don’t want to see me face to face.

Mrs Waaka:   We are fine to see you face to face do you want us to come over now?

Ms Francois:   Is your loan approved? If not there is nothing to talk about.

87. The Waakas in fact had no loan approval for the purchase at that time. On or shortly after 17 October 2014, Mr Welsh received a draft trust deed (dated 21 October 2014) that had been prepared by Mr Thomson. At that point, Mr Welsh may have been in a position to proceed to establish the trust and make funds available for a deposit (of 20%), and it seems that he told Mr Waaka that he could enter into a contract of purchase. Nevertheless, the Waakas would still need to secure finance for the balance of the purchase price. Mr Waaka conceded in cross-examination that no loan application was ever made.

88. Further text messages were exchanged between Mrs Waaka and Ms Francois throughout the remainder of 17 October 2014. It is not necessary to set out their terms, although it is noteworthy that in one of them Ms Francois stated:

This should have been settled by July. That was my understanding in April.

89. It is sufficient to note that Ms Francois thereafter maintained a position to the effect that she was not obliged to sell the property to the Waakas.

90. The relationship between Ms Francois and the Waakas appears to have quickly deteriorated from that point. The deterioration was exacerbated by some text messages sent to Ms Francois by Mrs Waaka’s daughter, Miriama. By the morning of 18 October 2014 Ms Francois had decided that she would not sell the property to the Waakas, and she wanted them to move out of the property. Ms Francois gave evidence in cross-examination that later on 18 October 2014, following a conversation with her daughter, she decided that she did not want to sell the property at all.

91. Ms Francois subsequently made unsuccessful attempts to terminate the residential tenancy agreement she had with the Waakas. The Waakas remained in occupation of the property following the expiry of the twelve month term under the residential tenancy agreement. They commenced these proceedings on 12 May 2015, and shortly thereafter lodged a caveat to protect their alleged interest in the property. Various orders have been made by the Court extending the operation of the caveat. The caveat currently continues in operation until further order of the Court.

Submissions

92. The plaintiffs’ case was put as one of equitable proprietary estoppel of the kind referred to in the fifth proposition distilled by Priestley JA (from the decision of the High Court in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387) in Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466 at 472, namely:

(5) For equitable estoppel to operate in circumstances such as those in 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.

93. In Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 at 610 Priestley JA expanded his fifth proposition to:

5.   For equitable estoppel to operate 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 or an interest granted to the plaintiff by the defendant, and reliance on that by the plaintiff, in circumstances where departure from the assumption by the defendant would be unconscionable.

94. Priestley JA dissented in Austotel Pty Ltd v Franklins Selfserve Pty Ltd (supra) but Kirby P (at 585) expressed his agreement with his Honour’s expansion of the fifth proposition. This formulation has since been cited with approval in the Full Court of the Federal Court in S & E Promotions Pty Ltd v Tobin Brothers Pty Ltd (1994) 122 ALR 637 at 653 and by the Court of Appeal, for example in DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728; [2011] NSWCA 348 at [52] per Meagher JA (with whom Macfarlan JA agreed) and Doueihi v Construction Technologies Australia Pty Ltd (2016) 92 NSWLR 247; [2016] NSWCA 105 at [167] per Gleeson JA (with whom Beazley P and Leeming JA agreed).

95. Mr Batley of counsel, who appeared for the plaintiffs, also referred to the six elements identified by Brennan J in Waltons Stores (Interstate) Ltd v Maher (supra) at 428-9 as being necessary to prove in order to make out an equitable estoppel. In Austotel Pty Ltd v Franklins Selfserve Pty Ltd (supra) Priestley JA stated (at 615-6) that even if those tests do not represent the view of the majority of the High Court in that case, they are useful as a check.

96. Mr Batley submitted that the relevant assumption or expectation “was in relation to the commitment of the defendant to sell the property to [the plaintiffs] when they had raised the funds to do so”. Mr Batley submitted that a period of three to six months was agreed upon, but this was to be regarded as a desirable outcome, not a restriction or condition on the promise made by the defendant to sell the property to the plaintiffs when they were able to finance it. It was not suggested that there was no time limit; however, it was put that when the defendant determined that she was not going to proceed with a sale to the plaintiffs, it was unconscionable to refuse to fulfil the assumption or expectation “when the plaintiffs had their finances arranged”.

97. Mr Batley submitted that due to the plaintiffs’ acts of reliance in giving up their Housing NSW tenancy and carrying out works at the property they would suffer detriment if the defendant was able to depart from the assumption or expectation she created. He submitted that the prima facie remedy is to fulfil the expectation the defendant created in the plaintiffs (see Sullivan v Sullivan (2006) 13 BPR 24,755; [2006] NSWCA 312 at [27]-[32] per Handley JA; Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 at [85]). It was submitted that fulfilment of the expectation would be achieved by requiring the defendant to sell the property to the plaintiffs for $320,000 (being $337,000 less the $17,000 to be allowed for the plaintiffs’ efforts and expenditure in improving the property).

98. Mr Connolly of counsel appeared for the defendant. He submitted that the evidence established that the arrangement made on 30 March 2014 was to the effect that the defendant agreed not to put the property on the market but to rent it to the plaintiffs for $320 per week, on the understanding that the plaintiffs would buy the property for a price of $320,000 by July 2014 at the latest. Mr Connolly submitted that the defendant did everything that was required of her under the arrangement, and she fulfilled her promise or the expectation she had contributed to creating. It was submitted that from July 2014 the defendant was free to sell to someone else, or not sell at all, although for a period she did her best to assist the plaintiffs to obtain finance. Mr Connolly submitted that it could not be said that in October 2014 the defendant resiled from any promise she had made to the plaintiffs. Any expectation she had contributed to was fulfilled.

99. Mr Connolly accepted that the arrangement made on 30 March 2014 was part of the reason why the plaintiffs left their Housing NSW property in Ambarvale. Mr Connolly submitted that the works carried out by the plaintiffs at the property were not done at the defendant’s request, and were undertaken in the knowledge that the plaintiffs might not become the owners of the property. In short, the works were done at the plaintiffs’ own risk.

Determination

100. The elements of an equitable estoppel by encouragement were famously described by Lord Kingsdown in Ramsden v Dyson (1866) LR 1 HL 129 at 170:

If a man, under a verbal agreement with a landlord for a certain interest in land, or what amounts to the same thing, under an expectation, created or encouraged by the landlord, that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord, and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation.

101. The above statement was described by Handley JA in Sullivan v Sullivan (supra) at [11] as the “classic statement” of the ingredients of an estoppel by encouragement (see also DHJPM Pty Ltd v Blackthorn Resources Ltd (supra) at [53]; Doueihi v Construction Technologies Australia Pty Ltd (supra) at [61]).

102. The circumstances in which a proprietary estoppel will arise include those in which assurances are given so as to create or encourage an assumption that “a particular legal relationship would be established” or “an interest” would be granted (see Doueihi v Construction Technologies Australia Pty Ltd (supra) at [154]). In any case where such an estoppel is sought to be established, it is necessary to pay careful attention to the identification of the assumption or expectation which the object of the estoppel is said to be estopped from denying or asserting (see DHJPM Pty Ltd v Blackthorn Resources Ltd (supra) at [44]).

103. The alleged estoppel largely rests upon the discussion that occurred on 30 March 2014 concerning the possibility of a sale of the property to the Waakas. I have found Ms Francois’ account of that discussion to be essentially accurate and reliable.

104. The terms of the discussion make it clear that Ms Francois wanted to sell the property as soon as possible. Mrs Waaka accepted that when the text messages were exchanged on the following morning, she knew that to be the case. The terms of the discussion also made it clear that the Waakas required some time in which to save more money and “get a loan” before they could buy the house. In that context, the parties addressed the question of how long it would take the Waakas to be in a position to be able to buy the property.

105. I have found that Mrs Waaka told Ms Francois that they would be able to buy the house “at the latest by July when [Mr Waaka] does his taxes”. That statement would reasonably have been understood as conveying that by that time the Waakas would have sufficient funds of their own (including Mr Waaka’s taxation refund) and finance in place to enable them to enter into a contract of purchase. In these circumstances, Ms Francois should not be taken to have accepted that the Waakas could have a “reasonable time” to secure finance. Neither should she be taken to have accepted that “July when [Mr Waaka] does his taxes” was merely a desirable outcome rather than a condition of the arrangement. In my opinion, that time was put forward by Mrs Waaka as the latest time within which the Waakas would be in a position to buy, and may be taken to have been accepted as such.

106. Other aspects of the arrangement that were agreed or accepted included the purchase price of $320,000 and the Waakas becoming tenants paying $320 per week in rent. The terms of the tenancy were further discussed on 6 April 2014 in terms which reveal that Mrs Waaka appreciated that if approval for a loan was not obtained, Ms Francois might sell the property to someone else.

107. Based on the terms of the discussion that occurred on 30 March 2014, and taking into account that the parties were friends discussing a significant property transaction in a relatively informal manner, I consider that Ms Francois thereby created or encouraged an assumption or expectation that she would enter into a contract to sell the property to the Waakas for $320,000, provided that such contract was entered into no later than about July 2014 when Mr Waaka obtained his taxation refund. The Waakas could reasonably expect that during that time Ms Francois would keep the property available for sale to them.

108. I do not accept that it would have been reasonable, based on Ms Francois’ conduct, to assume or expect that she would sell the property to the Waakas when they had raised the funds to do so (as submitted by Mr Batley) or once the Waakas had arranged finances (as deposed to by Mr Waaka) without any limitation as to time. I note that Mr Waaka accepted in cross-examination that Ms Francois had not given them unlimited time to arrange finances.

109. I do accept that in reliance upon what Ms Francois said in the discussion on 30 March 2014 the Waakas moved into the property and gave up their Housing NSW tenancy. I further accept that in so acting, the Waakas gave up a relatively secure tenancy (likely to be one treated as a “continuous lease” under applicable Housing NSW policies) in favour of a twelve month private tenancy at an increased rent, and would be unlikely to be able to readily obtain a new Housing NSW tenancy. Moreover, those acts of reliance were known by Ms Francois and were indeed inherent in the arrangements she made with the Waakas. By reason of those acts of reliance, the Waakas would suffer detriment were Ms Francois to depart from the assumption or expectation I have identified.

110. The Waakas’ subsequent undertaking of works at the property may also be regarded as acts of reliance upon what Ms Francois said in the discussion on 30 March 2014. In my view, those works were undertaken by the Waakas in the belief that they would have the opportunity to purchase the property as discussed with Ms Francois. Even though the Waakas were not required or requested to carry out the works, and they must have appreciated that there was a risk that they would not become the owners of the property, the works ought be seen as acts done by the Waakas in furtherance of the arrangements and in the hope that they would later own the property. The conduct of Ms Francois can thus be seen as having played a part in the decisions of the Waakas to undertake the works (see Sidhu v Van Dyke (supra) at [71]-[73]). Ms Francois gave permission to the Waakas to perform various works and was aware of them taking place. Again, by reason of their efforts in that regard, the Waakas would suffer detriment were Ms Francois to depart from the assumption or expectation I have identified.

111. Nevertheless, I do not think that Ms Francois has departed from the assumption or expectation that she would enter into a contract to sell the property to the Waakas provided such contract was entered into no later than about July 2014 when Mr Waaka obtained his taxation refund. In circumstances where Mr Waaka, with Ms Francois’ assistance, lodged his taxation return on about 8 August 2014 and would have received his taxation refund two weeks later, the period of time allowed by the proviso could be regarded as extending to about late August 2014. However, from at least that time, the Waakas could not reasonably have expected that Ms Francois would keep the property available for sale to them. They could not reasonably have expected that Ms Francois would thereafter remain obliged, in any legal or moral sense, to sell the property to them. In short, the time within which the opportunity to purchase the property was given had passed.

112. It is true that Ms Francois did not then state that the opportunity had passed. Rather, she afforded further time to the Waakas to get into a position to be able to buy the property. In September 2014 she provided assistance to the Waakas in their attempts to obtain finance. These actions of Ms Francois do not change the nature of the assumption or expectation that arose out of the discussion of 30 March 2014.

113. The position announced by Ms Francois on 17 October 2014 to the effect that she was putting the property on the market generally did not involve a departure from the assumption or expectation. It is noteworthy that Mrs Waaka did not suggest there was any departure at the time. She pleaded with Ms Francois for a bit more time, but appreciated that this was “a big ask”. Similarly, Ms Francois’ statement the next day that she had decided that she would not sell the property to the Waakas did not involve any departure from the assumption or expectation. That would be the case even if the Waakas had by then secured finance.

114. In my opinion, Ms Francois acted consistently with the assumption or expectation. She provided the Waakas with the opportunity to become the purchasers of the property, in accordance with the arrangements made. It is unfortunate that the Waakas were unable to take advantage of that opportunity.

115. As there was adherence to the assumption, the Waakas, who altered their position on the faith of it, cannot complain (see the statement of Dixon J in Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 674-675 – a statement of principle recently cited in Sidhu v Van Dyke (supra) at [80]-[81] which has been applied in the context of equitable estoppel including in this State in Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2010] NSWCA 84 at [42]-[44]; Sullivan v Sullivan (supra) at [18]-[19]). The underlying purpose of the estoppel is to protect a plaintiff against the detriment which would flow from reliance upon an assumption or expectation created by a defendant were the assumption or expectation to be deserted by the defendant.

116. Moreover, in circumstances where the improvements made to the property were undertaken by the Waakas on their own initiative and in the knowledge that they might not become the owners of the property, Ms Francois was not obliged to offer any recompense to the Waakas in respect of such works when she decided not to sell the property to them.

101. For the above reasons, the plaintiffs’ estoppel case has not been established.

102. It is not necessary to deal with various factual controversies, including the dispute concerning the state of the property around late March/early April 2014. Mr Batley accepted that it was not necessary for the Court to make findings on that issue. I should note, however, that some of the evidence given about the dirty, rundown and even squalid condition of the premises struck me as highly exaggerated, particularly the evidence given by Ms Karaitana and Ms Haenga (who was nonetheless upset when she found out that Ms Francois would not be renting the property to her). I preferred the evidence given by Mr Lagoutaris, a real estate agent who inspected the property on 2 April 2014.

103. I should also state that I found the evidence given by Mr Allen concerning the work he performed on the kitchen at the property (including as to the time he and others spent on the job, and the payment arrangements) to be most unimpressive.

104. The Court will order that the Amended Statement of Claim be dismissed. The Court will also order that the plaintiffs withdraw the caveat (AJ492365) they lodged in respect of the property. The plaintiffs will be ordered to pay the defendant’s costs of the proceedings.

**********

Decision last updated: 09 June 2017