Unconscionable conduct - what constitutes "unconscionable" - Fair Trading Act 1999 s 8.

Kennards Storage Management Pty Limited (ACN 109 442 917)

Hall v Kennards Storage Management Pty Ltd (Civil Claims) [2009] VCAT 1531

1. This proceeding and proceeding no. C5638/2008 shall be listed for further hearing together before me on a date to be fixed, with a whole day being allowed for the hearing, on

(a) the remaining issue of liability in this proceeding, and

1. The respondent Kennards Storage Management Pty Ltd ("Kennards") operates a storage facility at 159 Racecourse Road Flemington ("the premises"). In late 2005 the applicant Robyn Hall began to use one of the storage units at the premises, unit 153, to store goods belonging to her. She did so after having entered into a written agreement with Kennards dated 22 November 2005. The agreement required her to pay a commencing monthly storage fee of $594.00 for the use of the unit.
2. In March 2006 Kennards permitted Ms Hall to use a second unit, unit 158, to store goods of hers. The parties did not enter into any separate written agreement for the use of unit 158. They agreed orally that Ms Hall should pay total storage fees of $1000.00 per month, being $500.00 per month for each of unit 153 and unit 158.
3. On 12 May 2008 Kennards sold some of Ms Hall's goods to a second hand goods dealer. Kennards did so in reliance upon a term in the written agreement which stipulated that Kennards had the right to sell a storer's goods if storage fees remained unpaid for 42 days. The purchaser paid $1175.00 for the goods. Kennards applied the purchase price in reduction of the allegedly unpaid fees.
4. In this proceeding Ms Hall has claimed compensation for the value of those goods, which she alleges was very much greater than $1175.00. She maintains that Kennards had no right to sell them and that the sale amounted to a conversion of those goods which was wrongful in law.
5. On 23 May 2008 Ms Hall commenced this proceeding and, upon having given an undertaking as to damages, obtained an interim injunction restraining Kennards until further order from selling or in any way disposing of any goods belonging to her and requiring Kennards until further order to retain in its possession any goods belonging to her. On 5 June 2008 and then on 29 July 2008 the injunction was extended until further order. By the end of August 2008 Ms Hall had recovered some of the goods from Kennards and some from the purchaser, presumably by arrangement between the parties. (I say "presumably" because I have not been told how it happened.)
6. On 21 October 2008, at the conclusion of a compulsory conference, the presiding member ordered that there be a "hearing as to the liability of the Respondent to meet the claim of the Applicant ... without any determination of quantum". The presiding member directed that evidence be given at that hearing by way of witness statements and directed that the parties should file an agreed list of questions to be determined by the Tribunal as to the liability of Kennards to meet Ms Hall's claim.
7. Before the compulsory conference took place, Kennards had filed a cross-claim (described as a "counterclaim") as part of a document which it had filed as Points of Defence in this proceeding. The cross-claim was accepted by the Tribunal registry as an application commencing a fresh proceeding, number C5638/2008. In the cross-claim Kennards claimed $1807.00, being the balance of storage fees allegedly owing, plus damages representing "default action costs".
8. The hearing, on the issue on liability only, as had been directed, took place before me on 27 and 28 April 2009. Four witnesses gave evidence: Ms Hall, Brendan Gullifer, Wayne Birch and Eduard Halaijan. Messrs Gullifer and Birch are members of Kennards' managerial staff. Mr Halaijan is a former Kennards staff member. Each witness verified his or her filed witness statement. Without objection from Kennards, Ms Hall gave additional oral evidence in chief. Each witness was cross examined.
9. At the commencement of the hearing the parties produced an agreed list of questions. At the end of these reasons I shall answer most of those questions. I propose, however, to deal with the various issues of liability, as I see them, in a different way and in a different order from the order of the questions in the agreed list.
10. In maintaining that Kennards had no right to sell the goods, Ms Hall has put forward several alternative arguments.
    • Not in arrears. First, she challenges Kennards' assertion that her storage fees had remained unpaid for 42 days.
    • Statutory obligations not met. Secondly, she contends that Kennards was a bailee of her goods and a warehouseman within the meaning of the Warehousemen's Liens Act 1958. As such, it could not exercise a right of sale without first having given the notices required by that Act, which it had not.
    • Implied term: reasonable notice. Thirdly, she contends that Kennards breached an implied term of the storage agreement that it would not exercise any right of sale without first giving her reasonable notice of its intention to do so.
    • Estoppel. Fourthly, she contends that, by its conduct before the sale occurred, Kennards was estopped from exercising any right of sale that it had.
    • Unconscionable conduct. Fifthly, she contends that, in selling her goods when and how it did, Kennards engaged in conduct that was unconscionable and so contravened section 8 of the Fair Trading Act 1999.
11. Mr Dickenson, who appeared for Ms Hall, made submissions in support of those arguments, all of which were reflected in the agreed list of questions.
12. As will appear from the reasons given below, I have rejected all of those arguments and submissions, and, to the extent that the issue of liability has been canvassed before me, am determining that issue in favour of Kennards.
13. In addition to the five alternative arguments mentioned in paragraph 10 above, Mr Dickenson in his opening foreshadowed a sixth: an argument that Kennards had a duty to Ms Hall to take reasonable care to obtain a proper price when selling the goods, that it had breached that duty, and that Ms Hall has suffered loss as a result. The agreed list of questions did not include any question that related to such an argument. Mr Dickenson and Counsel for Kennards, Mr Purdey, told me that the parties had agreed that Ms Hall might keep that sixth argument in reserve, so to speak, and might lead evidence in support of it at a later hearing if she were to wish to do so. The hearing before me, therefore, while confined to the issue of liability, did not canvass that issue completely.
14. Despite the agreement that the sixth argument referred to above was not to be the subject of decision at the hearing, the evidence led at the hearing, and Mr Dickenson's submissions, sometimes strayed into the area that the sixth argument would have occupied. To the extent that they did, I have disregarded them.

1. The written agreement dated 22 November 2005 was signed by Mr Halaijan on behalf of Kennards and by Ms Hall, in each other's presence. On the printed face of the document, the storage unit was identified as "Space No. 153", the storage fee per month was stated to be "$594" and a "Late Payment Fee (applied 4 days after due date)" was stated to be "$11". Ms Hall initialled the document next to the figure "$11". She signed on a line below the words "I/We agree to be bound by the conditions of this Agreement as shown overleaf".
2. On the face of the document was printed a box headed "Main Points (see over for full agreement)". Beneath the heading were ten bullet points. The ones that are relevant to the disputes in this proceeding were:
   • All payments are to be made in advance by you (the Storer).
   • The space will only be accessible during set access hours as posted by the Operator.
   • Fourteen (14) days notice should be given for termination of this agreement.
   • If you fail to comply with the conditions of this agreement the Operator will have certain rights which include ... the right to sell and/or dispose of your goods (see Clause 6).
   • The Operator has the right to refuse access if all fees are not paid promptly (see Clause 8).
   • The Operator has the right to enter in certain circumstances (see Clauses 6, 16, 17 and 18).

Beneath the bullet points, Ms Hall had signed on a line below the words "I/We acknowledge that these matters have been drawn to my/our attention".

1. Printed on the back of the document were 22 "Conditions of Agreement". The ones that are relevant to the disputes in this proceeding were:

1. The Storer:
   • (a) has the right to store Goods in the Space allocated to the Storer by the Operator;

1. The Operator:
   • (a) ...
   • (b) Is not a bailee nor a warehouseman of the Goods and the Storer acknowledges that the Operator does not take possession of the Goods.

1. The Storer is responsible to pay:
   • (a) the Storage Fee being the amount indicated in this Agreement or the amount notified to the Storer in writing by the Operator from time to time. The Storage Fee is payable in advance and it is the Storer's responsibility to see that payment is made directly to the Operator, on time, in full, throughout the period of storage ...;
   • (b) ...
   • (c) a late payment fee, as indicated on the front of this Agreement, which becomes payable each time a payment is late.

1. Notwithstanding clause 18, the Storer acknowledges that, in the event of the Storage Fee, or any other moneys owing under this agreement, not being paid in full within 42 days of the due date, the Operator may, without further notice, enter the space ... and/or sell or dispose of any Goods in the Space on such terms as the Operator may determine ...

(a) has the right to access to the Space during Access Hours as posted by the Operator;

1. The Operator may refuse access to the Space by the Storer where moneys are owing by the Storer to the Operator, whether or not a formal demand for payment of such moneys has been made.

1. Subject to clause 16 the Storer consents to inspection and entry of the space by the Operator provided that the Operator gives 21 days written notice.

1. Once the initial fixed period of storage has ended, either party may terminate this Agreement by giving the other party Notice as indicated on the front of this Agreement. ...
2. Although the word "Operator" was nowhere defined, it obviously referred to Kennards. Mr Halaijan signed on a line on the face of the document below the words "Accepted by the Operator, signed for and on behalf of the Operator". Despite the reference to clause 18 to an initial fixed period of storage, the document did not fix or specify any period of storage.
3. It was common ground that in or about March 2006 Mr Halaijan, on behalf of Kennards, and Ms Hall agreed that Ms Hall could also use unit 158 at the premises to store goods and that the total monthly storage fee payable would be $1000.00, being $500.00 for unit 153 and $500.00 for unit 158. There was no separate written agreement for the use of unit 158. There does not seem to have been any dispute, however, that the parties regarded the terms and conditions of the written agreement dated 22 November 2005 as applicable to Ms Hall's use of unit 158 as well as to her use of unit 153. In effect, the written agreement was varied so that it covered unit 158 as well and so that the monthly storage fees became $500.00 for each unit.

Whether there was an Implied Term for Reasonable Notice

1. Clause 6 purported to confer upon Kennards a right to enter the "space" and sell or dispose of goods in it, without notice, if storage fees were unpaid for 42 days. (The phrase in clause 6 was "without further notice", but, as I state below, I consider that the phrase meant "without notice".) It was, on the face of things, a draconian clause. There has been no allegation that the clause was void or was not enforceable for any reason. For example, there has been no allegation that clause 6 was an unfair term in a consumer contract, within the meaning of Part 2B of the Fair Trading Act 1999, and was void for that reason. Rather, Ms Hall has alleged, and Kennards has disputed, that there was an implied term of the agreement that Kennards would not exercise any right of sale under clause 6 without first giving Ms Hall reasonable notice of its intention to sell. In fact, as will appear below, Kennards did give Ms Hall from time to time notice, of its intention to sell her goods, but the last written notice of such an intention was given about six months before the sale actually occurred, and there were lengthy negotiations between the parties in the interim. Ms Hall would want to say that that was not reasonable notice and that she was entitled to further notice than that.
2. The allegation of the implied term, that reasonable notice had to be given before any right of sale could be exercised, reflected the third alternative argument mentioned in paragraph 10 above. Mr Dickenson submitted that the term was implied as a matter of law, because of the nature of the contract. The kind of term that most frequently has been held to be implied in a contract as a matter of law is a term requiring the exercise of reasonable care or skill by a tradesman or professional person. Mr Dickenson did not refer me to any authority for the proposition that the contract in the present case was of such a nature that the term argued for should be implied into it, and I do not consider that the contract in the present case was of such a nature as that.
3. The words "without further notice" in clause 6 are puzzling. Why "further"? That word might be thought to indicate that there had been a need or requirement to give some earlier notice of some kind before the occasion arose for Kennards to exercise a right to enter once a storage fee had not been paid in full for 42 days. If it does indicate that, the word would give support to an argument that there was an implied term that reasonable notice would have to be given before Kennards could sell or dispose of goods.
4. Mr Dickenson submitted that the reference to "further notice" was explained by clause 15 and the requirement in it to give 21 days' written notice before Kennards could enter and inspect. If that is the correct explanation, I do not think it assists the argument for an implied term. For the question is whether there is an implied obligation to give reasonable notice, before a sale, of the intention to sell. Whether there is an obligation to give a notice before entry and inspection does not seem to me to assist in deciding whether there is an obligation to give a notice of intention to sell. I do not think that it is the correct explanation, however. Clause 6, headed "Default", operated in the event of fees remaining unpaid for 42 days. It gave a right of entry in that event. If there was no such event of default, a right for Kennards to enter could arise only under Clause 15, once 21 days' notice was given. If there was such an event of default, there was no need to resort to Clause 15; Clause 6 conferred the right of entry.
5. Nothing else in the written agreement seems to me to throw any meaningful light on the words "without further notice". The only other possible applicable reference to a notice is in clause 18; a notice of termination. It does not seem to make any sense, however, to read clause 6 as presupposing that a notice of termination has been given, or as implying a requirement that a notice of termination must be given before a right to enter and to sell or dispose can arise.
6. My view of clause 6 is that the word "further" is simply otiose and that "without further notice" means "without notice". It does not assist the argument for the implied term as postulated on Ms Hall's behalf. My conclusion is that there was no implied term that Kennards was required to give Ms Hall reasonable notice of its intention to sell before being able to exercise a right of sale.

The State of Ms Hall's Account at Date of Sale: Its Importance

1. Ms Hall had an unsatisfactory payment history with Kennards. Her payments were irregular. Frequently she was in arrears. Sometimes she would make a lump sum payment to reduce or extinguish the arrears, then fall behind again.
2. For two reasons, it is necessary to make a finding as to whether Ms Hall was indebted to Kennards immediately before it sold her goods on 12 May 2008 and, if so, the amount of her indebtedness. In the first place, the finding will resolve the dispute as to whether under the contract a right of sale had accrued to Kennards under clause 6 because storage fees and other moneys had remained unpaid for 42 days. In the second place, the finding will assist in the eventual determination of Kennards' cross-claim.
3. In its calculations of Ms Hall's alleged indebtedness to it, Kennards has included charges for late payment fees in reliance upon clause 4(c). Ms Hall has alleged that it was not entitled to charge those.
4. More importantly, Kennards has included charges for monthly storage fees at the rate of $575.00 for each unit from April 2007 until January 2008, and then at the rate of $620.00 for unit 153 and $615.00 for unit 158 for the months of February, March and April 2008. Kennards has alleged that it notified Ms Hall in writing of those increased fees and so under Clause 4(a) Ms Hall became liable to pay them. Ms Hall has alleged that Kennards was not entitled to demand those increased fees and that she was never liable to pay any fee after March 2006 that was greater than $500.00 per month for each unit.

1. Clause 4(c) of the written agreement provided for the storer to pay a late payment fee, as indicated on the front of the document, each time a payment of a storage fee was late. The front of the document indicated that the late payment fee was $11.00 and that it would be applied "4 days after due date".
2. On twelve occasions Kennards charged Ms Hall a late payment fee in respect of each unit. The late payment fees therefore totalled $132.00 for each unit.
3. Ms Hall disputes the late payment fees. In her verified witness statement she gave evidence that on the occasion of her signing the written agreement Kennards' manager called "Eddy" assured her that she need not worry about late payments and that Kennards would never charge late payment fees. On the faith of that assurance, she said, she did not insist on the reference to a late payment fee being deleted from the face of the document, and she proceeded to sign. "Eddy" turns out to have been Eduard Halaijan.
4. Mr Dickenson did not argue that the provision for late payment fees was not a term of the contract. Ms Hall signed the written agreement knowing that that provision was in it. Rather the argument was that Ms Hall was induced to enter into the written agreement by a misrepresentation that Kennards would never charge a late payment fee and that Kennards was therefore precluded from relying upon clause 4(c).
5. Mr Halaijan denied having made the statements that Ms Hall attributed to him. In cross-examination he stated that before she signed the written agreement Ms Hall queried the $11.00 late payment fee, said that she thought it was unfair and said that she might be late in making payments; he went on to state that before she signed he had told her that Kennards would probably allow her leeway of some sort, but did not tell her that the fee would never be charged.
6. I consider that Mr Halaijan's version of events is more likely to be correct. It seems improbable that the parties would have proceeded to sign the written agreement, without the provision for the late payment fee having been deleted or amended, if Mr Halaijan had given the firm assurance which Ms Hall alleges that he gave. It seems more likely that Ms Hall demonstrated some initial reluctance to sign the agreement as it stood, containing the provision about the late payment fee, but received the vague indication that some leeway might be allowed and then decided to sign the agreement as it stood. She was not induced to do so by any misrepresentation.
7. No other argument against the right to charge late payment fees was advanced. It was not argued, for example, that the provision for late payment fees was a penal provision and unenforceable for that reason.
8. On each occasion that Kennards applied and charged a late payment fee it was entitled to do so. A storage fee payment was more than four days overdue on each such occasion. The amount that Ms Hall was liable to pay to Kennards included, in respect of each of unit 153 and unit 158, late payment fees totalling $132.00.

Whether the Monthly Fees were Effectively Increased

1. Kennards charged Ms Hall a monthly storage fee of $500.00 per unit from March 2006 until March 2007. It then charged her $575.00 per unit from April 2007 until January 2008, then $620.00 for unit 153 and $615.00 for unit 158 for the months of February, March and April 2008.
2. Under clause 4(a) of the written agreement Kennards was entitled to charge a storage fee being "the amount indicated in the Agreement or the amount notified to the Storer from time to time".
3. The increase to $575.00. Kennards established that by written notices, dated 8 January 2007 in respect of unit 153 and dated 9 January 2007 in respect of unit 158, it notified Ms Hall that the new monthly storage fee would be $575.00, to take effect on March 2007. The evidence of both Ms Hall and Mr Halaijan was that in early 2007 Ms Hall complained about the notified increase and Mr Halaijan told her that he could do nothing about it.
4. Ms Hall proceeded to make payments at irregular intervals of various amounts and by 6 July 2007 had reduced the balance of her account to zero. So, in effect, she had been paying the increased fee of $575.00 per unit.
5. Mr Dickenson submitted that Kennards was never entitled to increase the monthly storage fee beyond the amount of $500.00 per unit to which, by agreement, the amount specified on the face of the written agreement had been varied. There were two limbs to the submission. The first limb was that on a proper construction of clause 4(a) "the amount indicated in this Agreement" and "the amount notified to the Storer in writing ... from time to time" were alternatives, so that Kennards only had the right to notify an amount in writing if the written agreement itself did not specify an amount; as the written agreement did specify an amount, the right to notify of a different amount did not exist. The second limb was that there had to be implied into clause 4(a) a limitation that the amount notified was a reasonable amount.
6. The first limit of the submission put forward a construction of the document which is commercially unrealistic. It is highly unlikely that there would ever be a case in which the document was executed without a monthly storage fee having been specified. In such a case the monthly fee payable at the commencement of the agreement would be uncertain and the amount would remain uncertain until Kennards notified the storer of it in writing. A much more commercially realistic construction is that clause 4(a) empowered Kennards to increase the monthly storage fee from the amount indicated on the face of the written agreement by notifying the storer in writing of the increase.
7. Clause 4(a), on its proper construction, gave Kennards a right to increase the storage fee unilaterally. That was an unusual state of affairs. In effect, a storer by signing the agreement in that form gave Kennards a blank cheque. Again, there has been no allegation that clause 4(c) was void or unenforceable, as an unfair term within the meaning of part 2B of the Fair Trading Act, or for any other reason. This is not a case of an agreement to provide storage space at a monthly fee to be agreed; such an agreement would be void for uncertainty. Clause 4(a), while unusual, did not create any uncertainty. But its unusual character would support an argument that, for the agreement to be commercially realistic, the implication was that the blank cheque was post-dated, so to speak, and that the written notice given must allow sufficient time to elapse before the obligation to pay the notified amount took effect, so that the storer had time to make one of the two decisions to which I have referred.
8. So there would be a reasonable argument in favour of a proposition that what had to be implied into clause 4(a) was a qualification that any written notice must be expressed to operate from a date that was a reasonable time into the future, so that the storer could decide whether to continue to store goods in Kennards' facility and pay the notified fee or instead to terminate the agreement, by giving 21 days' notice, and remove the goods.
9. I do not need to decide whether such a qualification was to be implied into clause 4(a), because in fact Kennards' notices of increase in January 2007 did allow Ms Hall a reasonable time before the increases took effect. The notices expressed the increases to take effect on 3 March 2007.
10. Mr Dickenson did not refer me to any authority in support of the submission that there should be implied into clause 4(a) a qualification that the amount of the increase had to be reasonable. I do not accept the submission. As I have said, if a storer received notice and thought that the amount was unreasonable, the storer could decide to terminate the agreement.
11. Kennards was entitled to give, and did effectively give, to Ms Hall notices in writing that the storage fee per unit was $575.00 per month as from 3 March 2007. Ms Hall became liable to pay $575.00 per unit per month from 3 March 2007 onwards.
12. Purported further increases. Kennards has purported to charge Ms Hall fees of $620.00 per month for unit 153 and $615.00 per month for unit 158 from 2 February 2008 for the months of February, March and April 2008. It has alleged that it was entitled to do so because it notified Ms Hall in writing, pursuant to clause 4(a), that those amounts would be payable as from 2 February 2008.
13. The notification that Kennards claimed to have sent to Ms Hall was a written notice dated 2 November 2007 that the fee for unit 158 was to be increased to $615.00 per month as from 2 February 2008 and a written notice dated 8 December 2007 that the fee for unit 153 was to be increased to $620.00 per month as from 2 February 2008. In his verified witness statement Mr Gulliver gave evidence that he "caused to be sent" to Ms Hall each of those notices.
14. Ms Hall swore that she did not receive either of those written notices and that she received no written notice of any kind from Kennards after October 2007. She gave evidence that she knew for the first time that Kennards had purported to increase the fees to those amounts when she received invoices in January 2008 that stated that those respective amounts were due on 2 February 2008.
15. I am not satisfied that Kennards sent those two written notices which it claims to have sent, dated 2 November 2007 and 8 December 2007 respectively. Mr Gulliver's expression "caused to be sent" is imprecise. It could mean nothing more than that he instructed somebody else to send them. He stopped short of swearing that he himself posted them or sent them in any other manner. Moreover, Mr Gulliver's evidence about sending, or causing to be sent, notices to Ms Hall is unreliable. Below I shall refer to evidence he gave about the sending of "notices to dispose" to Ms Hall in December 2007 and in January 2008. In his verified witness statement he swore to the sending of them. In cross-examination he admitted that they were not sent and that his earlier evidence that the notices were sent was false. I accept Ms Hall's evidence that before she sighted the January invoices she had not received any intimation from Kennards that the monthly fees had been increased, or would be increased, above $575.00.
16. Mere delivery of the January invoices to Ms Hall did not result in her having been "notified in writing", within the meaning of clause 4(a), of any monthly fee greater than $575.00. The invoices demanded payment of fees which included the purportedly increased fees of $620.00 and $615.00 respectively. The invoices amounted to an assertion that the fees were already payable, in advance. But for a fee other than the fee indicated on the face of the written agreement (or varied by agreement) to become operative and payable, there needed to have been notification in writing earlier than those invoices. I am not satisfied that such notification had occurred.
17. Monthly fees: Conclusion. Kennards proved that it was entitled to charge Ms Hall monthly fees of $575.00 per unit from March 2006. It did not prove that it was entitled to charge any fee that was greater than $575.00 per unit per month. So the fees that Ms Hall was obliged to pay for the months of February, March and April 2008 were $575.00 per unit, not $620.00 for unit 153 or $615.00 for unit 158.

1. In his verified witness statement Mr Gulliver gave evidence that as at 30 April 2008, after Ms Hall had made a payment on that day of $1,900.00 which was allocated equally between her account for unit 153 and her account for unit 158, the balance owing by Ms Hall for storage fees and late payment fees was $1543.00 for unit 153 and $1408.00 for unit 158. That evidence was supported by Kennards' accounting records headed "Listing of Customer Transactions" exhibited to Mr Gulliver's witness statement.
2. I accept, with one qualification, that those figures have been correctly calculated. The qualification is that the calculations included purported storage fees for February, March and April 2008 of $620.00 for unit 153 and $615.00 for unit 158. I have found that Kennards were entitled to charge only at the rate of $575.00 per unit in respect of those months. The calculations have to be adjusted accordingly, by $135.00 ($620.00 - $575.00 = $45.00, x 3) for unit 153 and by $120.00 ($615.00 - $575.00 = $40.00, x 3) for unit 158.
3. There was no dispute that Ms Hall did not make any further payment after 30 April 2008 before her goods were sold on 12 May 2008.
4. So, as at 12 May 2008, immediately prior to the sale, the state of her indebtedness was:

1. Plainly, the total indebtedness exceeded 42 days' arrears. Two months' arrears would have been $2300.00 ($575.00 x 2 x 2). The indebtedness was more than that.
2. Accordingly, the event upon which, under clause 4(a) of the written agreement, Kennards gained a right to sell Ms Hall's goods had occurred.

1. Kennards' practice, when a customer had failed to pay a monthly fee in advance, was to send a series of letters: a first notice of arrears, then a second, and sometimes a third. If payment had not been made following the last letter, Kennards' practice was to send to the customer a final notice headed "notice to dispose". The notice to dispose warned that Kennards was proceeding with a disposal of the customer's goods but would "cease our disposal proceedings" if full payment was made "within 10 days of this letter".
2. The letters, and the notices to dispose, were generated electronically in a computerized record-keeping system. So there was an electronic record of their generation. Obviously, the actual sending of those letters and notices to customers required human initiative.
3. I have already said that in my opinion the form of written agreement used in this case did not impose any obligation upon Kennards to give the customer (storer) notice of the intention to sell once the right to sell had accrued. Nevertheless, Kennards adopted the practice described above, so that some notice of intention to sell was in fact given.
4. Mr Gulliver's evidence was that from November 2006 onwards, from time to time, Ms Hall was sent letters requiring payment of arrears and was then sent notices to dispose. Once Ms Hall had made a payment, but then next failed to make a payment on time, Kennards would prepare and send a fresh serious of arrears letters and notices to dispose. His evidence was that notices to dispose (one for each unit) were sent to her on 7 February 2007, 21 May 2007 and 17 October 2007. Ms Hall admitted having received the notices to dispose dated 21 May 2007 and 17 October 2007.
5. In his verified witness statement Mr Gulliver went on to say that he "caused to be sent" to Ms Hall notices to dispose on 7 December 2007, and "sent" to Ms Hall notices to dispose on 26 February 2008, in respect of both units. Kennards' record-keeping system showed that those notices had been generated electronically. Ms Hall denied having received any such notices and gave evidence that she had received no notice to dispose after October 2007. In cross-examination Mr Gulliver admitted that no notices to dispose were sent to Ms Hall in December 2007 or in February 2008 and that his earlier evidence that such notices were sent was false.
6. The last notices to dispose ever sent to Ms Hall, therefore, were those sent on 17 October 2007. Kennards' electronically kept records wrongly indicated, however, that notices to dispose had been sent on two occasions after that date.

1. Both before and after 17 October 2007, when Kennards last sent to Ms Hall notices to dispose (so I have found), there were several periods of negotiation between the parties. The negotiations followed a pattern. Kennards would threaten to sell the goods unless payment was made by a certain deadline. The deadline would pass. Ms Hall would make a payment. Kennards would extend the deadline then make a further threat to sell unless payment was made by the extended deadline.
2. Those periods of negotiation culminated in a telephone conversation between Ms Hall and Mr Gulliver on 7 May 2008, five days before the date on which Kennards sold the goods. Ms Hall has alleged, and Mr Gulliver has denied, that during that conversation she was given an extended deadline of 14 days to make a payment in reduction of her account yet Kennards went back on their assurance of 14 days' grace and sold after only five days. Below I shall deal separately with the evidence about that conversation.
3. I need to recount in some detail the evidence about the periods of negotiation because of its importance to Ms Hall's argument that Kennnards was estopped by its conduct from exercising its right of sale when it did.
4. The first period: 21 January 2007 to 7 February 2007. On 21 January 2007 Kennards sent to Ms Hall a notice to dispose. Despite the expiration of 10 days from that date without Ms Hall having made a payment, Kennards did not proceed with any sale, as it had threatened in the notice to do if payment was not made. On 7 February 2007 Ms Hall made a payment of $2000.00, so that her indebtedness was reduced to $66.00.
5. The second period: 21 May 2007 to 16 July 2007. Kennards sent notices to dispose to Ms Hall on 21 May 2007, by which date her indebtedness had become $2322.00. She did not comply with the notice. Kennards took no action until 28 June 2007, when Mr Gullifer gave Ms Hall a deadline: that unless she paid by the following day the goods would be sold. She did not pay by the following day. Kennards did not enforce the deadline.
6. On 16 July 2007 Ms Hall paid $2900.00. That payment brought her account up to date: her indebtedness was zero.
7. The third period: 17 October 2007 to 15 January 2008. Kennards sent notices to dispose to Ms Hall on 17 October 2007, by which date her indebtedness had become $3028.00. When the 10 day period specified in the notices to dispose expired, Kennards took no action until 10 December 2007. On that day Mr Gullifer gave Ms Hall another deadline: unless she paid by the end of that week no further extension of time would be given and her goods would be sold by the end of the month. Kennards did not enforce that deadline.
8. On 15 January 2008 Ms Hall paid $4500.00. According to Kennards, her indebtedness was thereby reduced to $1011.00 for unit 153 and $891.00 for unit 158.
9. The fourth period: 5 March 2008 to 30 April 2008. On 5 March 2008, when according to Kennards Ms Hall owed $2662.00 for unit 153 and $2532.00 for unit 158, Mr Gullifer and another Kennards employee broke the locks which Ms Hall had placed on unit 158, entered the unit, and, so that they could make room in unit 158 to prepare an inventory of the goods with a view to offering them for sale, moved some of the goods out of unit 158 into a spare unit, unit 163. After having done this they locked unit 158 and unit 163 with Kennards' own locks.
10. On 6 March 2008 a meeting occurred between Ms Hall, Mr Gullifer and Mr Birch. Ms Hall had made a payment of $800.00 on that day before the meeting occurred. At the meeting Ms Hall queried the state of her account and maintained that Kennards was entitled to charge her only $500.00 per month for each unit. Kennards was maintaining that after her payment of $800.00 her indebtedness was $1862.00 for unit 153 and $1732.00 for unit 158.
11. At the meeting, the parties discussed how Ms Hall might pay off what she owed, whatever that amount was. They discussed the idea of Ms Hall vacating unit 153 and consolidating the storage of all her goods within unit 158. They discussed the idea of Ms Hall holding a garage sale on 29 March 2008 and using the proceeds of the sale to reduce what she owed.
12. Mr Gullifer and Mr Birch both gave evidence that at the meeting they told Ms Hall that Kennards had broken the locks to unit 158, had entered unit 158 and had moved goods to unit 163. Ms Hall's evidence was that she had discovered those facts (the breaking, entry and moving) herself on a day when she went to the premises to make a payment, saw a new lock on unit 158, asked an employee to open it, and saw that her goods had been disturbed. That day was probably 6 March 2008, for she made a payment on that day. I think it is likely that by the conclusion of the meeting Ms Hall had become aware somehow of the breaking of the locks, the entry, the removal of goods to unit 163 and the re-locking of unit 158 with Kennards' locks. Whether she became aware during the meeting or before the meeting does not matter, in my opinion.
13. Mr Birch gave evidence that he told Ms Hall during the meeting that she would have to vacate the units entirely by the end of March 2008 unless, pending the garage sale, she had consolidated the storage by moving all her goods into unit 158 and, following the garage sale, had paid all arrears in full. I accept that evidence and find that he did tell Ms Hall those things.
14. The exclusion of Ms Hall from unit 158 as a consequence of the re-locking with Kennards' locks, and the placing of some of her goods in unit 12763, did not last long. She was soon given a key to the locks on both of those units. Mr Gullifer's file note in Kennards' electronic filing system was that he gave hew new locks and keys on 10 March 2008. By the end of March the goods that had been in unit 163 were back in the other units to which she had keys.
15. The garage sale did not take place on 29 March 2008. Nor had Ms Hall made any further payment by 31 March 2008.
16. On 31 March 2008, consistently with the deadline that Mr Birch had set, Mr Gullifer placed additional locks on both unit 153 and unit 158 so that Ms Hall had no access to them. He spoke to Ms Hall by telephone that day. His evidence was that he gave her a new deadline of the next day to pay $3000.00. Ms Hall denied that he did that. He also gave evidence that the next day, 1 April 2008, he extended the deadline again by a day. Ms Hall denied that too. Mr Gullifer's evidence of those conversations was supported by file notes he had made in the electronic filing system. Moreover, something caused Ms Hall to speak to Mr Birch (Mr Gullifer's superior) in early April, which she did. So I think it likely, and find, that Mr Gullifer did give, then extend, the deadline in the ways described in his evidence.
17. Mr Birch gave evidence that on 3 April 2008, when Ms Hall telephoned him, he agreed to allow her to conduct her garage sale on 5 April 2008, said that that was her last chance to pay off the arrears, and said that if she had not paid off the arrears by 9 April 2008 her goods would be sold. I accept that evidence.
18. The garage sale occurred on 5 April 2008 but was not a success. Ms Hall paid nothing to Kennards from the proceeds of sale. To enable her to conduct the sale, Kennards had removed the locks which it had placed on the units.
19. On 8 April 2008 Mr Gullifer again put Kennards' locks on unit 153 and unit 158, excluding Ms Hall from access. His evidence was that on 9 April 2008 he gave Ms Hall a new deadline of 11 April 2008, then on 16 April 2008 told her that her goods would be sold by the end of the month unless she paid in full by the following day, 17 April 2008. Ms Hall disputed that evidence. Mr Gullifer's evidence about those conversations is supported by file notes in the electronic file system. So I accept that his evidence about those conversations is substantially correct.
20. Ms Hall made no payments until 30 April 2008, when she paid $1900.00. By that date Mr Gullifer had obtained written offers from two second hand goods dealers who had been given access to Ms Hall's units and had valued the goods in them. The higher offer was $1175.00. Mr Gullifer did not tell Ms Hall that he had obtained that offer. He did not tell her that he was intending to proceed with a sale of her goods despite her payment of $1900.00.

7 May 2008: Whether Kennards Promised to Allow 14 Days to Pay

1. On 7 May 2008 Ms Hall and Mr Gullifer spoke by telephone. The conversation concluded, and took place against the background of, the history of negotiations - the demands, extensions of time, deadlines, payments and other conduct - set out in the preceding section of these reasons. The background includes the fact, as I have found, that no formal written notice to dispose had been given to Ms Hall since 17 October 2007.
2. Ms Hall's allegations about the conversation on 7 May 2008 are at the forefront of her argument that by its conduct Kennards was estopped from exercising any right to sell that might have accrued.
3. Her version of the conversation was this. Mr Gullifer telephoned her. At the time she was suffering from a migraine headache that she had had for several days. He told her that she would have to pay $1500.00 within two weeks. She replied that she would be able to do that. He made no mention of any intended sale of the goods or of any offer by a second hand goods dealer to purchase them. Had he mentioned those things, she would have sought the assistance of the Consumer Affairs Victoria in an attempt to stop the sale.
4. Mr Gulliver's version of the conversation was different. It was this. He did mention $1500.00 and a period of two weeks but in a different context. He did mention that Kennards was disposing of her goods. He told her that if she would agree to pay $1500.00 and vacate the units within fourteen days Kennards would not continue with the sale of her goods, but she would need to let him know by the close of business on 9 May 2008 (two days' time) whether she did agree to pay and vacate within fourteen days, and the sale would proceed if she did not let him know by the close of business on 9 May 2008. She said she would think about it. He heard nothing by the end of 9 May 2008. So he proceeded to sell the goods on 12 May 2008.
5. I am not satisfied that either version of the conversation is completely correct. Ms Hall's ability to have understood and remembered the conversation accurately was affected by her migraine headache. She was not a consistently reliable witness. On another subject - what was said about the late payment fee when she signed the written agreement - I have preferred another person's evidence to hers. On the other hand, Mr Gulliver's credibility generally was damaged by his admission that evidence that he had given in his verified witness statement about notices to dispose having been sent after 17 October 2007 was false. There is a very brief file note about the conversation in the electronic filing records but on such a crucial matter it does not lead me to prefer his evidence to Ms Hall's on this topic.
6. I find that during the conversation on 7 May 2008 Mr Gullifer put to Ms Hall the idea of her paying $1500.00 within fourteen days. I am not satisfied that, as Ms Hall alleged, he put that as a firm proposal that Kennards would take no action for fourteen days so that she had that time to pay. On the other hand I am not satisfied that Mr Gullifer told Ms Hall that the process of selling her goods was under way or that he told her distinctly that her response to the above idea was required by 9 May 2008 otherwise the sale of her goods would proceed. The conversation, I find, was one in which that idea of a payment of $1500.00 within fourteen days was left vague. It did not crystallize into any firm proposal by either party to the conversation. It did not take the form of a promise or clear representation by Kennards.

1. On 9 May 2008, apparently in anticipation of Ms Hall not telling him by the close of business that day that she promised to vacate the units within fourteen days and pay $1500.00, Mr Gullifer prepared a document headed "Certificate of Compliance". Attached to the certificate was another document headed "Notification of Delinquent Compliance". Mr Gulliver prepared that document too. He prepared the documents in order to submit them to his superior, Mr Birch, so that Mr Birch could authorize the sale of the goods to the second hand goods dealer who made the higher offer to purchase.
2. In the "Notification of Delinquent Compliance", Mr Gullifer inserted information in a block headed "Letters". The information was that three successive letters, demanding payment of arrears, had been sent to Ms Hall on specified dates in November 2007, and that a "notice to dispose of goods" had been sent to her by registered mail on "8/12/08" (evidently a mistake for "8/12/07"). A registered post number was given for the sending on that date. Mr Gullifer signed the "Notification of Delinquent Compliance", containing that information and signed the "Certificate of Compliance".
3. The information in the "Letters" block was false. Although letters dated in November 2007 addressed to Ms Hall had been generated electronically in Kennards' computerized system, no such letters had been sent to her. Although two notices to dispose, one for unit 153 and one for unit 158, both dated 8 December 2007 and addressed to Ms Hall, had been generated electronically in Kennards' computerized system, neither notice had been sent. Mr Gullifer admitted that those letters and those notices had not been sent. As to the registered post number, there was no evidence as to its source, or whether it was fictitious, or whether it related to the posting of something else.
4. On 12 May 2008 Mr Birch perused the "Certificate of Compliance" and the "Notification of Delinquent Compliance" and countersigned them both. He did so, according to his verified witness statement, after satisfying himself that "all necessary activities had been completed by Kennards to qualify Ms Hall's goods for disposal". In cross-examination he stated that before countersigning the documents he had looked at the computer system to check the accuracy of the information in the "Letters" block and to check Ms Hall's payment record. I am satisfied that Mr Birch did not know, when he countersigned the documents, that the information in the "Letters" block was wrong.
5. The evidence does not justify a finding that Mr Gullifer knew that the information was wrong when he entered it in the "Letters" block and signed the documents. But I do find that when he entered the information, and signed, he was careless as to whether the information was true or false.
6. Once Mr Birch countersigned the documents, the sale of the goods proceeded, and occurred on 12 May 2008.

1. Mr Dickenson submitted that Kennards was a bailee of Ms Hall's goods at all material times, or at least from the time that Kennards put its own locks on units and prevented Ms Hall from having access to her goods. Mr Dickenson went on to submit that, as a bailee, Kennards was a warehouseman as defined by the Warehousemen's Liens Act 1958 and obliged to comply with that Act before it had a right in law to sell the goods.
2. In my opinion, Kennard, Kennards was not a bailee of the goods at any material time.
3. The essence of bailment is that the owner of goods (the bailor) transfers possession of the goods to another (the bailee) who voluntarily accepts possession. The elements of a bailment are: the bailor delivers up the exclusive right of possession; the bailee voluntarily assumes possession; the bailee assumes responsibility to keep the goods safe; and the bailee is obliged to return the thing bailed. See Halsbury's Law of Australia, volume 2, paragraphs [40-4] and [40-5].
4. The written agreement into which Ms Hall and Kennards entered was described as a "Storage Space Hire Agreement". By clause 2 of the agreement the parties agreed that Kennards was not a bailee or warehouseman, and Ms Hall acknowledged that Kennards did not take possession of her goods. Mr Dickenson submitted, correctly, that how the parties chose to describe their relationship was not conclusive of whether their relationship was one of bailor and bailee. One must have regard also to what the parties did once the agreement was signed.
5. In Palmer on Bailment 2nd edition (1991), page 409, under the heading "Space-renting agreements", the learned author states:

Where an occupier grants the owner of a chattel the exclusive right to use a particular identified portion of his premises for storage or safe-keeping, this agreement will frequently provide conclusive evidence against the creation of a bailment. The reason is that the exclusion of the occupier is inconsonant with the high degree of physical control necessary to constitute a delivery of possession.

1. When Ms Hall commenced to store goods in each of unit 153 and unit 158 Kennards provided her with a key to the unit. Until May 2007 she could only gain access to the units during normal business hours, for the premises were open only during those hours. In May 2007 Kennards installed a security system which allowed her to gain access to the premises by using an after hours access code to open the external door to the premises. Despite the restriction on access until May 2007, and consistently with the terms of the written agreement, Ms Hall retain possession of the goods stored in the units. She had the keys to the locks on the units. She did not deliver possession to Kennards. Kennards did not assume possession of the goods. Kennards did not undertake to keep the goods safe.
2. Mr Dickenson submitted that a High Court decision, Commissioner of Taxation (Commonwealth) v ANZ Banking Group Limited (1979) 53 ALJR 336, supported the contention that Kennards was a bailee. In that case a customer of the bank deposited property in a safe-deposit box. The bank kept a duplicate of the key in a sealed packet. The issue was whether the bank had "custody" or "control" of the property for the purposes of the Income Tax Assessment Act 1936. The High Court decided that the bank had both custody and control. It did not have to decide, and did not decide, whether the bank was a bailee of the property. In my opinion the decision on whether within the meaning of a taxation statute there was "custody" (let alone "control") of property does not assist in a determination of whether in the present case there was delivery and acceptance of possession of goods and hence a bailment. Moreover, in the present case there was no evidence that Kennards retained a duplicate key to unit 153 or to unit 158 then it gave Ms Hall the key. I infer that Kennards did not retain a duplicate key, for otherwise there would have been no need for Kennards to break Ms Hall's locks, as it did on two occasions.
3. Mr Purdey referred me to Wilmers and Gladwin Pty Ltd v. WAL Building Supplies Pty Ltd (1956) 72 WN 440, a decision of the Full Court of the Supreme Court of New South Wales. In that case the defendant, an occupier of part of a building, permitted the plaintiff to use two open storage bays within the building. The defendant obtained the keys to the building. When the plaintiff asked to deposit goods in the bays the defendant sent an employee with a key to open the doors of the building. It was held that there was no bailment of the goods; the defendant had not undertaken to provide safe custody for the goods; it merely had made available a right to enter, use and occupy the bays to store goods over which the plaintiff retained control; there was no delivery of possession. The present case is a stronger one than the Wilmers case for a conclusion of "no bailment", for at the outset Ms Hall had keys to the units but Kennards did not.
4. On 8 April 2008 Kennards broke Ms Hall's locks to the units, placed its own locks on them and sealed them. It retained the keys to the locks. By so doing it denied Ms Hall access to the goods stored in the units. It permitted second hand goods dealers to enter the units and to inspect and value the goods.
5. Mr Dickenson argued that even if Kennards was not a bailee of the goods in units 153 and 158 prior to 8 April 2008 it became a bailee of them on that day and remained a bailee at the time of sale.
6. In Palmer on Bailment (above) at pages 411-412, in footnote 23, the learned author refers to two unreported English decisions which held that "the ... improper exclusion of the depositor from his property by the occupier of the premises upon which they were stored rendered the occupier a bailee" and which "illustrate ... that a transaction which begins life by way of a licence may be transformed into a bailment at a later stage, whether by agreement or merely by the unilateral act of the bailor in asserting control over the goods". So, it seems, in the learned author's opinion, even though one of the usual indicia of bailment - the delivery of possession by the owner - is absent, an improper exclusion from possession and a unilateral taking of control over the goods can create a bailment.
7. Relying upon that opinion and the authorities cited for it, Mr Dickenson submitted that on 8 April 2008 by improperly excluding Ms Hall from her property through its unilateral actions Kennards had become a bailee of Ms Hall's goods.
8. Mr Purdey's answering submission was that the exclusion was not improper but was permitted under the terms of the written agreement. Clause 8 provided that Kennards might refuse Ms Hall access to the unit ("the space") described in the agreement where moneys were owing by her to Kennards, which they were. In my opinion this answering submission is correct. I have found that moneys were owing by Ms Hall to Kennards as at 8 April 2008. Clause 8 conferred upon Kennards the right, in the circumstances, to exclude Ms Hall from access to the goods while they were within the units. The exercise of that right was not improper.
9. While Kennards was entitled to lock out Ms Hall and thus deny her access to the goods while the goods were within the units, it would not have been entitled to refuse to allow her to remove the goods from the units and from the premises if she had asked them to allow her. Kennards was not a bailee. So it had no lien over Ms Hall's goods for unpaid fees.
10. There had been an earlier occasion of locking-out of Ms Hall, in March 2008, when Kennards entered unit 158, moved some of the goods to unit 163, took an inventory, and placed its own locks on the units. Arguably Kennards became a bailee, through improper transfer to unit 163, of such goods as were transferred to unit 163 for so long as they remained there. But that state of affairs was only temporary. Whether Kennards became a bailee of some of the goods temporarily is immaterial. What matters most is whether it was a bailee at the time of sale. That is why I expressed the opinion that Kennards was not a bailee of Ms Hall's goods at any material time.

1. Section 3 of the Warehousemen's Liens Act 1958 defines "warehouseman" as follows (unless inconsistent with context or subject matter):

warehouseman means a person lawfully engaged in the business of storing goods as a bailee for hire or reward.

1. Section 7(1) of that Act empowers a warehouseman to sell by public auction any goods upon which he has a lien for charges which have become due. The sub section expresses the power to be in addition to all other remedies provided by law for the recovery of warehousemen's charges. The rest of the section sets out a regime for the giving to the debtor of written notice of the intention to sell and for newspaper advertising of the time and place of sale.
2. Mr Dickenson submitted that Kennards had no right or power to sell Ms Hall's goods because the required notice had not been given and the required advertisements had not been published. I do not accept the submission. There are several answers to it.
3. First, and obviously, because I have concluded that Kennards was not a bailee of the goods, Kennards could not fall within the definition of "warehouseman".
4. Secondly, even if a bailee at the time of sale, Kennards was not a "warehouseman" as defined because it was not engaged in the business of storing goods as a bailee for hire or reward. Ms Hall engaged it to provide storage space for her, not to store goods for her. It was in the business of providing storage space, not of storing goods. The hire or reward for which it was engaged was for storage space, not for storage of goods. Even if Kennards became a bailee on 8 April 2008 and stored goods as such until they were sold, Kennards was not doing so in the business of storing goods as a bailee.
5. Thirdly, the Act does not render a sale invalid or tortious if the required notice was not given and the required advertisement was not published. It merely creates a power of sale if one does not otherwise exist. One did exist. The contract between the parties created the power if the storage fees remained unpaid for 42 days. If that right to sell accrued, as it did, Kennards had no need to resort to the exercise of a power under section 7 and so was not obliged to give the notice or publish the advertisement required by section 7.
6. Mr Purdey submitted that there was another answer: section 12 of the Act. That section provides that nothing in the Act shall be construed as abrogating, limiting or in any manner affecting any power of sale which a warehouseman may have, apart from the Act, "in respect of any goods stored by him". That section, however, is not applicable. The power of sale created by the contract was not a power of sale in respect of goods stored by Kennards. It was a power of sale in respect of goods stored by Ms Hall in storage space which Kennards had made available to her.
7. For those reasons the Warehousemen's Liens Act 1958 has no application the present case.

1. In paragraphs 67 to 92 above I have set out the history of negotiations between the parties - the demands, extensions of time, deadlines, payments and other conduct - which culminated in the disputed conversation between Ms Hall and Mr Gullifer on 7 May 2008 and the sale on 12 May 2008.
2. Mr Dickenson submitted that because of Kennards' conduct as revealed in that history Kennards was estopped from exercising any right to sell Ms Hall's goods which Kennards had had, so that the sale was wrongful. The submission was that the conduct amounted to a representation on 7 May 2008 that Kennards would not enforce any right of sale for a further fourteen days. Alternatively, the submission was that the conduct amounted to a representation that Kennards would clearly notify her of a deadline for payment of what she owed and would not enforce any right of sale unless that deadline passed without her having made the payment or having removed her goods from the units.
3. In Legione v. Hateley (1983) 153 CLR 406 the High Court confirmed that a particular instance of the doctrine of equitable estoppel, usually called promissory estoppel, is part of the law of Australia. At page 432 Mason and Deane JJ stated:

....[T]here is strong authority in equity for a limited doctrine of promissory estoppel - representations (or promises) as to future conduct - restricted to precluding departure from a representation by a person in a pre-existing contractual relationship that he will not enforce his strict contractual rights.

Their Honours proceeded to cite passages from two nineteenth-century English decisions, as illustrations of that authority.

1. The first decision was that of the House of Lords, Hughes v. Metropolitan Railway Co (1877) 2 App Cas 430. The passage cited was from the speech of Lord Cairns LC at page 448:

... [I]f parties who have entered into definite and distinct terms involving certain legal results - certain penalties or legal forfeiture - afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties.

1. The second decision was that of the Court of Appeal, Birmingham and District Land Co. v. London and North Western Railway Co. (1888) 40 Ch D 268. The passage cited was from the judgment of Bowen LJ who, after quoting that passage from the speech of Lord Cairns LC, said at page 286:

The truth is that the proposition is wider than cases of forfeiture. It seems to me to amount to this, that if 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 in the same position as they were before. That is the principle to be applied.

1. By embracing the doctrine of promissory estoppel the High Court in Legione v Hateley (above) appears to have approved the statement of the law in those two passages and to have put an end to the controversy as to whether they conflicted with other English authority.
2. The submission in the present case can be put by adopting the language of those two passages. First, adopting the language of Bowen LJ, the proposition would by that Mr Gullifer's statements on 7 May 2008 Kennards induced Ms Hall to believe that it would keep in suspense or abeyance for fourteen days its right to sell her goods, so that she had the opportunity to pay her debt within that time, and that Kennards was estopped from enforcing its right to sell before that period had elapsed. Alternatively, adopting the language of Lord Cairns LC, the proposition would be that the course of negotiations between the parties over a lengthy period had led her to suppose that Kennards would not enforce its right unless it formally and clearly gave her a final deadline and until that deadline had passed.
3. My findings about the disputed conversation of 7 May 2008 mean that Ms Hall cannot make out that first proposition. The contents of the conversation did not justify a belief that Kennards would suspend or keep in abeyance for fourteen days the enforcement of its right to sell. A representation must be clear and unambiguous before it can found an estoppel: Legione v Hateley, above, at page 436. As I have said above, I am not satisfied that Mr Gullifer made any promise or representation at all during the conversation, let alone a clear and unambiguous one.
4. My findings about the history of negotiations between the parties, however, leave open the alternative proposition. The course of the negotiations created a basis for a belief that Kennards would not enforce its right to sell unless it first gave a final deadline in the clearest and most unequivocal terms and unless the deadline was not met. There is a starting-point, therefore, for the proposition that Kennards' sale of the goods was wrongful because it was estopped by its conduct from exercising that right, it never having given that final unequivocal deadline.
5. After that attractive starting-point, however, the argument breaks down. There was simply no evidence that Ms Hall ever had such a belief. She did not say so. There was no evidence of conduct on her part from which the existence of such a belief could be inferred. She did not say that she thought that she could wait for such a deadline to be given so that her situation was not irretrievable until that deadline had passed. To the contrary, her evidence was that such a deadline had been given, a fourteen-day deadline, during the conversation on 7 May 2008, and that she believed she had been given a fourteen-day period of indulgence. I have found that no such deadline was given and that her belief was not justified. If there had been something else in the history of negotiations that was explicable only by the existence of a belief on Ms Hall's part that Kennards would have had to give her a more formal and unequivocal warning than it had already given her before things got really serious for her, then my conclusion might have been different, for I might have inferred the existence of that belief. But there was not.
6. To make out a promissory estoppel, the person to whom the representation was made needs to do more than establish that it gave rise to a belief or supposition or assumption that rights would not be enforced or would be kept in abeyance or suspense. It is necessary to establish in addition that the person in some way acted, or abstained from acting, on the faith of that belief, supposition or assumption, and thereby suffered detriment: Halsbury's Laws of Australia, volume 12 paragraph [190-315]; Legione v Hateley, above, at page 437. Only then, by failing to honour the promise or the representation and thereby acting to avoid the detriment, is the promisor's or representor's conduct "inequitable" (as expressed by Lord Cairns LC).
7. There is considerable room for doubt about whether Ms Hall did act, or abstain from acting, on the faith of a belief, supposition or assumption (if she had one or made one) that there would be no enforcement of a right to sell in the absence of a clear and unequivocal final deadline. She needed to establish that she could have and would have paid what was owing, or could have and would have removed her goods from the units, before any reasonably given deadline expired. She gave evidence that she could have paid $1175.00 (the same amount as what turned out to be the sale price) immediately after 7 May 2008 if she had known that she was not going to be given fourteen days to pay, as she believed she had been. That evidence was not seriously challenged. I have wondered whether, nevertheless, I should accept it. She did not say how, or from what source, she could have made that payment. The irregularity of her payments to Kennards, the frequency with which she fell into default, and the failure of the garage sale, invite scepticism about the assertion that she could have made an immediate payment. As for the idea of removing her goods from the units, she did not say that she could have removed them before the expiration of any reasonably given deadline, and the evidence suggests that she probably could not have done. She told me that when in August 2008 she did remove from the units those goods which had not been sold it took her two full days to remove them in two trucks with the assistance of twelve people. In the end, however, in the absence of any serious challenge to her evidence on this point, I have concluded that I should accept it, and I do. She established that she suffered detriment. But the causal connection between the detriment and Kennards' conduct has not been established.
8. It would have been better and fairer if Kennards had given Ms Hall one final clear and unequivocal ultimatum, preferably in writing, and had waited to see whether she had met the ultimatum, before taking the irrevocable step of selling her goods. To my mind, the submission that there was an estoppel has been the one that had the best prospects of success, and I would have had fewer misgivings about rejecting it had such an ultimatum been given. For the reasons above I do reject it, however.

1. Ms Hall has alleged that Kennards engaged in conduct, in trade or commerce, in contravention of section 8 of the Fair Trading Act 1999 ("FTA"). Section 8(1) and (2) provide:

(1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services of a kind ordinarily used for personal, household or domestic purposes to a purchaser, engage in conduct that is, in all the circumstances, unconscionable.

(2) Without in any way limiting the matters to which a court or the Tribunal may have regard for the purpose of determining whether a person has contravened subsection (1), a court or the Tribunal may have regard to -

(a) the relative strengths of the bargaining positions of the supplier and the purchaser; and

(b) whether, as a result of conduct engaged in by the supplier, the purchaser was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

(c) whether the purchaser was able to understand any documents relating to the supply or possible supply of the goods or services; and

(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against the purchaser or a person acting on behalf of the purchaser by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and

(e) the amount for which, and the circumstances under which, the purchaser could have been supplied with identical or equivalent goods or services from a person other than the supplier.

1. Section 159 of the Fair Trading Act 1999 provides (amongst other things) that a person who suffers loss or damage because of a contravention of a provision of the FTA may bring a proceeding in VCAT and may in that proceeding recover the amount of the loss or damage. Section 158 of the Fair Trading Act 1999 affords other remedies to such a person in a VCAT proceeding, including an order that all or any of the provisions in a contract are not to be enforced.
2. There has been, and could be, no dispute that all the conduct of Kennards described in these reasons for decision occurred in trade or commerce in connection with the supply to Ms Hall, as a purchaser, of services of a kind ordinarily used for personal purposes.
3. Despite the allegation, it has remained unclear to me, after two days of hearing, exactly what conduct is said to have been unconscionable and why it is said to have been unconscionable. In paragraph 27 of Points of Claim dated 3 July 2008 Ms Hall alleged that "in the premises" the conduct of Kennards was unconscionable within the meaning of section 8 of the Fair Trading Act 1999. The paragraphs that preceded paragraph 27 had alleged that Kennards had purported to increase its storage fees but was in breach of the "storage agreement" by doing so, that Kennards had converted some of her goods, and that Kennards had refused to deliver to her the remainder of her goods which it had not converted. In paragraph 2(d) of her Amended Reply and Defence to Counterclaim dated 19 March 2009 Ms Hall alleged that Kennards had "acted unconscionably in purporting to rely on alleged breaches of the storage agreement by the applicant prior to the expiration of 14 days from 9 May 2008". The date referred to in that paragraph seems to have been a mistake for 7 May 2008 when the disputed conversation between Ms Hall and Mr Gullifer took place.
4. I shall assume, in Ms Hall's favour, that in considering her allegation of unconscionable conduct I should take into account all of Kennards' conduct that led to the creation of the written agreement between the parties, that led to the sale of her goods and that consisted of the sale itself. I shall also assume, in her favour, that the remedy to which she would be entitled, if the allegation were to be made out, is an order or declaration that Kennards was not entitled to enforce the provision in the agreement that empowered it to sell the goods, with the result that the sale of the goods amounted to a conversion of them.
5. The courts have adopted a cautious and restrained approach to the application of sections 51 AB and 51 AC of the Trade Practices Act 1974 (Commonwealth), of which section 8 of the Fair Trading Act, and section 8A (headed "Unconscionable conduct in business transactions") are analogues.
6. The concept of unconscionable conduct prohibited by section 8 extends beyond the notion of conduct that is regarded as unconscionable under "the unwritten law" (i.e. under principles of equity) and hence prohibited by section 7: Australian Securities and Investment Commission v National Exchange Pty Ltd [2005] FCAFC 226; (2005) 148 FCR 132. That is to say, the concept of unconscionable conduct prohibited by section 8 is not confined to conduct which, as the perpetrator of the conduct was or should have been aware, took advantage of the other party's special disadvantage (such as intellectual handicap, illiteracy or poor English) in the dealings between them.
7. Nevertheless, when considering whether there has been conduct that has contravened section 8, the courts have been influenced by the approach taken by courts when applying principles of equity, and so have set a fairly high standard for the wrongdoing that is required to amount to a contravention.
8. Accordingly, characterization of conduct as "unconscionable" involves the making of a moral judgment. Speaking of sections 51 AB and 51AC of the Trade Practices Act the Full Court of the Federal Court in Hurley v McDonalds Australia Ltd [1999] FCA 1728 stated (at paragraphs [21] - [27]):

For conduct to be regarded as unconscionable, serious misconduct or something clearly unfair or unreasonable, must be demonstrated - Cameron v Qantas Airways Ltd [1995] FCA 1304; (1994) 55 FCR 147 at 179. Whatever 'unconscionable" means in s 51AB and s51AC, the term carries the meaning given by the Shorter Oxford English Dictionary, namely, actions showing no regard for conscience, or that are irreconcilable with what is right or reasonable - Qantas Airways Ltd v Cameron (1996) 66FCR 246 at 262. The various synonyms used in relation to the term 'unconscionable' import a pejorative moral judgment - Qantas Airways Ltd v Cameron [1996] FCA 1483; (1996) 66 FCR 246 at 283-284 and 298.

1. In Attorney General of New South Wales v. World Best Holdings Ltd [2005] NSWCA 261; (2005) 63 NSWLR 557 the issue in the Court of Appeal was not whether a person had engaged in unconscionable conduct but whether an administrative tribunal was properly constituted, under its enabling enactment, to hear and determine an allegation that a party to a retail lease had engaged in unconscionable conduct. Nevertheless Spigelman CJ made observations, at page 583, about the scope of the concept of "unconscionable" conduct:

Unconscionability is a well-established but narrow principle in equitable doctrine. It has been applied over the centuries with considerable restraint and in a manner which is consistent with the maintenance of the basic principles of freedom of contract. It is not a principle of what "fairness" or "justice" or "good conscience" requires in the particular circumstances of the case. ...

... Unconscionability is a concept which requires a high level of moral obloquy. If it were to be applied as if it were equivalent to what was "fair" or "just", it could transform commercial relationships in a manner which the Minister expressly stated was not the intention of the legislation. The principle of "unconscionability" would not be a doctrine of occasional application, when the circumstances are highly unethical, it would be transformed into the first and easiest port of call when any dispute about a retail lease arises.

1. Spigelman CJ's observations were cited with approval by a differently constituted Court of Appeal in Canon Australia Pty Ltd v. Patton [2007] NSWCA 246; (2007) 244 ALR 759 at page 768 when it dealt with an appeal on the issue of whether there had been unconscionable conduct in contravention of section 51 AD of the Trade Practices Act.
2. So, for the purposes of section 8 of the Fair Trading Act, "unconscionable" is a strong word. It is stronger than "wrong" and stronger than "unfair". It connotes conduct of a kind that attracts moral obloquy or an adverse moral judgment.
3. A matter to which I may have regard, for the purpose of determining whether Kennards has contravened section 8(1), is whether as a result of conduct by Kennards Ms Hall was required to comply with conditions that were not reasonably necessary for the protection of Kennards' legitimate interests: section 8(2)(b). Clause 6 of the written agreement, empowering Kennards to sell or dispose of goods in the storage space units, without notice, if fees were not paid within 42 days of the due date, was in my opinion a clause that was more draconian than was reasonably necessary for the protection of Kennards' legitimate interests. A clause empowering a sale or disposal after that period of default, but after reasonable notice in writing of an intention to sell if the default was not remedied, would have been more reasonable. But the matter identified in section 8(2)(b) is not merely the existence of the unreasonable condition and the requirement to comply with it. It is also the causal connection between the requirement to comply and the supplier's conduct that led to the requirement. What section 8(2)(b) seems mainly to be directed towards is conduct that led to the purchaser entering into a contract that contained the unreasonable conditions. Apart from the allegation (which I have rejected) that a misrepresentation about late payment fees induced Ms Hall to enter into the written agreement, there was no other allegation, and certainly no evidence, of any conduct by Kennards leading to the signing of the written agreement that could attract such an adverse moral judgment that the conduct was unconscionable.
4. Until October 2007 Kennards, in accordance with its usual practice, did give Ms Hall written notice of an intention to sell if her default in payment of fees was not remedied, even though clause 6, unreasonably, empowered it to sell without notice. It would have been better and fairer for Kennards to have given further written notice, or indeed any notice at all, in (say) late April 2008 before selling, as it did, on 12 May 2008. With or without such notice, it would have been better and fairer for Kennards to have told Ms Hall that it had obtained offers to purchase from second hand goods dealer and had given her one final explicit ultimatum that if she did not pay the fees or remove the goods by a certain deadline a sale to a dealer would proceed immediately thereafter. Saying that, however, is a long way from saying that the sale in the absence of such a further notice or warning was conduct attracting such an adverse moral judgment that the conduct was unconscionable. The fact is that the written agreement between the parties, however unreasonably, empowered Kennards to do what it did.
5. In my opinion the only conduct that even comes close to being characterized as unconscionable is Mr Gullifer's conduct that resulted in Kennards' records containing false information about the sending of letters and notices to Ms Hall after November 2007. That conduct led in turn to the "Certificate of Compliance" and the "Notification of Delinquent Compliance" falsely stating that notices to dispose had been sent to Ms Hall in December 2007. Mr Birch acted upon that false information when authorizing the sale of Ms Hall's goods.
6. If I had found that at the time of sale either Mr Birch or Mr Gullifer knew that the information in those documents was false, the submission that there had been unconscionable conduct in contravention of section 8 of the Fair Trading Act would have had much greater strength. My findings have been otherwise. I have found that Mr Birch did not know. I have found that Mr Gullifer was careless as to whether the information was true or false, but have stopped short of finding that he knew that it was false. Moreover, the information in the documents on which Mr Birch acted, although false, did not greatly distort the truth, for notices to dispose had in fact been sent to Ms Hall on 17 October 2007, not in December 2007.
7. For those reasons I reject the submission that Kennards engaged in unconscionable conduct in contravention of section 8 of the Fair Trading Act.

1. Having rejected all of the arguments and submissions put on her behalf, I have determined the issue of liability against Ms Hall, so far as it was canvassed before me. I repeat that the question of whether Kennards breached a duty to take care to obtain a proper price for the sold goods has yet to be canvassed and determined. If it is canvassed at a further hearing and determined in Ms Hall's favour, she will succeed on the issue of liability. Otherwise, she will fail and the proceeding should then be dismissed.
2. I propose now to answer the questions in the list of agreed questions, or at least most of them. I do not answer question 11 because I think that the question is premature. The question is whether Ms Hall is liable to pay damages pursuant to her undertaking as to damages which she gave when obtaining an interlocutory injunction. If she succeeds on the matter referred to in the previous paragraph which is to be the subject of a further hearing, or even if she does not, she would be entitled to argue that the injunction was still properly sought and granted. I make no comment as to the likelihood of the argument succeeding. If she does succeed on the matter referred to in the previous paragraph, the sale would not have amounted to a conversion, and so I think it is appropriate to answer question 6.
3. The questions, and my answers, are:

Question 1. What were the terms of the storage space hire agreement between the parties made on 22 November 2005?

Answer. The terms were those set out in the written agreement between the parties dated 22 November 2005.

Question 2. What were the terms of the storage space hire agreement as varied in early 2006?

Answer. The terms were the same as the terms expressed in the answer to question 1, except that the agreement applied to unit 158 as well as to unit 153 and the monthly storage fee payable in respect of each unit was $500.00.

(a) Was the Respondent entitled to increase the storage fee under the storage space hire agreement?

(b) If so, was the increase to the storage fee by the Respondent in 2007 effective?

Answer: The increase to $575.00 per month in respect of each unit, notified in January 2007, was effective. Otherwise, no.

(c) If it was not, is the Applicant entitled to recover any payment she made?

Question 4. Was the Respondent in possession of the Applicant's goods under the storage space hire agreement?

(a) Was the Respondent legally obliged to return the Applicant's goods under a bailee and bailor relationship?

Answer. No, there was no bailee and bailor relationship.

(b) If so, did the Respondent wrongfully retain the Applicant's goods?

Answer: In view of the answer to part (a), no answer is required.

Question 6. Has the Respondent converted the Applicant's goods that were stored in the self storage units?

Question 7: Has the Respondent breached the storage space hire agreement?

Question 8. Has the Respondent acted unconscionably within the meaning of section 8 of the Fair Trading Act 1999?

Question 9. Was the Respondent estopped from relying upon any alleged breach of the storage space hire agreement by the Applicant prior to the expiration of 14 days from 9 May 2008?

Answer No (irrespective of whether 7 May, not 9 May, was meant in the question).

Question 10. Has the Applicant breached the storage space hire agreement?

Answer Yes, in that she has not paid all moneys due under it.

Question 11 Is the applicant liable to pay damages pursuant to her undertaking as to damages given on 23 May 2008 when obtaining an injunction against the Respondent?

Answer It is premature to answer this question, so it is not answered.

(a) Was the Respondent a "warehouseman" under the Warehousemen's Liens Act 1958?

(b) If so, did the provisions of the Warehousemen's Liens Act 1958 apply to the Respondent in respect of any goods stored under the storage space hire agreement?

Answer: No, although in view of the answer to part (a), no answer is required.

(c) If so, has the Respondent breached any of the provisions of the Warehousemen's Liens Act 1958?

Answer: In view of the answer to part (a), no answer is required.

(d) If so, does any such breach disentitle the Respondent to recover damages from the Applicant?

Answer: In view of the answer to part (a), no answer is required.

1. So that outstanding issues may be heard and determined, I shall order that this proceeding shall be listed for further hearing on the issue of liability and that the cross claim shall be listed for further hearing at the same time. So far as the cross claim is concerned, I envisage and shall order that there be a hearing on the question of the amount which remains owing by Ms Hall to Kennards for fees.
2. I shall reserve liberty to apply in the meantime, for it may be that the parties want the outstanding issues to be determined in some other fashion, or want them not to be determined at all.