Diah (NT) Pty Ltd as Trustee for the Airport Hotel Trust v Darwin International Airport Pty Ltd [2023] NTSC 99

Evidence (National Uniform Legislation) Act 2016 (NT)

Local Court (Civil Procedure) Act 1989 (NT)

Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139; Booth v AN Assessor & Anor [2019] NTSC 89; Briginshaw v Briginshaw [1938] HCA 34; [1938] 60 CLR 336; Charisteas v Charisteas (2021) HCA 29; 273 CLR 289; Collector of Customs v Agfa Gevaert Ltd [1996] 2023 16-18 HCA 36; Crown Melbourne Limited v Cosmopolitan Hotel (Vic) Pty Ltd & Anor [2016] HCA 26; (2016) 260 CLR 1; Darwin International Airport v DIAH (NT) [2012] NTLC 022; Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337; Edyp & Ors v Brazbuild Pty Ltd [2011] NSWCA 218; GetSwift Ltd v Webb [2021] FCAFC 26; (2021) 388 ALR 75; Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1; Johnson v Johnson (2000) 201 CLR [53]; Khul v Zurich Financial Services Australia Ltd [2011] HCA 11; Kostas v HIA Insurance Services Pty Ltd [2010] HCA 3; Oneflare Pty Ltd v Chernih; Osland v Secretary to the Department of Justice [2010] HCA 24; Roy Morgan Research Centre Pty Ltd v Commissioner for State Revenue (Vict) [2001] HCA 49; 207 CLR 72; Tasty Chicks Pty Ltd v Chief Commissioner of State Revenue [2011] HCA 41; Paradis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361; QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15; SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd [2017] NSWCA 132; Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219; South Australian Fire and Emergency Services Commission v Workers Compensation Tribunal [2009] SASC 213; State of NSW v Hunt; Swarbrick v Swarbrick [1964] WAR 106; Walsh v Law Society (NSW) [1999] HCA 33 at [50]; Webb v The Queen [1994] HCA 30; (1994) 181 CLR 41; XCO Pty Ltd v Federal Commissioner of Taxation [1971] HCA 37; 124 CLR 343; referred to.

Text book: Dean Mildren, 'The Appellate Jurisdiction of the Courts in Australia' The Federation Press 2023, 2nd ed

Diah (NT) Pty Ltd as Trustee for the Airport Hotel Trust v Darwin International Airport Pty Ltd [2023] NTSC 99

DIAH (NT) PTY LTD AS TRUSTEE FOR THE AIRPORT HOTEL TRUST

• [1] This is an appeal against a decision of the Local Court granting Darwin International Airport Pty Ltd ('the respondent') a warrant of vacant possession of land leased from it by DIAH (NT) Pty Ltd as Trustee for the Airport Hotel Trust ('the appellant').
• [2] The appeal is brought on 5 grounds, which are set out in the Notice of Appeal filed 26 August 2021. In short form the grounds are:
  1. The learned Local Court Judge erred in concluding the critical conversation regarding the length of the notice did not occur;
  2. The error of law referred to in Ground 1 resulted in the learned Local Court Judge erroneously holding that the Lease was not varied prior to its expiry to provide (inter alia) that the respondent would provide the appellant with plenty of notice, or alternatively reasonable notice, to vacate the leased premises;
  3. The learned Local Court Judge erred as a matter of law by having regard to matters concerning the witness John Robinson which were not the subject of evidence;
  4. The learned Local Court Judge erred as a matter of law by misconstruing the requirement of proof as a promise which was "clear" and "unequivocal" to establish a promissory estoppel, with the quality of evidence required to prove that promise.
  5. The learned Local Court Judge erred as a matter of law in the exercise of his discretion on costs.
• [3] This appeal is limited to a question of law pursuant to s 19(1) of the Local Court (Civil Procedure) Act 1989 (NT).[1] As pointed out by counsel and relevant to this appeal, questions of the sufficiency of evidence to prove a fact,[2] and whether there is sufficient evidence to support an inference,[3] have been held to be questions of law. '[A]lleged insufficiency of evidence to prove a fact always raises a question of law but alleged sufficiency of evidence to the point of conclusiveness cannot, since it assumes that the evidence has been accepted.'[4]
• [4] On the face of it, Ground 1 does not appear to raise a 'question of law', although as will be discussed, the true nature of any error may not be immediately apparent. Ground 2 relies on the alleged 'question of law' in Ground 1. It is appreciated that in some confined circumstances, decisions made during the course of fact finding may raise a 'question of law' or that such a question may be implied.
• [5] In Walsh v Law Society (NSW),[5] McHugh, Kirby and Callinan JJ said 'it is always important, where a process called 'appeal' is involved, to identify the character of the appeal and the duties and powers of the court or tribunal conducting it.' It is not clear from the grounds alone whether a 'question of law' is genuinely raised. This will need to be considered further when dealing with the details of the underlying decisions relevant to the individual grounds.
• [6] An appeal on a 'question of law' is to be distinguished from an appeal from a decision that 'involves a question of law' and an appeal 'on a question of law from a decision of' when reviewing a decision of a tribunal. An appeal that 'involves a question of law' allows the whole decision of the lower court or tribunal to be reviewed and not merely the question of law.[6]
• [7] An appeal 'on a question of law from a decision of' when reviewing a decision of a tribunal has been held to confer original and not appellate jurisdiction.[7]
• [8] The scope of an appeal 'on a question of law' is substantially narrower.[8] However, it may extend to implicit findings, such as what may be involved in a 'no evidence' point.[9] Decisions which are necessary steps in the reasoning process may raise a question of law.[10] An appeal on 'a question of law' excludes mixed questions of fact and law. It extends to both jurisdictional errors and non-jurisdictional errors of law. The Court must be satisfied the error of law vitiated the decision below.[11]
• [9] In the text 'The Appellate Jurisdiction of the Courts in Australia', the learned author (Dean Mildren) states 'As to the distinction between what is an error of law, and what is an error of fact, no satisfactory test of universal application has yet been drawn'.[12]
• [10] Guidance can be taken from Mildren's summary of the consensus derived from authorities which deal with the distinction between a question of law and a question of fact.[13] (footnotes omitted):
  1. In the process of arriving at an ultimate conclusion, a trial judge's first task is to find the primary facts. This often involves the evaluation of witnesses who have given conflicting accounts as to those facts. If the trial judge prefers one account to another, that decision is a question of fact which is not reviewable on appeal, even if the reason given for preferring one witness to another is patently wrong.
  2. The failure of the trial judge to give adequate reasons as to why the evidence of one witness was preferred to the evidence of another witness may be an error in the fact-finding process but it is not an error of law.
     1. Regardless of the trial judge's reasons, if there is evidence which, if believed, would support the finding, there is no error of law.
  3. If there is no evidence to support a finding of fact which is crucial to an ultimate finding of fact that the case fell within the words of a statute, there is an error of law.
  4. Findings of fact which are perverse, or against the evidence or the overwhelming weight of the evidence, or based on reasoning which is demonstrably unsound, are not errors of law.
  5. If there are no primary facts on which a secondary fact could be inferred, and the secondary fact is crucial to an ultimate finding as to whether the case felt within the words of a statute, there is an error of law. If there are primary facts on which a secondary fact might be inferred, there is no error of law.
  6. If there are facts on which an inference might be drawn, there is no error of law. If the inference cannot reasonably be drawn, this is an error of law.
  7. In Collector of Customs v Agfa-Gevaert Ltd the High Court referred, with apparent approval, to the decision of the Federal Court in Collector of Customs v Pozzolanic which identified six general propositions when considering the distinction between questions of fact and questions of law in a statutory context.
• [11] Mildren goes on to comment that common errors of law include a failure to apply a principle correctly, or failure to apply it at all, misinterpretation of a relevant statutory provision or its misapplication, determining a case not brought on the pleadings, relying on inadmissible evidence and failing to accord natural justice to the parties.[14]
• [12] By the Notice of Contention, the respondent informed the Court that it does not seek to cross-appeal but contends that the judgment of the Local Court should be affirmed on grounds other than those relied on by the Local Court, should the appeal be allowed in part. The respondent submitted that if it is here concluded the Local Court should not have rejected that the words "... [I]f any changes we'll give you plenty of notice to remove the improvements" were said, the appeal should in any event fail as the words lacked the quality of a contractual promise and could not give rise to any variation of the lease or collateral contract. Alternatively, it is argued that the notice given in any event constituted 'plenty of notice'. Further, the respondent argued the words were so vague and imprecise as to be incapable of providing notice beyond the terms of the lease and the Notice to Quit and Vacate could not give rise to actionable estoppel.

• [13] The respondent (applicant in the Local Court proceedings) subleased property ('the premises') within the airport precinct to the appellant (respondent in the Local Court). The appellant installed a large number of demountable buildings which were used for the purposes of commercial accommodation, including over 200 housing rooms, laundries, gym and other amenity buildings. It is accepted here, as the Court below accepted, that both parties were aware of the significant time and cost required to dismantle and remove these installations.[15]
• [14] The sublease was entered into for a term of two years commencing on 1 July 2015 and was due to expire on 30 June 2017 under the terms of a written sublease executed on behalf of both parties 'the lease'. The appellant is referred to as the 'User' in the lease and respondent as the 'Operator'. Relevant Clauses of the lease include the following:

If the User continues to occupy the Premises after the Expiry Date with the Operator's express approval, the User does so as a monthly tenant under a new Sublease which will be on substantially the same terms as this Sublease as at the Expiry Date (amended as required so they are applicable to a monthly tenancy, but the Security Amount as at the Expiry Date will not be reduced):

(a) at a rent to be determined by the Operator; and

(b) which the Operator or the User may end by giving one month's written notice to the other ending on any day.

This Sublease constitutes the entire agreement concerning the Premises between the User and the Operator. Any previous agreements, understandings, representations and negotiations prior to entering into this Sublease have no effect and this Sublease can only be amended by an instrument in writing and signed by both parties.

• [15] In January 2017, the parties discussed a suspension of rent payments due under the lease. The Judge referred to the occupancy rate which fell below its expectations as the reason the appellant sought a suspension of rent payments due under the lease.[16] In June 2017 the parties agreed on changes to the lease, described by the appellant to facilitate 'mothballing' of the premises. Along with other changes it was agreed the appellant would no longer pay a fixed rent but instead pay 5% of turnover of income received from occupants of the accommodation from time to time, plus various outgoings.[17]
• [16] On 11 January 2021, the respondent sent the appellant a letter purporting to terminate the lease in accordance with Clause 3.2, and requested vacant possession by 12 March 2021. Subsequently, on 12 February 2021, the respondent served the appellant with a Notice to Quit and Vacate the premises by 12 March 2021.
• [17] Counsel for the respondent drew attention to the definition 'Expiry Date', which for the purposes of Clause 3.2 was 30 June 2017.[18]
• [18] The Lease also relevantly:
  1. provided an option to renew for an additional three (3) one (1) year terms, which option was not exercised.[19]
  2. required the appellant to deliver up vacant possession of the premises (subject to any improvements the respondent wished to retain)[20] on the Expiry Date;[21] and, as above,
  3. required any variation of the same to be reduced to writing and signed by both parties.[22]
• [19] The respondent pointed out that further to Clause 3.2(a) in June 2017, it agreed to allow the appellant to remain in occupation on the basis of the revised rental arrangement. It was agreed that in respect of any period that the appellant did not have a rent paying tenant, the appellant would not pay rent but would pay outgoings only. Further, when the appellant did have a rent paying tenant, the appellant would pay outgoings plus 5% of rental received. While that revised rental arrangement was never formally reduced to writing, the respondent acknowledged that after that agreement, the appellant paid the invoices predicated upon the same. Numerous invoices were before the Local Court and are available on this file.
• [20] The respondent's case is that the terms of the lease, other than those in respect of the rent, continued in effect throughout the period of the appellant's continuing occupation.
• [21] The appellant's case is that as well as the changes to rent, there was also a discussion of the notice to be given to the appellant on the removal of the buildings and improvements from the premises. John Robinson, who swore an affidavit on behalf of the appellant, said Mr Ian Kew, a representative of the respondent told him "If anything changes we'll give you plenty of notice to remove the improvements".[23]
• [22] The Judge noted the appellant's occupation of the premises continued beyond the lease Expiry Date of 30 June 2017, with no evidence of any additional agreement reached other than an attempt to draw a new lease document, which was never finalised or signed by the parties.[24] His Honour also recognised on the basis of evidence of negotiations, discussions and communication between the parties between January 2017 - June 2017 there was an agreement to vary the terms of payment of rent under the lease.[25]
• [23] The Judge also referred to the arrangement for the appellant's occupation of the premises after June 2017 to continue until the respondent stated by letter of 11 January 2021,[26] that the respondent was terminating 'the monthly tenancy' and that the respondent required the premises be vacated by 12 March 2021. The letter was served as notice of the termination. A formal Notice to Quit and Vacate Premises[27] dated 12 February 2021 was served on the appellant. The Notice to Quit and Vacate Premises stated that the lease had expired and that the appellant occupied the premises pursuant to clause 3.2, set out above. The Notice to Quit and Vacate Premises required the appellant to vacate the premises within one month of its service and required the removal of all chattels, plant and equipment. The appellant did not comply with the demand to remove the chattels, plant and equipment within the month.
• [24] The respondent commenced proceedings in the Local Court on 23 March 2021. The appellant commenced removal of the accommodation facility which continued until September 2021.

• [25] At the heart of the arguments on appeal was the Judge's treatment of the evidence of Mr Robinson. Mr Robinson's affidavit was admitted at the hearing. He was not cross-examined, although he was available to be cross-examined, should the respondent have required. His affidavit contained the only evidence of the conversation which on the appellant's case altered the notice requirements of the lease. Mr Kew's evidence set out in his affidavit, which was before the Local Court for an interlocutory proceeding, was merely that he could not recall if the conversation had taken place.
• [26] The appellant contends the Local Court Judge wrongly concluded that this critical conversation did not occur.[28] As discussed above it is not clear that such a purported error on its face raises a 'question of law'. The appellant also submitted that the Judge required an excessive level of persuasion that was inappropriate to the nature of the case, and that his Honour misconceived his role in deciding whether there was sufficient basis in the evidence to reach the conclusion that the words concerning notice had been spoken by Mr Kew.
• [27] It was acknowledged in the reasons below that the respondent did not positively deny the evidence of Mr Robinson,[29] and that Mr Robinson was not cross-examined on the reliability of his recollection.[30] The affidavit of Mr Kew was not admitted as evidence in the hearing itself, but was before the Local Court only during an interlocutory application.[31]
• [28] The Judge disregarded the evidence of Mr Robinson entirely on this decisive point. His Honour said this was due to the passage of time since the alleged conversation and because of a lack of a contemporaneous record of the conversation.[32] The Judge concluded:

[59] I am satisfied that I cannot determine the subject or significance of this exchange and I disregard it for the purposes of these Reasons for Decision.

[60] I am satisfied and I find that no record of any negotiation or discussion or agreement between the parties over the period January 2017 to 30 June 2017 as to notice to remove the improvements or notice to quit the premises ever existed.

• [29] There is further discussion of Mr Robinson's evidence at [63]-[71]. The primary determination was that ultimately the Judge was not satisfied that the conversation had occurred. At [70] of the reasons his Honour stated:

Mr Robinson did not attend to give evidence before me. Accordingly, he was not cross-examined on the reliability of his recollection... This was with the consent of the parties and I draw no adverse inference in respect of Mr Robinson or his credibility because of this. However, it means that I am left with only the brief and unexplored evidence in those few lines of that affidavit to determine a question of the greatest gravity in these proceedings.

• [30] The appellant submits that the Local Court Judge misapplied Jones v Dunkel[33] and Browne v Dunn[34] and erroneously reasoned that it was for the appellant to otherwise prove the unchallenged evidence of Mr Robinson. Mr Kew was not called to give evidence, nor did the respondent opt to cross-examine Mr Robinson on his recollection, both of which were options open to the respondent to dispute the statement which was conveyed by Mr Robinson. The inference raised in Jones v Dunkel was not alive in such circumstances, so there was no need for his Honour to mention that an adverse inference was not drawn on the basis of lack of cross-examination. Naturally the appellant should not have been subject to an inference against its case due to the lack of cross-examination of Mr Robinson. If anything, the absence of any positive denial from Mr Kew could have supported an inference in favour of Mr Robinson's evidence. The conversation was not denied by Mr Kew.
• [31] The rule in Jones v Dunkel operates where there is an unexplained failure by a party to give evidence or call witnesses or adduce other evidence. In some cases it may lead to an inference that the potential evidence which was not called would not have assisted the party. Even in appropriate circumstances, the Court is not bound to draw the adverse inference. No adverse inference was stated to be drawn. The Judge did not need to mention the potential for such an inference, however the reasoning tends to show, as submitted on behalf of the appellant, that it was for the appellant to otherwise prove the unchallenged evidence of Mr Robinson. If all that was meant was that his Honour could not be satisfied on the basis of the evidence of Mr Robinson, there could be no cause for complaint, however the implication at least is that the evidence would have potentially been satisfactory if he had been cross-examined, or tested, or possibly if other evidence was called. Cross examination of Mr Robinson was not an option available to the appellant. That was an option open only to the respondent.
• [32] It was never put to Mr Robinson that what was in his statement was incorrect, or did not happen, and he was given no opportunity to answer any criticism that may have been raised by virtue of the passage of time. The Judge reached that conclusion through his own reasoning.
• [33] Although breach of the rule in Browne v Dunn was not raised as a separate ground of appeal, appeal ground 1.3 raises the point that Mr Robinson was not cross-examined on the reliability of his recollection that the words were spoken. Both counsel addressed this issue in written and oral submissions. I proceed on the basis that Brown v Dunne, or a breach of procedural fairness has been raised sufficiently to form part of appeal ground 1.3.
• [34] It is accepted here, as counsel for the respondent submitted, that the mere fact that a witness is not cross-examined will not prevent a party from asserting that the evidence is in contest when that fact is made clear either in the lead up to proceedings or in the conduct of a party's case.[35] The rule is satisfied where the opposing party and their witnesses plainly know the nature of the opposition case to be met.[36]
• [35] In Oneflare Pty Ltd v Chernih,[37] the appellants argued they had been denied procedural fairness. In that instance the Court of Appeal (NSW) rejected that any breach had taken place. The Court emphasized that the crux of Browne v Dunn is that the witness must have been given 'full notice beforehand that it is intended to impeach the credibility of the story he is telling'. In Oneflare it was concluded that the affidavit evidence exchanged before the hearing, the parties' opening statements and the cross-examination of each of the directors made plain that the truthfulness of their evidence was under challenge.
• [36] In State of NSW v Hunt,[38] the trial Judge found for the plaintiff in circumstances where the defendant was vicariously liable for the conduct of its employee, a police officer. The officer, according to the trial Judge, had completely fabricated his evidence in a number of particulars. This allegation had not however, been put to the officer.[39] Citing Khul v Zurich Financial Services Australia Ltd[40] the Court of Appeal emphasized at [32] that two conditions needed to be satisfied before such a finding could be made: first, reasons must be given for concluding that the truth has not been told. Second, the witness must have been given an opportunity to answer the criticism. It was held at [38] that the second condition was not satisfied.
• [37] Counsel for the appellant drew attention to Kuhl v Zurich Financial Services Australia,[41] particularly at [67] where Heydon, Crennan and Bell JJ stated:

It is not sound judicial technique to criticise a party witness, for deliberately withholding the truth in a fashion crucial to the dismissal of that party's claim unless two conditions are satisfied. First, reasons must be given for concluding that the truth has been deliberately withheld. Secondly, the party-witness must have been given an opportunity to deal with the criticism.

• [38] It is not clear that notice was given in the sense suggested by the cases that Mr Robinson's evidence would be impeached on the grounds of unreliability. Unreliability was a criticism of his evidence which he was not given an opportunity to meet. His evidence was rejected both on the basis of unreliability and because there were no contemporaneous records of the conversation.
• [39] The material relied on by the respondent at the commencement of the hearing in the Local Court and throughout the hearing is not so clear as to constitute notice that the material part of Mr Robinson's evidence would be rejected as unreliable.
• [40] Under the heading 'Negotiations and Verbal Agreement' Mr Robinson's affidavit of 14 April 2021 sets out the meetings he attended and annexes the documents, principally email threads relevant to the rent variation, between May and July 2017.[42] At paragraph [10] the invoice process is set out for monthly rent and outgoings. At paragraph [9], the relevant conversation and why it took place is set out:
  1. In about June 2017, I spoke by phone with Ian Kew, who was at the time the Chief Executive of NT airports. I cannot recall whether I called him or whether he called me, however at the outset of the call one of us, said that the purpose of the call was to work out the basis of DIAH's ongoing occupation of the premises (ie following on from some of the emails I have referred to above). In the course of that conversation, an exchange took place as follows:

9.1 I said words to the effect of "we don't have any forward bookings and we have significant rental arrears with DIA. I thought I might be able to do a deal with JKC but not until later in the year".

9.2 Ian said words to the effect of "Yes, you've been a good rent paying tenant at the Darwin Airport Resort, Darwin Airport Inn and Darwin Airport Lodge since 2004. I can agree to invoice only outgoings until you find a client."

9.2.2 "We don't have any plans for the land and as long as you cover so there was no cost to us, I'm happy to agree to 5% of the turnover when you find another client."

9.3 "If anything changes we'll give you plenty of notice to remove the improvements."

9.4 I said words to the effect of "Alright thanks."

• [41] As above, Mr Kew's affidavit was not before the Local Court at the hearing proper. It was before the Local Court for an application for summary dismissal. It cannot be relied on for substantive matters, however it would not have signalled to the appellant that his account of the conversation was to be rejected on the basis of unreliability. Potentially it signalled the opposite. When counsel for the respondent outlined the case to the Judge he said:[43]

We're proceedings on the basis that even if my friend makes out every objection so that your Honour doesn't necessarily hear evidence about what the practice of Mr Kew or Mr Baynes may have been, and your Honour may get to the position of finding, depending on the view you take of Mr Robinson, that it is likely these words were said; you still get to the legal argument.

We can't assume for the purposes of this application that there's going to be evidence led that's not already before the Court and leave would be required, about - well, prejudice isn't even relevant because we say that notwithstanding there's an attempt to introduce the onerous costs of having to comply with the obligation, the fundamental problem is we're entitled to rely on the obligation. So, it doesn't assist my friend. The short answer is no, your Honour. There's no additional evidence. You'll have to proceed on the basis of what's before you.

• [42] Although the affidavit of Ross Baynes of 28 April 2021 outlines the procedures which would usually apply to the administration of the lease and at [15] states that at no stage did Mr Kew tell him to action an amendment to the notice period, there is no evidence one way or the other about the conversation between Kew and Robinson. That is no criticism of the respondent's case. Mr Baynes was not present. Mr Kew was not called.
• [43] In my view there was clear error by the rejection of the evidence of Mr Robinson on the basis of lack of reliability due to the passage of time, without Mr Robinson being given an opportunity to address the issue through cross-examination. It was not clear his reliability would be under challenge, by virtue of the passing of time. The New South Wales Court of Appeal decision in SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd[44] is a reminder that the parties to litigation cannot by agreement (even though a court may have acquiesced) authorise a course which denies elementary procedural fairness to a witness.
• [44] That is what occurred here, whether the error is treated as a breach of the rule in Browne v Dunn or a breach derived from the need to accord procedural fairness. This was decisive evidence and to reject it required that the witness party be given an opportunity to deal with the criticism. Although there was other evidence which might form the basis of an inference against the appellant's case, clearly the ultimate conclusion based solely on that strand of circumstantial evidence must be in error if such significant evidence is wrongly omitted from consideration. While it is the case that his Honour was not bound to accept the evidence, to exclude it from consideration required that the witness be afforded procedural fairness. The reasons acknowledge the evidence had capacity to exclude the Notice Clause. The question of law is whether the Local Court was in error to disregard Mr Robinson's evidence as unreliable without giving him an opportunity to answer such a criticism.
• [45] The Judge noted the importance of Mr Robinson's evidence. He regarded those words of 'fundamental importance.'[45] His Honour stated it was the only evidence before him of any changed agreement as to notice of any sort after 30 June 2017 and was the only evidence capable of displacing the continued operation of clause 3.2 as a term of that ongoing lease arrangement. At [65] his Honour stated:

Because of this, I must consider this evidence and its context with particular care to determine whether it is sufficiently cogent and persuasive to satisfy me on the balance of probabilities that these words or similar words having the same import were spoken, and were intended by the speaker to be a term of an agreement between the parties. In this regard I note the famous obiter dictum remarks of Dixon J in Briginshaw v Briginshaw[46] as follows:

'...when the law requires proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence... It cannot be found as a result of a mere mechanical comparison of probabilities.'

• [46] His Honour went on to say this is reflected in s 140 of the Evidence (National Uniform Legislation) Act (NT) as follows:

(1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.

(2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:

(a) the nature of the cause of action or defence; and

(b) the nature of the subject-matter of the proceeding; and

• [47] This was not a case which would ordinarily involve an enhanced burden of proof as is at times required by Briginshaw, which is usually reserved for the proof of serious allegations. However, I do not agree his Honour has treated the evidence in that way. This part of the reasons is simply referencing the significance of the evidence. While it was to be treated with care, such care included utilising the rules of procedural fairness, as discussed already which are owed to a party witness.
• [48] With reference to appeal ground 3, the Judge stated to have knowledge of Mr Robinson from '40 years spent in Darwin'. This is apparent from paragraph [45] of the Reasons where after detailing email correspondence between the parties in which Mr Robinson was referred to as 'Foxy' Robinson, his Honour said:

[45] I know of my own knowledge after nearly 40 years in Darwin that John Robinson is widely known as "Foxy" Robinson, I believe because his hair was red.

• [49] The appellant submits that this reference makes it apparent that the Local Court Judge had regard to matters not the subject of evidence, which were not matters which could permissibly be taken into account as judicial notice. The appellant contends that the significance of Mr Robinson's nickname is not the essence of the issue, but rather that this reference exposes the impermissible reasoning of the Local Court Judge. It was put that the criticism of Mr Robinson's credibility from the minimal evidence before his Honour, coupled with this reference could foreseeably cause the hypothetical lay observer to question the decision making process. It appears that the parties were not aware of the Judge's knowledge of Mr Robinson prior to the publication of Reasons. It might be expected that the parties be made aware of what personal attributes the Local Court Judge may have knowledge of regarding the witness. It is accepted a Court cannot go outside of the evidence presented to it[47] and act on information privately obtained unless it first complies with s 144 of the Evidence (National Uniform Legislation) Act (NT) 2016.
• [50] It is difficult to know what to make of that part of the reasons. It is likely to have simply meant his Honour knew of Mr Robinson in terms of his public persona which may have included the reason for his nickname. From that knowledge his Honour may have satisfied himself that the person referred to in the email chain at annexure RB13[48] was in fact Mr Robinson, referred to in the email chain as 'Foxy'. It is unlikely in my view to have been of influence on the decision making but it cannot be assumed here that the hypothetical bystander would agree with that conclusion.
• [51] It is clear this is not a case of actual bias but ground 3 requires an examination of perceived bias. The test for apprehended bias is whether 'a fair minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the question the judge is required to decide'.[49]
• [52] The term 'impartial mind' underlines or illustrates the point that the law with respect to apprehended bias is concerned with avoiding an apprehension of 'prejudice, partiality or prejudgment.'[50]
• [53] The rationale for the rule is not based on the Court's own assessment of the circumstances giving rise to the apprehension of bias, nor how this Court assesses the circumstances. The legal test is whether a member of the public would apprehend a lack of impartiality. In Charisteas v Charisteas the High Court stated at [21]:

[t]he hypothetical observer is a standard by which the courts address what may appear to the public served by the courts to be a departure from standards of impartiality and independence which are essential to the maintenance of public conference in the judicial system.

• [54] As above, I do not think his Honour's expression affected the outcome, however the current law supports the position that my own assessment is irrelevant. Gleeson CJ, McHugh, Gummow and Hayne JJ made clear in Ebner at [7], the test does not require any conclusion 'about what factors actually influenced the outcome. The test concerns whether the fair minded lay observer might reasonably think that the judge might be biased.[51] It is a question of possibility, not probability.[52]
• [55] A two-step determination is required.[53] First, there must be identification of what might lead a judge to decide a case other than on its merits. Second, there must be a logical connection between that matter and the apprehension that the judge may not determine the matter on the merits.
• [56] As to the first part, it is submitted his Honour brought to bear undisclosed knowledge outside of the evidence of the appellant's nickname to the proceedings and as to the second, this knowledge of the appellant which was undisclosed was possibly brought to bear on the finding of unreliability.
• [57] As to what a fair minded lay observer might think in these circumstances, guidance may be taken from Kirby J in Johnson v Johnson:[54]

Such a person is not a lawyer. Yet neither is he or she a person wholly uninformed and uninstructed about the law in general or the issue to be decided. Being reasonable and fair minded, the bystander, before making a decision important to the parties and the community, would ordinarily be taken to have sought to be informed on at least the most basic considerations relevant to arriving at a conclusion founded on a fair understanding of all the relevant circumstances.

• [58] The hypothetical observer cannot be taken to have specialist knowledge or understanding of the legal profession,[55] nor to attribute complete faith in judges to put out of their minds, irrelevant or prejudicial material once exposed to it.[56]
• [59] In QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs[57] the High Court said the hypothetical fair-minded lay observer, is to be placed in a contemporary setting and that 'Uncritical attitudes of the past cannot be assumed to be those of the present.'[58] Although the facts of QYFM are markedly different from those here, the High Court's observations on the fair minded lay observer have some relevance (footnotes omitted):

Being "fair-minded", the observer "is neither complacent nor unduly sensitive or suspicious". Yet the observer is cognisant of "human frailty" and is all too aware of the reality that the judge is human. The observer understands that "information [as well as attitudes] consciously and conscientiously discarded might still sometimes have a subconscious effect on even the most professional of decision-making".

Being "lay", the observer "is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge". Though the observer may be taken to understand that the judge, by reason of professional training and experience and fidelity to the judicial oath or affirmation, will have a greater capacity than most to discard "the irrelevant, the immaterial and the prejudicial" and to discharge the judicial function uninfluenced by past professional relationships, "the public perception of the judiciary is not advanced by attributing to the lay observer a knowledge of the law and an awareness of the judicial process that ordinary experience suggests not to be the case".

Nor is the observer so abstracted and dispassionate as to be insensitive to the impression that the circumstances in issue might reasonably create in the mind of the actual party who is asserting an apprehension of bias.

• [60] The totality of circumstances here, including how the observer would not be insensitive to the impression that the circumstances might reasonably create in the mind of the appellant lead to the conclusion there existed, at the time of the reasons being published, a reasonable apprehension that the question of reliability would not be dealt with impartially. Ground 3 has been made out.
• [61] The appellant submits that the errors contained in appeal grounds 1 and 3 resulted in the Local Court Judge erroneously holding that the Lease was not varied prior to its expiry to provide that the respondent would provide the appellant with plenty of notice, or alternatively reasonable notice, to vacate the leased premises.
• [62] I will allow ground 1 (in part) and ground 3, however that is not the end of the matter. The next question is what the findings should be as a result of this ruling. Had this matter not been a case of enforcing vacant possession which, the Court was told was provided by the appellant in September 2021, it may have been appropriate to remit the matter to the Local Court. Neither party sought such an order during or since the hearing of the appeal.
• [63] After reviewing the material, I find on the balance of probabilities, without any evidence to the contrary or criticism of Mr Robinson's evidence on the basis of an unreliability never suggested to him, that it is more likely than not that Mr Kew said words to the effect of 'if anything changes we'll give you plenty of notice to remove the improvements'. Even though it was not reduced to writing, the statement was made at around the time of the discussions about variation to rent and other exchanges between the parties required to effectively 'mothball' the equipment on the premises. The word 'mothball' was not used before the Local Court but the idea conveyed by that term was.
• [64] If it is accepted this phrase was said, it can be taken that the lease was varied to require either 'plenty' or 'reasonable notice'. Alternatively, a collateral contract was concluded which operated from the expiry date of 30 June 2017 until reasonable notice was given. The parties performed their respective obligations consistent with a new arrangement throughout that period which is a reasonably significant time.
• [65] The respondent points out that reasonable notice has not been quantified or defined further in this matter.[59] However, it was accepted that both parties were aware of the significant time and cost required to dismantle and remove these installations.[60] It can be inferred in the circumstances that reasonable notice must be viewed objectively and by the parties as longer than the one or two month period contained in clause 3.2 of the lease given the knowledge they had of the enterprise.[61] The words used should not be seen in a vacuum. The words were said in the context of the knowledge both parties had about the time and costs involved in removing the equipment and the ongoing agreement about the continued use of the premises. As to whether the appellant ever intended to comply with the original terms, it must also be remembered there had been changes in the circumstances, over the life of the sub-lease and its variation, including the number of buildings or installations.
• [66] The respondent contends that the other evidence before the Local Court supports the conclusion that the statement which was under question is not capable of varying the lease. It is put that this is primarily supported by the evidence of Mr Ross Baynes that:

(a) He was the person responsible for actioning any amendments to leasing arrangements on behalf of the Respondent;[62]

(b) Any discussions concerning proposed changes were usually followed up in writing;[63]

(c) Mr Kew had not informed him of any need to amend the lease to reflect a change in the notice period;[64]

(d) There were several emails between Mr Baynes and Ms Ainslie Maclean and Mr Robinson which contained no reference to a change of the notice period.

• [67] The respondent's case is that the comments attributed to Mr Kew were so vague, imprecise and incapable of meaning that they lack the quality of a contractual promise and could not result in any variation of the terms of the lease. It was submitted it was essentially impossible to quantify the time intended by each party, and in the absence of any specific evidence in that regard, it is difficult to bind a party by such a statement.
• [68] A sketch of the original sub-lease is somewhat useful in the context of determining how it was anticipated by the parties that it would regulate their activities, rights and responsibilities.
• [69] Item 3 of the Reference Schedule provides the Commencement Date: 1 July 2015.[65] Item 4 of the Reference Schedule provides the Expiry date: 30 June 2017.[66] Item 5 provides the term is 2 years. The premises are described at Item 6 which cross references to the map of the premises.[67] Item 7 is an option to renew, three further terms of one year for each term. Rent is set at $323,000 per annum plus GST.[68]
• [70] Item 13 covers the permitted use of the premises for short-term accommodation comprising 212 rooms.[69] The Court was told that at the time the lease was entered into, there was one building on the premises. Further, that the appellant would undertake works to bring it up to standard for the purpose of a commercial enterprise. Various types of buildings were permitted.[70] All improvements made subsequently to the entry of the lease came within the definition of property on the premises, when such property was not the Operator's property.[71]
• [71] The reference schedule[72] provides 'The user must operate the user's business on the premises during the term with due diligence, efficiently, and in a proper and business manner'. Further at 11.2 the lease provides the user must maintain and keep the Premises in good and substantial condition working order and condition of repair, or replace them when necessary.[73] The Operator has the right to inspect and require the user (the appellant) to rectify defects in the user's work. It is the user who must ensure statutory requirements, the certificate of occupancy and awareness of prohibition and lawful orders and restrictions.[74] If a building is damaged or destroyed, there may be a reduction of rent.[75]
• [72] The respondent points out that at the time of executing the lease, the appellant knew it might be required to devolve itself of any interest in the property.
• [73] Given the detailed provisions of the written lease, it was submitted not only was the Local Court not bound to accept the subject evidence, but that the phrase reported by Mr Robinson lacked sufficient clarity to amount to a variation of the Notice Terms and did not have the quality of a contractual promise as understood from Crown Melbourne Limited v Cosmopolitan Hotel (Vic) Pty Ltd & Anor.[76]
• [74] The phrase under scrutiny here and the particular context in which it was said was markedly different from the circumstances the High Court was presented with in Crown. In Crown, at the end of a five year detailed lease it was argued that the words 'we will look after you at renewal time' created an estoppel. It was found the term was so vague, imprecise and incapable of meaning that it necessarily lacked the quality of a contractual promise and could not result in a variation of the lease.[77] Here the conduct of the parties provides greater context which gives meaning to the term articulated by Mr Kew bearing in mind the phrase was not contradicted by any other evidence. The term was more than 'vaguely encouraging' which was the characterisation of the term considered in Crown.
• [75] Once Mr Robinson's sworn evidence is accepted and given the context of ongoing understandings about changes to rent it is clear in my view the lease was varied, or a collateral contract concluded to cater to the mutual benefit of both parties, so that the property remained occupied albeit on somewhat different terms as originally agreed. There had already been the variation of rent, albeit confirmed in email correspondence and the ongoing commercial relationship went beyond what was originally provided in the lease. The detail in the original lease is intractably neutral and little can be drawn from it to cater to the changed circumstances.
• [76] It seems reasonable that in the circumstances known to both parties and accepted by the Court below that some consideration would be given to what would occur when the arrangement came to an end to permit the appellant to leave the premises in a way to avoid a substantial commercial impost. Such a consequence was the motivation for the variation of rental terms. Effectively, there was an agreement to 'mothball', for want of a better term, which had potential adverse consequences known to the parties, especially the eventual cost associated with moving. In such circumstances, given the commercial purposes known to the parties at all stages and the reason for the variation to rent which continued over the relevant period, this is a situation where the context of external events is relevant to construction of the contract. In this instance such a consideration allows a finding that the conversation between Mr Kew and Mr Robinson anticipated at least reasonable notice in all of the circumstances. Here reliance is placed on Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd[78] (footnotes omitted):

However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where the task is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating". It may be necessary in determining the proper construction where there is a constructional choice. The question whether events, circumstances and things external to the contract may be resorted to, in order to identify the existence of a constructional choice, does not arise in these appeals.

• [77] In the circumstances here, the agreement for 'plenty' of notice which could be considered 'reasonable in all of the circumstances' was a necessary addition to facilitate the initial variation undertaken between the parties to 'mothball' the infrastructure for some time and to achieve the commercial purpose. There was a new lease arrangement entered into to 'mothball' the facility on and from 1 July 2017 such that the one month's notice to vacate or two month's notice to vacate and remove the property no longer operated. Bearing in mind the size and cost of the venture to sell and remove the infrastructure, it was reasonable to expect more than two months' notice. This is despite Clause 29.1 requiring signed variations in writing. Such a clause is not always determinative.
• [78] I will allow ground 2.

• [79] I do not agree this is a case establishing promissory estoppel.
• [80] In Deveraux v Cash (No 2) Grant CJ helpfully set out the 6 elements that must be proven in order to establish promissory estoppel. The primary elements referred to by the Local Court Judge below are that a party must have made a promise which induced the other party to adopt an assumption or expectation, and that the promise made by the first party was intended to be acted upon.
• [81] Although if seen in context, the phrase used by Mr Kew was clear enough to establish the requirement of reasonable notice, a number of the remaining estoppel elements are not made out. There is no inducement shown in relevant sense. Further, and most clearly, detrimental reliance has not been shown. The appellant had the benefit of the varied lease for some four years. The appellant acted in accordance with the representations he understood were made. There is nothing to indicate the appellant would have behaved differently without the oral clause granting reasonable notice. I would not uphold the estoppel ground, which is ground four. Although the Notice to Quit and Vacate was not reasonable and unfortunately triggered litigation, there was no detriment shown in the sense that it was shown the appellant would not have entered into the varied agreement at the time without negotiating further terms. There was no evidence of detrimental reliance.

• [82] The final ground raised by the appellant is that the Local Court Judge made an error in the exercise of the discretion on costs. In paragraphs [84] and [85] of the Reasons, the Local Court Judge ordered that the appellant pay the respondent's costs as his Honour was not satisfied that there was any reason to "change the usual position that costs should follow the event."[79]
• [83] The appellant submits that the error arose by the Local Court Judge failing to have any proper regard to the futility of the proceedings, in particular the futility of having a trial of the application for possession where the appellant had substantially removed its property from the premises, was not refusing to remove the balance and handover of the premises which was likely to be within a short time.[80] The appellant submits that the Local Court Judge should have held that the respondent was not entitled to the costs of the hearing, other than for the failed interlocutory application for summary dismissal.[81] This submission is founded on the position that the appellant had indicated it intended to vacate and surrender possession of the premises, and was in the process of doing so, which was likely to be completed closely following the hearing date.[82]
• [84] On the facts found by his Honour, it cannot be said his Honour exercised the discretion inappropriately. His Honour relied on his findings and noted there was not vacant possession as at 3 August 2021. There is no error of law relevant to the costs ground. This ground relies on an interpretation of letters setting out reasons why the action should not have been brought or should have been withdrawn.[83] It is quintessentially an issue of fact. However, the issue of costs may be considered a fresh as a result of this appeal. The Court will hear the parties on costs with respect to this appeal and in the context of costs of the appeal, there appears to be no barrier to raise the issue of costs below. However, no order will be made vacating the Local Court costs order under this ground.
• [85] As the warrant of possession was issued and I understand from the material to some extent was complied with, the warrant will not be set aside.
• [86] The Orders are as follows:
  1. Grounds 1 (in part), 2 and 3 are upheld and the appeal is allowed in part.
  2. The Notice of Contention is dismissed in part, save on the issue of estoppel.
  3. The Court will hear any party on the question of costs. Any application for costs is to be made in writing within one month after the receipt of these reasons. A reply may be made in response to a costs application within one month of receiving any application. The parties have liberty to apply with respect to that time line by contacting my chambers. Alternatively, the parties may file any proposed consent order as to costs.
  4. By arrangement these reasons and orders will be forwarded by email to counsel.[84]

[1] Section 19(1) of Local Court (Civil Procedure) Act 1989 (NT) relevantly provides a party may appeal to this Court: 'on a question of law, from a final order of the Court in the proceedings.'

[2] South Australian Fire and Emergency Services Commission v Workers Compensation Tribunal [2009] SASC 213.

[3] Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1.

[4] Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156, cited with approval in South Australian Fire and Emergency Services Commission v Workers Compensation Tribunal and Another [2009] SASC 213 (Kourakis J).

[5] [1999] HCA 33 at [50].

[6] XCO Pty Ltd v Federal Commissioner of Taxation [1971] HCA 37; 124 CLR 343 at [10]; Ruamah Property Co Ltd v Federal Commissioner of Taxation [1928] HCA 22; 41 CLR 148 at 151.

[7] Osland v Secretary to the Department of Justice [2010] HCA 24; Roy Morgan Research Centre Pty Ltd v Commissioner for State Revenue (Vict) [2001] HCA 49; 207 CLR 72 at [15]; Tasty Chicks Pty Ltd v Chief Commissioner of State Revenue [2011] HCA 41 at [5].

[8] Paradis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361 at [53]; Booth v An Assessor & Anor, [2019] NTSC 89 at [33] - [34] Grant CJ.

[9] Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32 at [89] per French CJ; Edyp & Ors v Brazbuild Pty Ltd [2011] NSWCA 218 at [24] Allsop P.

[10] Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32 at [23] French CJ.

[11] Booth v AN Assessor & Anor [2019] NTSC 89 [34] Grant CJ.

[12] Dean Mildren, 'The Appellate Jurisdiction of the Courts in Australia' The Federation Press, 2023, 2nd ed at 17, citing Collector of Customs v Agfa Gevaert Ltd [1996] 2023 16-18 HCA 36; 186 CLR 389.

[15] Darwin International Airport v DIAH (NT) [2012] NTLC 022 at [41] ('the Reasons').

[18] Definition of the term "Expiry Date" at clause 1 of the Lease (AB at186) and Item 4 of the reference Schedule, AB at 176.

[19] Clause 3.3 AB at 192 and Item 7 of the Reference Schedule at AB 176.

[23] Affidavit of John Robinson, Affirmed 14 April 2021, [6]-[11] Local Court, Exhibit R9.

[33] [1959] HCA 8; (1959) 101 CLR 298 ('Jones v Dunkel').

[35] Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219 per Mahaney at 236.

[36] Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1 at 16.

[37] [2017] NSWCA 195.

[38] [2014] NSWCA 47; (2014) 86 NSWLR 226.

[39] Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) CLR 361.

[40] [2011] HCA 11; (2011) CLR 361.

[41] [2011] HCA 11; (2011) 243 CLR 361.

[43] Local Court Transcript, 3 August 2021 at 20; AB 327.

[44] [2017] NSWCA 132.

[46] [1938] HCA 34; [1938] 60 CLR 336 at page 362.

[47] Swarbrick v Swarbrick [1964] WAR 106.

[49] Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at [6]; Charisteas v Charisteas (2021) HCA 29; 273 CLR 289.

[50] Webb v The Queen [1994] HCA 30; (1994) 181 CLR 41 at 74.

[51] Webb v The Queen [1994] HCA 30; (1994) 181 CLR 41, 67; Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at [30], [33].

[52] Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at [7].

[53] Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at [8].

[55] Charisteas v Charisteas [2021] HCA 29; 273 CLR 289 at [21].

[56] GetSwift Ltd v Webb [2021] FCAFC 26; (2021) 388 ALR 75 at [46]- [48]; QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 15 at [48].

[57] [2023] HCA 15.

[59] Respondent's written submissions at [11].

[60] Darwin International Airport v DIAH (NT) [2012] NTLC 022 at [41].

[61] Local Court Exhibit R8 at AB 169 [8].

[63] Further demonstrated by the documentary evidence discussed in paragraphs [44]-[47] of the Reasons.

[76] [2016] HCA 26; (2016) 260 CLR 1.

[77] Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd & Anor [2016] HCA 26; (2016) 260 CLR 1, per French CJ, Kiefel and Bell JJ at [3] and [28].

[78] [2015] HCA 37; (2015) 256 CLR 104, [46]-[51] Kiefel CJ, Nettle and Gordon JJ at [49].

[80] Appellant's written submissions at [27].

[83] Local Court Exhibits R7 and R8.

[84] A courtesy letter with respect to delay of these reasons will also be forwarded to counsel.