Chin, Anthony & Ors v Miller, Jeffrey George & Anor [1981] FCA 168

Federal Court of Australia|1981-09-08|Before: Gallop JJ, Fisher J, Toohey J, Keely J

Contract - agreement to buy land and business and plant equipment - notice to complete - trial judge not satisfied that contracts signed by respondents - role of appellate

court where trial judge assessed credit and reliability

ANTHONY CHIN, PETER DESMOND O'SHEA, CHIN SIK HOE, CAPRICORNIA MOTELS PTY LTD and CAPRICORNIA PENTHOUSE

RESTAURANTS PTY LTD v. JEFFREY GEORGE MILLER and LYNETTE NONA MILLER

ANTHONY CHIM, PETLP NESNOND O'SHE?, Gites SIn STE, CAPPICORNTA MOTELS PTY

AND: JEOFPREY GHhOPSE MILLER and LYWETTe ONS "TLLES Pesrcondents KEELY, FISHER AND GALLOP JT. PEASONS FOP JUDGMENT

In this matter I have had the benefit of reading the

I add, however, that in my cpinion 1t was open to the learned trial judge to find that Graham did not intend that his statement that the Millers had signed tne contract would be acted upon by thé vendors and also to find that Graham was not aware that the vendors would so act. I agree with Fisher J. in accepting as correct the finding of the trial judge that there was nothing said on 20 Avril 1977 between Parish and Grahem to suggest that the appellants would or were likely to act upon the assurance by Graham.

The last sentence of O'Shea's letter to Grahan of 13

"As tne purchasers olan to open for business next week, @arly sigdnina and return of the docunents would be eporeciate?."

In my opinion that sentence should not be construed 25 meaning that the vendors would act or would be likely to ect upon an oral statement by Graham that the contracts had been signed by the Millers. The sentence does not stete or, in my view, itoly tnat the purchasers desire to "open for business" but thet trey cannot do so until the signed documents ere returned. The use of the word "plan" ratner than the word "desire" conveys te ny mind that it was planned that the purchasers vould "open for business next week" and thet they had already nade the necessery plans and arrangements to do so. It was in the light of those

plans that it "would be appreciated" if "the documents" were

BR ee oe ete et ee ee rlteneeeeeetindenanendinte tn alltetteh 664 cand nba te ated sa

signed and returned "early". The benefit to the personal appellants of having the purchasers in possession - referred to by Fisher J. - lends some support to this construction of the sentence. .

teve , reltoling 2 pagel ae a oy ot the Reasons fe- Todyment

NORTHERN TERRITORY DISTRICT REGISTRY) N.T. G No.4 of 1980 ) )

ON APPEAL FROM THE SUPREME COURT OF THE NORTHERN TERRITORY

ANTHONY CHIN, PETER DESMOND O'SHEA CHIN SIK HOE, CAPRICORNIA MOTELS PTY LIMITED and CAPRICORNIA PENTHOUSE RESTAURANTS PTY. LIMITED

REASONS FOR DECISION FISHER J.: This is an appeal from a decision of Toohey J. in the Supreme Court of the Northern Territory whereby he dismissed the claims of the appellants against the respondents. The first three named appellants ("the personal appellants") are the owners and vendors of certain land and premises in Darwin ("the land") and the remaining two appellants ("the corporate appellants") at an earlier stage respectively conducted motel and restaurant businesses on the land. The corporate appellants are the vendors of the piant equipmen: and business names used in conjunction with the motel and restaurant businesses. The personal appellants are the only directors and shareholders of the corporate appellants, The respondents are

alleged to have entered with others into agreements to buy the land

and the business plant and equipment from the appellants. The learnec

trial judge dismissed the claim of the appellants for a declaration that the respondents were parties to enforceable contracts of sale and also their claim that the respondents were liable to reimburse the appellants for monies paid under a guarantee of overdraft

accomodation, Both claims were the subjéct of the notice of appeal

but before us the appeal against the latter claim was abandoned.

The circumstances out of which the latigation arose are set out in detail in the reasons of the trial judge. Except as expressly referred to hereafter these facts to the extent relevant to the resolution of this appeal were not in dispute. It 1s

however necessary to relate the background circumstances so as to

At all relevant times the personal appellants were the registered proprietors as lessees of the land. Prior to 1976 the corporate appellants carried on a motel and restaurant business thereon. However on 15 August 1976 the personal appellants sub- leased the land for three years to persons named Young and Vale, who also conducted the two businesses. One Peter Douglas Smith ("Mr. Smith") was employed in the business by Young and Vale.

He and his wife were defendants to the proceedings, but are not parties to this appeal. Prior to Christmas 1976 negotiations took place between Young and Vale on the one part and the Smiths and the respondents ("all four of whom being the purchasers") with a view to the purchasers taking over the businesses and an assignment

of the sublease. However the appellants intervened in the

negotiations, probably without the knowledge of Young and Vale,

and suggested that the purchasers buy the head lease and the business assets from them. In March 1977, at which time Young

and Vale were in arrears with their rent, the appellant O'Shea

who appears to have conducted negotiations on behalf of all appellants, met with the purchasers in Sydney. With the assistance of a solicitor by the name of Graham who was introduced by the respondents, a deed was prepared which acknowledged that negotiations were on foot, that the price was $550,000, and that although formal agreements had "not been signed or reached" the purchasers were advancing $73,000 to the vendor O'Shea as a holding deposit the repayment of which sum was charged on certain assets

of the purchasers. The securities for this charge were to be surrendered to the purchasers if contracts for the purchases

were not signed and completion did not take place. More detailed consideration of this deed is not necessary as 1t is hereafter

only of peripheral significance. The deed was only signed by O'Shea for the vendors but by all the purchasers who subsequently

During the balance of the month of March there was much activity in Darwin. A firm of solicitors in that city was instructed to make the necessary searches and enquiries and to prepare draft contracts of sale. In the middle of the month Young and Vale were evicted from the land, leaving the premises in a very bad state of repair and the businesses ceased to operate.

The Smiths however continued to reside on the premises and they assisted to clean up and repair the damage. Later Mr. Smith made alterations to the restaurant, and there was evidence that he

desired to resume operating the businesses as soon as possible.

On 22 March, O'Shea sent draft contracts to the respondents to which were attached draft securities which were to cover that portion of the purchase price which was payable by instalments, These instalments were to be charged on the land and business chattels. On 23 March an account was opened with the Commercial Bank of Australia Limited 1n Darwin by the purchasers under the name "Millsmith" a business name which they had registered. This account was guaranteed to the extent of $2,000 by the farstnamed corporate appellant, and there was evidence to the effect that this was to enable the liquor licence of the restaurant to be renewed and paid for with Mr. Smith proposed as the nominee of the latter appellant. As such nominee he was obliged to live on the premises, and O'Shea said that the consequence was that Mr. Smith had the care but not the full control of the premises. None of the personal appellants resided on the premises. Early in April the same corporate appellant executed a further guarantee of the Millsmith account to a limit of $10,000 but there was an arrangement with the bank that no drawings secured by this guarantee were to be made until the bank was advised by O'Shea. There is no doubt that on the evidence the purpose of these guarantees was to enable the purchasers to obtain funds to commence

Over Easter 1977 the respondents visited Darwin and after they left there was a meeting on 13 April, the Tuesday after Easter, at the offices of the Darwin solicitors. The personal appellants and the corporate appellants signed or sealed as vendors their respective agreements and the Smiths signed as purchasers in each instance in the presence of a solicitor Parish. On the

same day O'Shea wrote to Graham enclosing the signed agreements

for signature by the respondents. It is desirable to set this

Mr. John E. Graham, 13th April 1977. 23 Oxford Road, INGLEBURN N.S.W. 2565

As discussed with Jeffrey and Lynette Miller during their visit to Darwin, Special Condition Clause 3, has been amended to their satisfaction, initialled by all Parties here and the amended Documents are now enclosed for their Signature. Would you please amend Mr & Mrs Miller's

Two (2) Copies of Agreement re Plant and Equipment etc.
Two (2) Copies of Agreement for Sale and Purchase.

One (1) Photostat Lease No 2212 (a clear copy). Please note stated purpose of Lease 1s "Business (Motel) and Residential Purposes.")

One (1). Letter Department of N.T. re Zoning of Lot 2665: (Please note confirmation of zoning as "Motel Site.")

One (1) Photostat letter Mildren & Partners showing consent to Transfer has been obtained from Lands Branch

One (1) Photostat letter from Mildren & Partners concernzc Rates/Charges for 1976/77. Please note that outstanding amount $389.01 relates to disputed garbage charges, which will be paid prior to settlement.)

Building Board and Dept. Services and Property ietters have been requested and will follow as soon as they come to hand.

Mr. Parrish will telephone you today to confirm that all matters relating to signing of the documents have received attention.

All repairs, painting etc are nearing completion and the Inventory is now being brought up to the same level as when leased to Mr. Vale, on 16/8/76.

As the Purchasers plan to open for business next week, early signing and return of the Agreements would be appreciated.

During the succeeding days O'Shea was pressing Parish and Perish was pressing Graham for confirmation that the respondents had signed the agreements and that the appellants' signed copy was on the way back to Darwin. On 20 April Parish had a telephone discussion with Graham, during which the latter said that his clients had signed the contract and that it would be returned to Darwin that day. This evidence on the part of Parish was accepted by the trial judge. Graham did not give evidence in the proceedings although the respondents both did. Upon receipt of this information from Parish O'Shea gave possession of the premises to the Smiths to enable the businesses to commence operating and he also on that or the succeeding day notified the Bank Manager

that the guarantee for a total of $10,000 "could be relied upon".

Being disturbed that a copy of the contract signed by the respondents had not been received 1n Darwin, Parish wrote on 29 April 1977 the followzng letter to Graham:

Mr. John E. Graham, Barrister and Solicitor, 23 Oxford Street, INGLEBURN N.S.W. 2565

Re: Miller and Smith - Proposed Purchase of Lot 2665 East Point Road, Fannie Bay, Darwin

We refer to our telephone conversation of 28th April 1977.

We must advise that our clients were most disturbed to

learn that the duly executed Contract had not been forwarded from your office. When the writer spoke to you on 19th and 20th April you advised that the Contract had been signed

and would be despatched to Darwin forthwith. On the strength of this personal assurance, our clients permitted Mr. Smith to enter the premises and commence business and on the 20th April, 1977 Mr. O'Shea signed various bank guarantees to give Messrs. Smith and Miller sufficient working capital to start operating.

Mr. Smith has now been operating the business at the Restaurant (Motel) for over a week and you will appreciate our clients concern for the contract has not been received in Darwin.

As you confirmed in our telephone conversation of the 28th April 1977 that you were satisfied with the replies to the various enquiries made about the property we cannot under- stand why the contract has not been sent.

If you have not already done so, please forward the duly Signed contract by return mail.

Graham on 13 May 1977 wrote in reply the following letter.

"Mildren & Pcortners . 13th May 1977 Solicitors, P.O. Box 3246

Re: Miller and Smith - Proposed purchase of Lot 2665 East Point Road, Fannie Bay, Darwin

I hereby acknowledge receipt of your letter dated 29th

ultimo. When my client Mr. & Mrs, Miller signed the contract, I told Mr. Parish that they took the contract home with them as at that stage they were still not ready to exchange contract because they were certain items missing in the motel that were in the inventory which was annexed to both agreements.

I deny emphatically at any time did I tell Mr. Parish that contracts were in the mail.

When Mr. Smith commenced business in the Restaurant, your client knew that contracts had not been exchanged in this matter.

For your information I enclose herewith the deed, the original which I have in my possession, signed by all parties to the effect that all mortgages and Traders Bills of Sale are not valid and are to be surrendered unless an exchange of contracts in this matter has taken place,

At present I am waiting for further instructions from my clients.

On 20 May 1977 Messrs, Cridland and Bauer solicitors of Darwin wrote to O'Shea advising that Mr. Smith was vacating the premises on Monday 20 May, which date was amended to 30 May by a later letter. There was no evidence that the appellants took any steps to operate the businesses themselves or to obtain another to do so when Mr. Smith left the premises. On 15 August 1977 the personal appellants gave notices purporting to rely upon the @efault provisions in the agreements for sale and purchase requiring the purchasers to complete and advising that upon failure to comply with the notices they would exercise their rights as set out in the notices. There being no actzyon on the part of the purchasers the personal appellants commenced proceedings on 12 December 1977, to which proceedings the corporate appellants were at trial joined as plaintiffs. The appellants' claims as relevant to this. appeal were for declarations that the purchasers had entered into

enforceable agreements to purchase, that the contracts to purchase

had been rescinded by the notices of 15 August 1977 and for

The relevant findings of the trial judge can be summarised as follows. He was not satisfied that the respondents had signed the contract. However he accepted that Graham had made a statement to the effect that the contracts were signed by the respondents and that he made such a statement as ostensible agent for the Millers. Upon receipt of advice concerning Graham's statement the Smiths on behalf of all the purchasers were given possession of the land and business by the appellants. However he found that the Millers

were not estopped from denying that they had signed the contracts

as in his view the giving of possession and the signing of the guarantees did not amount to detriment in the relevant sense. Furthermore he held that Graham did not antend and was not aware that his statements would be acted upon by the vendors.

For their submissions to succeed in this appeal the appellants must at the outset establish one of two basic propositions. Their counsel put forward these propositions in the alternative, which, in the order dealt with by the trial judge, but not in the order of counsel's presentation, are as follows:

(a) That we should be prepared to find and should find contrary

to the trial judge's conclusions that the respondents had in fact signed each of the agreements for sale and

(b) In the alternative that the respondents are estopped from denying that they signed the agreements.

The essence of counsel's argument on submission (a) was that , notwithstanding the trial judge's finding made after hearing evidence from the respondents,this Court should be prepared to make a contrary finding. There was clear evidence, he said, upon the basis of which we should not accept the truth of Mr. Miller's denial that he had signed. There was, he contended, unequivocal evidence that he had lied in identifying the agreements for sale and purchase, which documents had obviously been subjected to interference or tampering, and thus his denial that he had signed should not be accepted. Moreover notwithstanding the advantage which the trial judge had of seeing and assessing Mr, Miller, we should not be loathe to substitute our own finding because he said the trial judge himself had made a mistake in the identification of documents and the dates of happenings in relation thereto. We

should therefore, he submitted, be prepared to reconsider the

objective facts and to draw the inference that Mr, Miller had

In the alternative, if the proper conclusion was that the respondents had not signed, his contention in accordance with submission (b) above was that the trial judge was wrong in finding that there was no detriment sufficient to support a plea of estoppel anda wrong in concluding that the representation was made without any intention or knowledge on the part of Graham that it would be acted upon. Counsel accepted that a positive finding must be made on both of these points before the plea of estoppel is available to the appellants. Counsel for the respondents submitted to us that the appellants could not in any event rely on estoppel in the circumstance of this matter. He said they were attempting to found their cause of action on the alleged estoppel, 1.e. to use it asa. sword and not a shield. There 1s authority for the proposition that estoppel can not be used in this way (Coombe v Coombe fi9si]

2 K.B. 215) but this contention was not put to the trial judge and it

2s not necessary to rule upon this submission for the purpose of

In respect of the applicant's first submission it is my opinion that for a number of reasons we should not be prepared to set aside the trial judge's finding that the Millers did not sign the relevant documents. It 1s doubtless open to us on the authority of Warren v Coombes (1979) 23 A.L.R. 405 to interfere, and we would be obliged to interfere, if we are of opinion that he made a wrong finding of fact or drew a wrong inference. However the finding of fact that the trial judge made, namely that he was not satisfied that either of the

Millers had signed was made in reliance upon his opinion of them

as witnesses and on his assessment, based at least in part on

their demeanour, of their credit and reliability. In these circumstances an appellate court will at the very least be disinclinec to interfere and will review very critically the submissions in support of intervention. Moreover on this issue the onus of establishing, on the balance of probabilities, that the Millers signed lies on the appellants as plaintiffs. As the trial judge

said, there was no sworn evidence to the effect that they did sign and there 1s sworn evidence from two persons, one of whom he

accepted without reservation, that they did not sign.

In support of his submission that the Millers' evidence should not be accepted, counsel relied upon the state of the contract documents produced by the Millers. He drew attention to the fact that these documents which Mr. Miller said they were asked to sign an April, comprised a facsimile of portions of the documents signed that month by the appellants and portions of the drafts sent by O'Shea to them in March. This may well be the case but counsel's difficulty 1s to establish what significance this fact has in relatic: to the primary problem. We were asked to draw the conclusion that Mr. Miller lied when he identified the documents he produced as those which he was asked to sign in April. It was also contended that Mr. Miller had tampered with the documents as produced for the purpose of creating confusion and making it more difficult for the appellants to establish that the parties were ad idem. However such is far from being the only or in my opinion the most likely

It was alleged that Mr. Miller lied in identifying the documents produced by him as the documents sent down for signature However on my reading of the evidence it does mt necessarily establish such a strongly stated submission. The documents are voluminous, with only minor variations between the drafts and the executed documents and it 2s not unlikely or surprising that a layman would be mistaken unless the differences were expressly drawn to his attention. On my reading of the transcript and the reasons for decision of the trial judge all parties involved were understandably not able at all times precisely to differen- tiate between the various documents. Certainly the witnesses were confused, the trial judge, it was contended,made an error and on my reading of the transcript I am not satisfied that counse: in examining witnesses put their questions sufficiently clearly to ensure there were no misunderstandings. In his general answer when he identified the documents Mr. Miller certainly made an error. It is equally likely that he was confused and made an honest mistake and counsel for the appellant in cross-examination of him did not identify and point out to Mr. Miller the material differences between the various documents for the purpose of determining whether he deliberately lied or made a mere mistake.

Counsel for the appellant also sought to use the discrepancies in the documents produced by Mr. Miller as evidence of the fact that they had been deliberately tampered with for the purpose of creating confusion. However this contention was not put to Mr. Miller ain cross-examination and thus he did not have the opportunity to speak in his defence and give any explanation he had. Moreover the documents are voluminous and

had been both in his hands and in the hands of his solicitors and

his accountants. He had only obtained them from his solicitor Graham some few weeks before he gave evidence. Thus on this score alone it is equally if not more likely that they and the earlier drafts had been taken apart by one or other of his advisors for some purpose such as photocopying and reassembled incorrectly. But even more cogent and compelling is the fact that the documents produced by

Mr. Miller were in a significant respect less favourable to him than the documents signed by the vendors in Darwin. Counsel for the appellant agreed that this was the case. The documents signed in Darwin provided for the deposit to be paid within twelve months and the documents produced by Mr. Miller provided for this payment to be made within six months. Moreover one of the documents produced by Mr. Miller contained a provision that was not in the draft documents to the effect that the purchasers should pay all the stamp duty and not merely one half thereof. It as unlikely that a party tampering, for the alleged purpose, with a document

would do so in such a way as to impose the greater liability on

In my opinion this contention of the appellant does not

justify our disturbing the finding of the trial judge nor does

any error he may have made in identifying various documents and in stating the circumstances 1n which the same were received by the Millers or their solicitors. Any such error has no direct bearing upon the crucial question which is whether the Millers assertion that they did not sign should be accepted. If the trial judge did make the error alleged it was quite understandable in

the light of the confused state of the evidence. In my opinion

there is no justification for us to interfere with the trial

judge's finding of fact that the Millers did not sign the

Turning to the plea of estoppel I can be brief in dealing with counsel's contention of "no knowledge and no intention". If this was the only hurdle he had to overcome to make out his case on this score, I would be inclined to accept his submission. The trial judge said, quite correctly, that there was nothing said on 20 April between Parish and Graham to suggest that the appellart would or were likely to act upon the assurance by Graham, However in my opinion this assurance must be considered against the background of the last sentence of O'Shea's letter to Graham of 13 April which enclosed the agreements for signature. This sentence was in the following terms:

"As the purchasers plan to open for business next week,

early signing and return of the documents would be appreciated".

In these circumstances it was 1n my opinion at least apen to the trial judge to find, that the signing of the documents was an element of significance to the appellants with regard to the opening of the prem1ses for business, Graham was or should have been aware that they were likely to act on his statement. It 1s not necessary for me to make a concluded finding in this regard because I am against the appellant on the second essential matter,

namely that of detriment which he must establish contrary to the

Before the appellants as representees of Graham's statement that the documents had been signed, can rely upon estoppel they must establish the element of detriment, namely that they have in fact altered their position in reliance upon the statement and in

consequence it would be unjust to permit the respondents to resile

N 15. from that statement. The trial judge found no, or no sufficient detriment, and such a finding was challenged as a finding of fact and not law. Counsel for the appellants strongly contended that in the circumstances the granting of possession to the purchasers and the giving of the guarantee was sufficient detriment, and this

Unless it be established that the appellants altered their position to their detriment on the faith of Graham's statement 1t can not be said that it would be "unjust" to permit the respondents to resile or depart from their statement. I shall for the purpose of considering the nature and extent of the detriment allegedly suffered by the appellants ignore for the moment the fact that possession was given by the personal appellants and the guarantee by the firstnamed corporate appellant, notwithstanding my very considerable doubt whether the shareholders and directors of a company can rely upon alteration of position by that company to support their personal plea of estoppel. We were not referred

The rationale of detriment as an essential consideration of estoppel 1s explained by Dixon J. as he then was in Grundt v The Great Boulder Gold Mines Limited (1938) 59 C.L.R. 641 at 674:

"That other must have so acted or abstained from acting upon the footing of the state of affairs assumed that he would suffer a detriment if the opposite party were afterwards allowed to set up rights against him inconsistent with the assumption. In stating this essential condition, particularly where the estoppel flows from representation, it is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and

leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose 1S to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption

upon which the former acted or abstained from acting.

This means that the real detriment or harm from which

the law seeks to give protection is that which would

were deserted that lead to it... His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment."

From this it would appear to follow that the alteration of position must produce "real detriment or harm", which real detriment or harm must flow as a consequence of the assertion of a different state of affairs. In the circumstances of the present matter, the question arises whether the alteration of position by the appellants by letting into possession and giving of a guarantee was a real detriment or harm, suffered by the appellants in consequence of the departure by the respondents from the assumption that they had signed the agreements. The appellants must accept the onus

of satisfying the Court that there was a real detriment or harm,

Because the contract which the personal appellants desired to enforce was the agreement in respect of the land, they primarily relied upon the alleged detriment as arising out of the granting of possession. It was alleged that by so doing they suffered real harm and detriment. The trial judge found to the contrary, and in my opinion correctly so. It 1s important to consider this act in the light of the evidence and in the context of a commercial transaction. The appellants anticipated that they had sold the land and premises for $531,515, of which sum $450,000 (or 85% of the purchase price) was to be left outstanding and secured by mortgage of the premises. This amount was repayable by monthly instalments of $6,500 during the first five years. The preservation

of the value of the premises as a security was thus of vital

concern to the personal appellants, and being business premises this entailed the maintenance in particular of the businesses

and their goodwill. In this way they had a real interest in ensuring that there was as little delay as possible in the resumption of business in the restaurant and motel after Young

and Vale departed. By giving up to the purchasers the possession of the business for a period of one month it was contended that the personal appellants had suffered "real detriment or harm" in the event that the sale did not proceed. But a careful reading of the evidence supports the finding of the trial judge that they "must have gained some advantage from the work done by the Smiths, from the engagement by the defendants of staff and by the

assumption of responsibility for telephone and electricity charges

'The preservation and renewal at the purchasers' expense of the

liquor licence was also in the interests of the appellants. Moreover there Was no evidence at all that any of the appellants suffered any loss of money or moneys worth or any loss of commercial opportunity as a result of the change of possession. There is no clear evidence as to when the purchasers asserted that they were not bound by Graham's statement but it was certainly subsequent to their departure from the land and business premises. The personal appellants had thus resumed their earlier position and were back in possession and the only loss they could possibly sustain was a monetary loss suffered during the period of occupation. They made no attempt to prove or quantify any such loss. The evidence for the appellants and their counsel's argument both appear to have proceeded upon the assumption that

the purchasers' entry into possession for the purpose of conducting

the businesses was per se such a detriment to the appellants.

It seems to me impossible to discern any real harm or positive detriment as having been suffered by the personal appellants, and in fact it is much easier to see the change of possession as a mutual advantage and certainly advantageous to the personal appellants even if the sale did not proceed. But a real harm or positive detriment entailing a loss in money or moneys worth is the condition precedent which the authorities require. It is so stated in Spencer Bower and Turner "Estoppel by Representation" 3rd Edition page 92 es an essential element of estoppel, namely; "(e) Damage. Finally it must be shown that loss of money or moneys worth was (12) the actual, and (11) the natural and probable result of the representee having acted as he did on the fact of the representation". At page 104 appears the following passage,

representee must show to have resulted, 1n a natural

chain of causation, from the alteration of position

means, and means only, actual and temporal damage, -

some loss of money or moneys worth, which admits of quantification or assessment."

There are many authorities which establish that the representee who relies upon estoppel must prove that he has been materially affected and I cite dicta from only those which appear

The necessity for material prejudice to be established was

noted by the Privy Council in Fung Kai Sun v Chan Fui Hing supra

where the alleged detriment lay in the fact that mortgagors delayed for three weeks before they informed the mortgagee that

Lord Reid who delivered the judgment of the Judicial

"In their Lordship's judgment this is the true test; the chance of recovering [from the forger} must have been materially prejudiced by the delay. In the present case their Lordships are of opinion that the appellant has

not shown that he was materially prejudiced by the delay. The appellant took no action when he was told of the forgery, and he did not give evidence in this case. In the absence of any explanation from him and the whole trend of the evidence being to show that he would not have taken any action even if he had been told of the forgery earlier, their Lordships are not prepared to assume that he might have done so, and it 1s only on that assumption that he can have suffered any possible prejudice by the law.'

In this matter also the trial judge was invited to act on an assumption, namely that the delivering up of possession for one month or thereabouts was in itself a detriment. However this proposition must be considered in the light of the fact that the appellants appear to have been most anxious to have the purchasers in possession, as much in their own interests as in that of the purchasers. In addition there was no evidence of what the appellants could or would have done to their benefit if the purchasers had not gone into possession. The Court was invited to assume that the appellants lost material advantages or other opportunities during that period. As with their Lordships, this Court should not be prepared to make such assumptions. This approach accords with that of Lord Robertson in George Whitechurch v Cavanagh [i902] A.C. 117 where he said at page 136 "No-one has sworn or said that thereby the representee

lost money which he would have got if he had not so acted".

The trial judge in his judgment referred to Yovich v Collyer fio72) W.A.R. 143 where Wickham J. gave reasons in which the other

members of the Full Court concurred. In that case the plaintiffs

accepted a contract of sale in reliance upon the representation

of their agent that the purchaser had paid the deposit. Wackham J. referred to a number of Australian cases where the requisite elemen of material disadvantage was noted. One of these was Thompson v

Palmer (1933) 49 C.L.R. 507 and he cited inter alia the following sentence from the judgment of Dixon J.- (as he then was):

"But, 1m each case he is not bound to adhere to the assumptior unless as a result of adopting it as the basis of action or inaction, the other party will have placed himself in a position of material disadvantage if departure from the assumption is permitted".

Wickham J. continued his reasons at page 145 when he said:

"However to make good the estoppel the representee must show a material disadvantage if departure from the assumpticr adduced be permitted and in this respect the Court said in Newbon v City Mutual Life Assurance Ltd (1935) 52 C.L.R.723 at 734 'But what makes it unjust to permit the departure from an assumption so induced 1s that, were 1t permitted, the party so ianduced would through making the assumption find himSelf in a position occasioning material detriment to himself. Without this element there is no estoppel.

It must appear that upon the faith of his belief by act or omission he has placed himself in a position which, if his belief proved incorrect, would be productive of loss'".

Wickham J. made the following comment at page 146 on the

"There the plaintiff farled to show that the receipt of a bonus certificate under an insurance policy, leading him

to believe that the policy was in force, caused him to act

in a way involving material detriment. He did not have

what he thought he had but loss of an apparent benefit is not the same thing as the imposition of a material detriment. This 1s the key to the solution of this case.

When the plaintiffs signed the acceptance they changed their position but not to thelr material detriment".

The decision of Hansen v Marco Engineering (Aust) Pty. Ltd.

[948] V.L.R. 198, a decision of Fullagar J. was cited to us by

counsel for the appellant. That learned judge said at p.211:

"But the insurer in effect invited the insured to leave the whole matter of Hansen's claim to its discretion, and the insured accepted the invitation. Lastly, it could be said that no prejudice is shown to have resulted to the insured from the acceptance of the invitation. But such an argument would, I think misunderstand the nature of the 'acting to prejudice' which is so often mentioned when an estoppel is in question (see e.g. Newbon v City Mutual Life Assurance Society Limited [1935|~53 C.L.R. 723, at pp.733-5). Estoppel is not a cause of action and need not depend on proof of actual damage. Here it may well be, and I think the probability is, that the insured, if 1t had had an opportunity of itself directing the proceedings, would not have achieved a more favourable settlement and would not, refusing to settle, have secured a verdict for a smaller amount than 4,000. But there 1s no certainty about this, and, in my opinion, for the purposes, of an estoppel as distinct from an action for damages, there was sufficient prejudice in being deprived of an opportunity to do better. To put the matter shortly, 1f somewhat loosely, the insured was entitled, if it was not indemnified, to see what it could do for itself. This is the view taken in the United States. In the case already cited of W. Moore Construction Co. Ine. v United States Fidelity & Guarantee Company [1944] 293 N.Y. 119 at p.124, Conway J. quotes with approval a passage

'It is ammaterial whether the plaintiff could or would have compromised the action had it been left free to act, or whether 1t would have achieved any better results had it controlled the defence.'

There 1S much other authority to the same effect, and this view is, I think entirely 1n accord with English principle. In Craine's case, {1920] 28 C.L.R. 305; [1922f 2 A.c. 541,

it was never suggested that actual damage directly resulting from the mere entry into possession had to be proved."

Counsel for the respondent relied upon this passage. In our opinion the statement that proof of actual damage is not necessary cannot be accepted as a principle of general application, in that it appears that it is in conflict with the requirement of "material detriment" as enunciated by the High Court and Privy Council in

the authorities earlier mentioned. As Wickham J. said in Yovich

v Collyer supra at page 147 in commenting upon Hansen v Marco

"It is not of course, necessary to show pecuniary loss but the prejudice must be real". Moreover, 1f it 18 suggested that we should

assess only whether the appellants will suffer an injustice ifa

departure is permitted, the facts of this present matter are at least equivocal. They establish the prospects of benefit to the appellants arising out of the granting of possession and also the fact that the earlier position had been restored by the time of departure from

the assumption. In these circumstances unless the appellants can show that they were still experiencing at' that time material detriment or real prejudice in consequence of having let the respondents into possession it cannot be said that it is unjust

that the respondents be permitted to resile. It follows that the

decisions on this point 1n Hansen v Marco supra and in Craine's case

supra should not be applied to the present facts which are very

different to the facts of these matters. In Craine's case "prejudice' to the representee was not contested at trial (See page 318 per Isaacs

When considering whether the detriment was such that it would be unjust to permit the respondents to resile, significance must be attached to the fact that, after the space of a month or thereabouts, the appellants resumed possession of the premises. The importance

of this factor can be guaged in the light of certain decisions

of the House of Lords. In Tool Metal Manufacturing Co. Ltd. v Tungsten Electric Co. Ltd. [1955] 1 W.L.R. 761 at 763 Viscount

"My Lords, the decision of the Court of Appeal in the

first action was based on nothing else than the principle of equity stated 1n this House in Hughes v Metropolitan Railway Co. and interpreted by Bowen L.J. in Barmingham

and District Land Co. v London and North Western Railway Co.

'It seems to me to amount to this, that 1f persons who have contractual rights against others induce by their conduct those against whom they have such rights to believe that

such rights will either not be enforced or will be kept

in suspense or abeyance for some particular time, those persons will not be allowed by a court of equity to enforce the rights until such time has elapsed, without at all events placing the parties 1n the same position as they were before.'

These last words are important, for they emphasize that the gist of the equity lies in the fact that one party has by his conduct led the other to alter his position. I lay stress on this because I would not have it supposed, particularly in commercial transactions, that mere acts of indulgence are apt to create rights."

In Ajaji v R.T. Briscoe (Wigerza) Ltd. [1964] 1 W.L.R. 1326

Lord Hodson referred to the above statement of the law by the House of Lords, and said at page 1330 on behalf of the Judicial Committee: "This equity is, however, subject to the qualifications (1) that the other party has altered his position (2) that the promisor can resile from his promise on giving reasonable notice, which need not be a formal notice, giving the prom1zsee a reasonable opportunity of resuming

his position (3) the promise only becomes final and arrevocable 1f the promisee cannot resume his position."

Each of these decisions of the House of Lords and Privy

Council related to pleas of promissory estoppel. Counsel for the appellants conceded that the elements of detriment are the same, be the plea of estoppel in pals or promissory estoppel and such

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