Appellant v Respondent

2 In appealing the orders of Evans AsJ, Remar seeks orders that pursuant to r 4.07 the proceeding continue as if commenced by writ, that the proceeding be transferred to the Commercial and Equity Division, that there be pleadings and consequential orders. In substance, Remar contends that the summary process in O 53 is inapplicable or inappropriate given the nature of Remar's interest in the property.

3 By its terms, O 53 applies where the plaintiff claims the recovery of land which is occupied solely by a person or persons who entered into occupation or, having been a licensee or licensees, remained in occupation without the plaintiff's licence or consent or that of any predecessor in title of the plaintiff. Accordingly, the land must be occupied solely by a person or persons within one or other of two categories. The person or persons must be (a) a person or persons who entered into occupation without the plaintiff's licence or consent or that of any predecessor in title of his, or (b) a person or persons who, having been a licensee or licensees, remained in occupation without the plaintiff's licence or consent or that of any predecessor in title of his. A tenant holding over after the termination of the tenancy is not within either category, and the service of notice on the tenant purporting to determine the holding over does not alter the position.[1]

4 Remar relies on the affidavit of Luis Philipe Brites Martins de Brito sworn 27 July 2010. Mr Brito is a director of Remar, which is a not-for-profit incorporated association operating as a drug rehabilitation centre providing accommodation and rehabilitation services to adults seeking to overcome drug and alcohol addictions. Remar operates under the international umbrella company 'Remar International', which is a non-profit organisation having its headquarters in Spain. In Australia, Remar works with the Melbourne, Frankston, Geelong and Sunshine Magistrates' Courts, and the specialised drug court in Dandenong. It is a registered agency with Corrections Victoria, enabling residents to complete their community based orders with Remar.

5 Mr Brito deposes that on 7 February 2009, the property that Remar was then leasing was completely destroyed in the bushfires. While he and his wife were looking for an alternative property, they were contacted by a Mr Calvin Miller of Beepos ('Beepos'). Mr Miller offered Remar a property in Gippsland for lease. The property in question was the property that is the subject of the current dispute.

6 Remar moved into the property on 5 March 2009. It entered into a sub-lease of the property with Southern Cross Youth Initiative ('SCYI'), which had leased the property from Beepos. However, on 11 March 2009, Mr Brito met with Mr Miller and other directors of Beepos, who informed him that Beepos was under financial pressure and needed to arrange for the property to be sold. On 12 May 2009, Mr Brito and his wife met with the directors of Beepos to discuss the terms on which Remar would purchase the property from Beepos. It was agreed that Remar would buy 50% of the property on vendor finance terms from Beepos for a total price of $367,000 payable by instalments of $8,000 per month for three years and ten months. Remar would have the option to buy the other 50% of the property from Beepos if it chose to do so.

7 Mr Brito deposes that the 'only other outstanding issue' was the application by SCYI for a planning permit from the local council to use the property as an adult education centre. Remar needed the planning permit to enable the property to be used for adult education. Mr Brito deposes that, '[t]here would be no point in Remar purchasing the property if it could not run its program from it so the purchase was conditional upon Remar obtaining the necessary amended planning permits attaching to the property.'[2]

8 Mr Brito deposes that some time in May or June 2009, Mr Champness of the plaintiff and his wife visited from New South Wales. Mr Brito told Mr Champness that Beepos had given Remar the opportunity to buy the property and that Remar had accepted the offer subject to the grant of the planning permit. At this point, Mr Champness spontaneously offered to donate the sum of $100,000 to Remar to put towards the purchase of the property in the form of a gift of $4,000 per month for 25 months. Although Mr Champness and his wife returned to Queensland that week, in the following weeks Mr Champness called Mr Brito several times to ask if Remar had obtained the planning permit and to again offer the donation to be applied towards the purchase of the property.

9 On about 30 July 2009, Mr Brito learned from consultants that the planning permit application could take up to two years if there were objections and the matter had to be referred to VCAT.

10 On 7 August 2009, Mr Brito had another meeting with the Beepos directors at which he was told that Beepos had decided not to sell the property but to lease it instead to Remar for one year at $3,900 per month. Mr Brito did not immediately accept this offer. However, he did tell Mr Champness about it.

11 On 11 August 2009, Mr Brito and his wife had another meeting with the Beepos directors. Mr Brito deposes that he explained to the Beepos directors that although the rental offer was fair, Remar would prefer monthly payments to go towards the final purchase of the property. He told the directors that Remar International would be able to finance the purchase of 50% of the property and that he would need a little more time to organise the purchase because he would need to approach banks to work out how much Remar could borrow and on what terms. According to Mr Brito, the meeting concluded on the basis that Beepos would place the property on the market to be auctioned. If Remar was in a position to secure finance prior to the property being sold, then Beepos would sell it to Remar for the 'originally agreed price' of $734,000. If there was an offer from the market to buy the property that was acceptable to Beepos prior to Remar being able to secure finance, then Beepos would sell to that buyer. In the meantime, the sub-lease between Remar and SCYI would continue and at the end of that term Remar could stay on a month to month basis until it secured finance or the property was sold on the market.

12 Mr Brito deposes that he told Mr Champness about the meeting. Mr Champness told him not to worry, that he had the money to help Remar.

13 On 22 August 2009, Mr and Mrs Britos, Mr and Mrs Champness and the directors of Beepos held a meeting for the purpose of discussing how the Champness company, 'Dayspring', could buy the property for Remar. Mr Brito alleges that Mr Champness said, amongst other things, 'I want Dayspring to buy the property from Beepos for Remar. Dayspring will then sell the property to Remar and Remar will repay Dayspring.' When he was asked to clarify he said, 'Dayspring will buy the property from Beepos to help Remar and then Dayspring and Remar will enter into another contract whereby Remar buys the property from Dayspring on the same terms that it was originally going to buy the property from Beepos.' At this point, one of the Beepos directors said that improvements had been made to the property and the property was worth more than Beepos had agreed to sell it to Remar for. He asked Mr Champness whether Mr Champness understood that he would be buying a property for Remar with improvements and at a reduced price. Mr Champness allegedly said, 'Yes.' When asked whether the property would be in the name of Remar, he said that it would be in Dayspring's name but Dayspring would then sell the property to Remar.

14 Mr Brito deposes that after this meeting, he understood there was no need for Remar to continue to look for finance from the banks because Dayspring would be its 'white knight'. He stopped making enquiries with the banks and stopped looking for ways to raise finance for Remar to buy the property.

15 Mr Brito deposes that after the payment of the deposit and in the period leading up to the settlement, he had a conversation with Mr Champness in which he asked Mr Champness how and when Remar would start to pay the $8,000 per month to Dayspring for the purchase of the property. Mr Champness allegedly said that he was happy for Remar not to pay anything for the first year. When Mr Brito insisted on sticking to the agreement, Mr Champness said, 'Are you sure you can afford it? Maybe $5,000 would be better.' Mr Brito does not depose to what the outcome of that conversation was. However, he deposes to a further conversation in October 2009 in which Mr Champness indicated to him that he wanted to use the property for a number of other religious purposes and Mr Brito resisted this on the basis that it was inappropriate to mix families with adults suffering serious mental issues.

16 According to Mr Brito, matters deteriorated in early November 2009 when Mr Champness visited him and his wife and handed them a letter dated 30 October 2009 which was a notice to vacate the property. Mr Champness apparently wanted an organisation called 'Concern Australia' to move into the property and Remar had to go because it was not prepared to share. Mr Champness told Mr Brito that Dayspring would still be interested in donating the $100,000 it had originally offered to Remar, but Remar would need to leave the property. At that meeting, Mr Brito says that he offered to pay Dayspring $40,000 if Dayspring entered into the contract to sell the property to Remar. Remar would commence paying the $8,000 per month and in two to three years finance would be available for the balance. Mr Brito deposes that Mr Champness said he did not want to sell the property to Remar anymore.

17 On 13 November 2009, Mr Brito was advised by Remar's planning consultant that the permit application would be approved by council. On 30 November 2009, South Gippsland Shire Council approved the planning permit application to enable the property to be used as an education centre.

18 Mr Brito further deposes that he attempted to arrange a 'pre-litigation mediation' in an attempt to resolve the matter. However, Dayspring commenced the O 53 proceeding against Remar. As a result, Mr Brito instructed his lawyers to lodge a caveat over the property.

19 For its part, Dayspring relies on the affidavit of Gordon Champness sworn on 7 July 2010. Mr Champness deposes that Dayspring is a not for profit organisation limited by guarantee, which undertakes charitable work. It purchased the property with a view to providing facilities for its various functions.

20 Mr Champness deposes that Dayspring purchased the property from Beepos by contract dated 24 September 2009. The purchase price for the property was $734,000 payable by a deposit of $73,400. The balance of the price, being $660,600, was payable on 30 October 2009. The contract of sale provided that the purchaser was entitled to vacant possession upon payment of the balance of the purchase price and the vendor's warranties included a warranty that no prior or inconsistent rights had been granted and that there was no lease or other possessory agreement affecting the land.

21 As to his dealings with Mr Brito and Remar, Mr Champness deposes that he became aware of Remar in about October 2007 and he and his wife became acquainted with Luis and Karina Brito. They were concerned about them when they heard about the bushfires in Victoria in February 2009. However, towards the end of that month they learned that Remar had been offered temporary accommodation at the property, by way of a sub-lease from SCYI.

22 Mr Champness deposes that in the period between June and August 2009, he and his wife visited the Britos at the property and discussed the following matters:

• His wife indicated that the property could fulfil an ambition she had for Dayspring to conduct a training centre;
• Mr Brito told him that the owners of the property had granted to Mr Brito a peppercorn lease for six months, while he found a suitable venue for the relocation of the Remar rehabilitation programme;
• Mr Brito told him that he had the opportunity to acquire the property for Remar for $600,000 on vendor finance. When Mr Champness offered to provide a deposit for the purchase if Remar could raise the balance of the purchase price, Mr Brito rejected the proposal;
• Towards the middle of August, Mrs Brito told him that the owner of the property was not interested in vendor finance and Mr Brito told him that the asking price for the property was $720,000.

23 Mr Champness deposes that in August 2009, when it became clear that Remar was not financially able to purchase the property, he and his wife advised Mr and Mrs Brito that Dayspring was interested in purchasing the property for itself. On 22 August 2009 he commenced negotiations with Beepos to acquire the property. Although Mr and Mrs Brito indicated a desire for Remar to have a continued involvement with the property, and Mr and Mrs Champness met with them and their solicitor for that purpose, they decided to proceed with the purchase of the property with the assistance of their own solicitor. Mr Champness understood that a copy of the contract for the purchase of the property was provided to Mr and Mrs Brito for their information.

24 Mr Champness deposes that shortly after signing the contract for the purchase of the property, he and his wife met with Mr and Mrs Brito. They discussed their proposal to ensure that the property was fully used by various community and Christian programmes. In this conversation, Mr Champness says that Mr Brito told him that he was not interested in a lease over the property and that unless he could purchase the property from Dayspring to give him complete control of the property, he would look for another venue and leave the property.

25 Mr Champness deposes that settlement was delayed to 5 November 2009. However, in early October 2009, the vendor confirmed that no new lease had been granted to Remar. After settlement, Dayspring received a letter from Remar which canvassed a number of issues and included an offer for Remar to purchase the property from Dayspring 'on condition'. That offer was not accepted by Dayspring. Remar was informed on a number of occasions that the property was not for sale. From about mid November 2009 until December 2009, the parties explored the possibility of Remar remaining in occupation of the property, but those discussions were unproductive. From December 2009, Dayspring sought from Remar a proposal and plan for Remar to vacate the property in an orderly manner.

26 Mr Champness deposes to Remar being formally notified to vacate the property by letters dated 16 December 2009 and 5 February 2010. He says that Remar has no lease, licence or other entitlement to occupy the property, but has refused to vacate it.

27 It will be observed that there is a stark difference in what the parties say occurred between them in relation to the purchase of the land. It is the plaintiff's case that taken at its highest, there is nothing in Remar's evidence that would or could establish an immediate right to possession of the property. In contrast, Dayspring has paid for and had transferred to it the property. The contract of sale provided for the property to be transferred with vacant possession. For the past nine months, so Dayspring says, Remar has been squatting on the property, neither paying rent nor attempting to exercise what it now says is its right to purchase the property. In those circumstances, Dayspring submits, an O 53 application is appropriate.

28 Moreover, Dayspring submits that on the basis of Remar's evidence, there is no specifically enforceable agreement for sale, and no constructive trust could arise on that basis. The terms of an alleged agreement to sell the property to Remar are uncertain, as there was no agreement about when Remar was supposed to pay for the property. Moreover, it is clear on Remar's evidence that it had no wish to commit to the purchase of the property until a planning permit had been granted. This did not occur before 30 November 2009, by which time Dayspring had settled on the property.

29 Further, Dayspring submits that even if the defendant could establish an entitlement, those rights are protected by the caveat that it has in place. Any interests that it may have are protected by the caveat and would be the subject of separate proceedings.

30 On behalf of Remar, it was submitted that Remar's evidence is that Dayspring represented that (a) it would buy the land for Remar to enable Remar to continue to carry on its charitable purposes and (b) Remar could then buy the land from Dayspring on terms, at the time that suited it. As a result of these representations, Remar did not buy the land, which it otherwise would have done. Dayspring's present claim for possession is contrary to its representations and is to Remar's detriment. Hence, Dayspring ought to be estopped from making its claim. Remar refers to established law that an estoppel may give rise to an entitlement to purchase land, even if the time of purchase and the terms and conditions are wholly uncertain: Flinn v Flinn.[3]

31 Accordingly, Remar denies that Dayspring is entitled to possession. It says that in consequence of promissory estoppels, Dayspring is estopped from denying that it purchased the land for the benefit of Remar, from removing Remar from the land and from denying that Remar is entitled to purchase the land on agreed terms at a time to be agreed. Remar has an equitable interest in the land. In argument before the Court, Remar submitted that it had an equitable licence to remain on the land.

32 Of course, Remar's interest does not have to be established definitively in an interlocutory application of this kind. Remar contends that it has an arguable defence to the application for possession and the nature of that defence makes it inappropriate for the proceedings to continue by way of summary process. It ought to be given the opportunity to make a positive case and seek orders and relief arising from the estoppels that it alleges. There is no process to do this under O 53.

33 Order 53 is intended to apply in clear cases where there is no question to try.[4] As Tadgell JA said in Pappas v Bowmark Pty Ltd: [5]

O 53 is intended to enable speedy resolution, in favour of a proprietor of land, of a dispute whereby trespassers are keeping the proprietor out. It is a prerequisite to the application of O 53 that the persons who are in possession and whom it is desired to have removed should have gone into occupation as licensees without the plaintiff's consent and remain in occupation without the plaintiff's consent. In this case the appellant initially went into possession as a tenant and the question which was presented to the Court was whether she was entitled to continue in possession as a tenant. In those circumstances it seems to me that O 53 was unavailable to provide jurisdiction. That is not to say that the mere existence of a factual dispute will deny the application of O 53. It may be possible to resolve such a dispute quite readily and fairly so that the summary jurisdiction afforded by O 53 can conscientiously be available. This is not a case of that kind. The matter required resolution at least of the questions whether the agreement that the parties had reached on 5 December 1997 was as the respondent asserted or as the appellant asserted, and whether the appellant was in breach of it when the respondent re-entered on 22 January this year. The judge does not appear to have resolved these disputed questions of fact which were presented to him. What was appropriate when it became evident - as it did not until the very day on which the matters were heard - that there was a dispute of this kind, was to send the matter off for trial with or without pleadings. As it was, it seems to me, pleadings in this case were necessary in order that the several issues that were raised should have been properly exposed and dealt with.

34 In Tolhurst Druce & Emmerson v Maryvell Investments Pty Ltd,[6] Dodds-Streeton J, after reviewing the authorities, concluded that the O 53 procedure does not preclude the determination of a disputed factual or legal issue, provided that it can be done readily and fairly. After referring to Pappas v Bowmark, her Honour observed that in Palazzo, Brooking J appeared to endorse the approach of Bridge LJ who, in Shah v Givert,[7] did not consider that the procedure was confined to virtually uncontested cases or cases where there was no issue or question to try, but rather, permitted the Court in its discretion to determine the disputed issue where appropriate.

35 In this case, however, I am satisfied that it would not be possible to resolve the dispute between the parties 'quite readily and fairly' under the O53 procedure. It seems to me that Remar has an arguable defence arising from the allegations in the Brito affidavit: there is at least some evidence that Remar expected that a particular relationship would exist between it and Dayspring involving Dayspring acquiring the property on its behalf, that Dayspring induced Remar to adopt that assumption or expectation, that Remar abstained from taking steps to secure alternative finance in reliance on the assumption or expectation and that Dayspring knew or intended this, and that Dayspring's failure to fulfil that expectation or assumption has caused Remar detriment, in that Remar did not seek and secure alternative funding to acquire the property in its own name and allowed Dayspring to be its "white knight".[8] Such a defence is arguable, even though there is a real question as to Remar's right to immediate possession, given the nature of the agreement or arrangement that is asserted.

36 The complex nature of the defence makes the O 53 procedure inappropriate.

37 It is true that Remar has available to it proceedings flowing from its caveat and that it could instigate other proceedings to assert its rights against Dayspring. However, the arrangements for which Remar contends are relevant to both its defence to the O 53 application and to any proceedings it might bring to assert its right to the property. It is convenient that all questions relating to Remar's interest in the property be heard and determined in the one proceeding.

38 The orders made by Evans AsJ provide for a trial preceded by the filing of affidavits by the parties. They clearly contemplate that the hearing of the originating motion will involve the determination of disputed facts. One option would be to simply extend the time for the filing and service of affidavits and for the hearing of the application, to enable the parties to put on all of the evidence that they require. Remar has made it clear that it requires further time to organise its evidence.

39 However, in my view, it is desirable that there be pleadings in this case in order that the issues be properly exposed and dealt with. In my view, this will assist Dayspring if, as it contends, the basis upon which Remar claims to have an interest in the land is not sustainable.

40 This does not mean that the dispute will be allowed to linger. I propose to make orders which provide for pleadings to be concluded by the end of September. There will then be a pre-trial directions hearing to enable the matter to be fixed for trial in November, if that is convenient for the parties.

[1] Pappas v Bowmark Pty Ltd [1998] VSCA 120.

[2] Affidavit of Luis Philipe Brites Martins de Brito sworn 27 July 2010, [11].

[3] [1999] VSCA 109; [1999] 3 VR 712, 738-44 (Brooking, Charles and Batt JJA).

[4] Palazzo v Pullen (Unreported, Supreme Court of Victoria, No. 6184/92, Brooking J, 24 July 1992) ('Palazzo'); Williams v Rampino [2002] VSC 343.

[5] [1998] VSCA 120 [13].

[6] [2007] VSC 271.

[7] (1980) 124 Sol Jo 513.

[8] See Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387.