[1999] TASSC 48

HEARING DATES: 9, 10, 11 December 1998 and 20, 21 April 1999

Estoppel - Estoppel in pais - The representation - Inducing detrimental change of position - Detriment - Whether the defendant is estopped from denying that the condition precedent as to finance was satisfied by mistaken assertion by its solicitor that it was - Whether the plaintiff suffered detriment or an alteration of its position as a result of a belief that finance was approved.

Estoppel - Estoppel in pais - Distinction from other doctrines - Whether the defendant had waived the operation of the condition precedent - Subject to finance clause by agent mistakenly asserting that it was fulfilled.

Di Lione v Turco [1982] Qd R 224; Zieme v Gregory [1963] VicRp 34; [1963] VR 214, referred to.

Judgment ID Number: [1999] TASSC 48

J BOAG & SON BREWING LTD v BRIDON INVESTMENTS PTY LTD,

1 The plaintiff is the owner of the Beach Hotel in Burnie. Prior to June, 1996, a decision was made to sell the property and in that month a document was prepared by the plaintiff's estate agents giving particulars of it and of its operations for the purpose of attracting potential purchasers. The second and third named defendants were Queensland businessmen who became interested in purchasing the property and the business carried on therein. Ultimately the first named defendant was incorporated and became the vehicle which was the actual purchaser nominated in a conditional contract of sale, the second and third named defendants guaranteeing its performance of any contractual obligations.

2 In early December, 1996, the second and third named defendants had indicated to the plaintiff's estate agent their willingness to purchase the property. By a letter of 4 December 1996 addressed to the second named defendant, Mr Gough, the estate agent set out in broad terms the substance of the transaction. Of course, at this stage the agreement had not become a final one and a number of terms remained open to negotiation. What was contemplated in the letter of 4 December 1996 (D9) was a purchase price of $1,910,000, plus stock at valuation, with $250,000 of the purchase price being paid on possession being given, and the remainder of $1,660,000 being paid within twelve months. The purchaser was to take a lease of the premises for twelve months, at the end of which period the purchaser was to purchase the freehold. What was described as the "settlement date" was to be 20 January 1997 and stock was to be paid in full within seven days thereof. The vendor was to pay for all expenses associated with the implementation of gaming machines and was to complete all orders on the hotel currently issued by the Licensing Board. A deposit of $25,000 was to be paid on signing the contract. A number of other standard conditions were mentioned but need not be set out now.

3 Messrs Dobson Mitchell and Allport were engaged by the plaintiff company to act for it in the anticipated sale and the defendants engaged Messrs Grays, Lawyers of Brisbane. Miss French (later to become Mrs Daly) had carriage of the matter for the plaintiff/vendor and Mr Gray, and later Miss Tien Nguyen, had carriage of it for the defendant/purchaser. A number of letters were exchanged between the two firms of solicitors in December 1996 and January 1997. By 7 January 1997, Mr Gray had indicated, among other things, that his client had made an application for finance, that contracts would need to be made subject to a fourteen day finance period and settlement should be stated to be twenty-one days after confirmation of finance approval.

4 On 4 February 1997, Dobson Mitchell and Allport sent to Grays a sale agreement "which is to be photocopied and to have the lease previously sent annexed to it as annexure A and the list of chattels annexed as annexure B". Miss French's letter went on:

"The agreement and each annexure page are to be executed by the purchaser and returned to me by Wednesday 5 February."

On 5 February 1997, the defendant signed the agreement upon which the plaintiff is suing and sent the execution page by facsimile to Dobson Mitchell and Allport. A facsimile copy of the deposit cheque of $25,000 was also sent. These documents were then despatched by courier. There were some other variations to the document a day or so later but nothing I find turns on this.

5 The contract signed by the defendants bears date 5 February 1997. It provided for the sale of the goodwill, the freehold, the chattels and the stock of the business. The purchase price for the property other than stock was $1,910,000 and payment was to be made by a deposit of $25,000 to the estate agent as stakeholder on the signing of the agreement and to be released to the vendor on the Settlement Date, a payment of $225,000 was to be paid to the vendor on the settlement date and the balance of $1,660,000 was to be paid to the vendor on completion. There was a separate provision in respect of stock which was to be valued on the settlement date and the price paid within seven days thereof. The provisions in respect of completion were that the purchaser was to take possession of the premises and chattels as lessee 21 days after satisfaction of the condition precedent referred to in cl 5.2(b). This was to be "the settlement date". The transaction was to be completed on 20 January 1998 when on payment of the balance purchase price the purchaser would become the owner of the freehold and chattels.

6 Clause 5.2 provided "The following matters are conditions precedent to the completion of this agreement:" - there then follow four conditions, the second of which, and one of most significance to the resolution of this matter, is:

"(b) That LEX Nominees Pty Ltd ACN 073 985 903 makes available to the Purchaser, who must use reasonable endeavours to obtain the same, a loan to a maximum of $800,000 upon terms currently available in transactions of a similar nature within fourteen days of the date of this agreement."

7 The vendor company did not contemporaneously execute its counterpart of the agreement. The seal of the company was affixed on 13 February and it was thereafter signed by two of the directors, but neither of them could remember on what date. It bears date 5 February 1997 but was not despatched to the plaintiff's solicitors until on or a little before 25 February 1997. Although at the commencement of the hearing the plaintiff sought and obtained leave to amend its pleading from an allegation that the parties entered into the agreement on or about 5 February 1997, to one alleging that the agreement was constituted by an exchange of counterparts, one being executed by the defendants and delivered by them to the plaintiff on 6 February, and the other being executed by the plaintiff and delivered by mail to the defendants on 25 February 1997, counsel for the plaintiff, in his final address, abandoned that contention and reverted to the contention originally pleaded. Leave for him to do so was given in the course of the final address of counsel for the defendants. The latter did not concede that there was a contract between the parties as ultimately contended for by counsel for the plaintiff, whose position was that the contract came into existence by the acceptance of the vendor's offer constituted by the agreement sent on 4 February 1997 by the execution of the document bearing date 5 February 1997 and its despatch on that or the following day by the plaintiff's solicitors to the vendor's solicitors. Mr Weld for the defence pointed out that on 7 February an amended page to be inserted in the list of chattels was despatched by facsimile. In my view, it is not necessary to determine the precise process by which the contract came into existence and whether the last mentioned document constituted a variation to it. I find that the agreement dated 5 February 1997 put in by the plaintiff as exhibit P2 evidences the terms of the contract agreed upon. I find that it was the intention of the parties that it speak from this date and that the 14 days for the fulfilment of the condition precedent in respect of finance ran from that date to 19 February 1997. On the latter date, finance had not been confirmed. It was not "available" within the meaning of cl 5.2(b), the proposed financier not having committed itself to making the sum in question available. On that day, Miss Nguyen, I find, telephoned Miss French and told her (in terms of a file note made by Miss French):

"They haven't got confirmation of finance yet and are seeking an extra week to confirm. She says it is taking time to get the documents prepared and do credit checks. I say that I will need to get instructions from my client and let her know."

Miss French thereupon rang Mr Riley, the secretary of the plaintiff company, relayed that message and request and was told that Mr Riley would speak to another officer of the company and would let Miss French know about the requested extension. Miss Nguyen claimed in evidence that Miss French had contacted her and granted the extension, but Miss French denied this and said that she never received instructions to grant the extension. In her view, the need for it was overtaken by an event which occurred on 21 February 1997. For reasons I will expand later, where there is a conflict between the evidence of Miss Nguyen and that of Miss French, I accept the evidence of the latter. It is, I think, common ground that as at 19 February 1997 finance had not become available within the meaning of cl 5.2(b). In any event, I so find.

8 On 21 February 1997, Miss Nguyen telephoned Dobson Mitchell and Allport and asked to speak to Miss French, who was not then available. The message taken by the receptionist and recorded on a telephone message form was "Finance has been approved for the Beach Hotel" (exhibit P1). Later that day, Miss French telephoned Miss Nguyen who told her that finance had been approved for the Beach Hotel and discussed a possible settlement date of between 10 and 12 March. Miss French made no diary note of this conversation, but wrote notes on P1 which she then had to hand. Miss Nguyen made two relevant entries in respect of this conversation. The first (exhibit D6) is "Advised finance OK, but need to confirm." This is recorded on a telephone attendance form. The second is a file note dictated by her in respect of a number of conversations of that day. It is exhibit P28 and reads as follows:

"Attendance on Don Gough who came into the office to sign documents and find out progress.

He requested that I contact Paul Triscott to find out whether finance has been approved.

I spoke to Paul Triscott who wanted further documents to be supplied, namely searched for all the properties that will be mortgaged, and also a management agreement as he was concerned that Brian has not had any hotel experience.

I asked Paul Triscott whether finance had been approved and he replied that it was. He said that it was OK to let the vendors solicitors know that finance had been approved.

I called Brian Downs to let him know that finance had been approved but we were still waiting for Paul Triscott to get back to us on the exact figure. I also mentioned that we need to perform property searched as requested by Paul Triscott. Brian said that it was OK to go ahead. He asked me to raise the issue of the cost the second valuation with Paul Triscott.

I contacted Sarah French and left a message that finance had been approved.

Received a telephone call from Sarah French to find out the settlement date. She proposed 10/3/97 and I informed that Don was working on Monday 7/3/97. She said that she would inform her clients and await to hear from us.

I prepared a management agreement and arranged for Don to sign tomorrow."

Having regard to the documentary material as well as the demeanour of each witness, I have no hesitation in finding that Miss Nguyen did advise Miss French on 21 February 1997 that finance had been arranged and that her advice was not qualified by any stated need to confirm. Perhaps that notation was, as suggested by Mr Blow QC for the plaintiff, merely an aide memoire to herself, but it is not an accurate record of the conversation.

9 Miss French then advised Mr Riley that finance had been confirmed and discussed a possible settlement date between 10 and 12 March 1997. On 25 February 1997, that is the following Tuesday, Miss Nguyen telephoned with advice recorded by Miss French in P4 that:

"... finance has only come in at $730,000.00 rather than $800,000 based on the valuation. She says the settlement may be delayed. I say that she has already confirmed the condition relating to finance to me and I have advised my client. Also we take the view that the contract is unconditional and will expect completion within that time frame. She says yes that they are still aiming to settle on the 10th but she needs to check with her client."

Miss French then telephoned Mr Riley and recorded that attendance as follows:

"I say that finance was confirmed last week and we were talking about a settlement date of the 10th of March. Their solicitor is now saying that they have only got approval for $730,000.00 rather than $800,000.00. She is still aiming to settle on the 10th of March but has mentioned about getting further instructions from her client as to whether they want to proceed. I have advised her that we take the view the contract is unconditional and will expect completion. Pat says to take a hard line on it. I say that I will send a fax to her today confirming that finance was confirmed and we are expecting completion on or before a particular date."

10 It was after these two conversations that Miss French wrote the letter enclosing the counterpart signed by the vendor company. In that letter she said:

"I refer to our telephone conversation of 25th February 1997.

I note that you advised me on 21st February 1997 that finance had been confirmed in accordance with clause 5.2(b) of the Sale Agreement.

On that basis we subsequently discussed a settlement date of between Monday the 10th of March 1997 and Wednesday the 12th of March 1997.

The Vendor requires settlement on or before Wednesday the 12th of March, being twenty one days from the date upon which the condition relating to finance was to be confirmed.

Please advise as soon as possible whether you require settlement before that date.

I enclose your client's counterpart of the Sale Agreement and note that I am holding the executed Licence Deed."

11 The vendor and its advisers were clearly at this time taking the position that the contract was already in existence, that the condition precedent in respect of finance was fulfilled and that the purchaser was bound by its terms to settle 21 days thence - all before the despatch of the counterpart. This is quite inconsistent with the plea, amended at the beginning of the hearing, that the contract came into existence by the exchange of counterparts. I find that the contract came into existence on 5 February and that the execution of the counterpart by the purchasers and its presentation with the deposit to the vendor's solicitors evidenced it so as to make it enforceable against the purchasers according to its terms. It follows that the time for fulfilment of the condition precedent was 19 February and that as it was not in fact fulfilled on or by that day, the contract did not, on that day, become binding. Furthermore, although the purchasers sought an extension of time for its fulfilment, the vendor, whose solicitor's evidence on this point I accept, did not grant an extension of the time to obtain finance until 26 February, although I have no doubt that but for the events of 21 February, the vendor, which was anxious for the sale to go through, would have been quite happy to extend time further. Indeed, all its dealings thereafter until notice to complete was given in June 1997, indicate a willingness to complete if only the purchasers could find the necessary finance.

12 Thereafter, on 27 February, Miss Nguyen told Miss French that "She is still waiting on her clients' instructions as to the completion date. She should get those this afternoon. She says they are still looking to settle that week." On 28 February, Miss Nguyen left a message for Miss French, "No further instructions received from client re settlement date. Will let you know as soon as date is known." On 5 March, she advised Miss French, "Seeking alternative finance - tomorrow afternoon. Two and a half weeks after that can settle. Lex Nominees not to know looking elsewhere." In a file note, Miss French recorded the conversation as follows:

"She says her client is seeking alternative finance and they should know by tomorrow. She wants an extension of time on the settlement for two and a half weeks. I say that a date of the 24th has already been discussed. She doesn't want the original financier Lex Nominees to know that they are looking elsewhere and ask me not to tell them that if anyone from their rings or even to let John Blacklow know. She does think John knows they are looking elsewhere anyway. I want her to put in writing to me the current progress and her request for the settlement date to be extended. She says she will fax something to me this afternoon."

She then spoke to Mr Riley and recorded the conversation as follows:

"I say that I have spoken to the other solicitor and they are still trying to organise finance. Hopefully they will have a response tomorrow. They are looking for an extension of time to settle for about two and a half weeks. He says they have discussed a date of the 24th of March. I have asked her to put in writing to me the current state of play and the request for extension. He asks whether this will jeopardise the position regarding finance. I say it should actually help Boags' position because it will show that they agree the contract is unconditional and this is to be completed but they are seeking an extension of time. He has looked at the lease and he wants it to commence when the sale agreement settles and to end on the 19th of January. He will get it signed and I will substitute that page so that it refers to a term commencing on a blank date and ending on 19th of January 1998. He wants me to get copies of the Certificates of Currency for insurance as mentioned in the Lease. He says they wouldn't really be able to settle on Monday now anyway. I am still to proceed on the basis that. it is going to be settling within the next couple of weeks."

It is abundantly clear from this documentation that the vendor and its advisers knew that the purchasers did not have finance and that Miss Nguyen's assertion on 21 February that they did (corrected on 25 February) was erroneous. No doubt drawn by Miss French's invitation to confirm in writing, Miss Nguyen sent a facsimile to the former on 6 March saying, "I confirm that our client seeks an extension for the date of settlement until 24 March 1997."

13 On 13 March 1997, Miss Nguyen enquired of Miss French rates of stamp duty for a conveyance and said (as noted by Miss French), "Still looking to settle on 24 March".

14 About this time, Miss French got married and had three weeks leave, the file now being handed to Mr O'Farrell, a partner at Dobson Mitchell and Allport. On 19 March, Miss Nguyen sent another facsimile letter addressed to him seeking a two week extension for the date of settlement to 7 April 1997 and saying, "We understand that the agent has contacted you directly regarding the problems our client has been having with financiers". The extension was granted by letter dated 24 March 1997 but reserving the vendor's rights to take any action necessary to enforce the agreement.

15 On 4 April 1997, Mr O'Farrell wrote to Grays asking whether the purchasers were able to find alternative finance and insisting upon settlement taking place. The matter dragged on through May and June without settlement taking place, without any assertion by the purchasers that finance had been arranged and without their taking any formal step purporting to repudiate or terminate the contract. Eventually, by certified mail on 26 June 1997, Miss French (now Mrs Daly) sent to the first named defendant company a Notice to Complete on or before 11 July 1997. In the Notice she asserted that the vendor "is ready, willing and able to complete all matters to be performed by it as at the date of settlement made under the sale agreement dated 5/2/97 made between you and the vendor ('the contract') and to allow you to take possession" etc. It called for payment of the remaining $225,000 and delivery of an executed lease.

16 On 2 July 1997, Grays replied (P22) saying (inter alia), "We advise that our client has elected to terminate the contract and is willing to release your client from its contractual obligations under that contract of sale dated 5.2.97". By facsimile letter of 28 July 1997, Mrs Daly advised Grays that "since the purchaser did not complete the settlement on 11 July 1997 in accordance with the Notice to Complete, the purchaser has repudiated the sale agreement and the vendor elects to accept that repudiation. The vendor will now be seeking damages from the purchaser." This action followed, the writ being issued on 17 September 1997.

17 A crucial issue in this action is whether the condition precedent in respect of finance was fulfilled at any material time. I have indicated already that I find Miss Nguyen told the vendor's solicitors on 21 February 1997 that finance had been approved and that she was in error but corrected that error on 25 February 1997 - corrected it, not in the sense of acknowledging the earlier statement as having been made and being wrong, but rather asserting that her clients had not got confirmation of finance yet (see Miss French's diary note, P3).

18 The finance clause is a little obscure. Although literally it says that LEX Nominees is to make available to the purchasers a loan to a maximum of $800,000 within 14 days of the date of the agreement, it is inconceivable that the parties would have understood that to mean that the loan was to be advanced by that time. It is not clear on the face of the contract of sale whether the loan is to be advanced on or by the settlement date to enable payment of the sum of $225,000 and the cost of the stock, or whether it is only to be advanced on or by the date for completion when a further $1,600,000 plus was to be paid, obviously by the latter date, but not before, the security of the hotel's freehold would have been available. The correspondence file of Mr Triscott, a Queensland solicitor who was approached by the defendants and who was the power behind LEX Nominees Pty Ltd, reveals, however, that they were seeking a loan of $800,000 to be secured on two Queensland properties and one property in South Australia which were owned by one or other of the second and third named defendants, the purpose of the loan being to discharge existing encumbrances thereon to the value of possibly $380,000, to meet the sum of $250,000 payable in respect of the deposit and the amount payable on entering into the lease on settlement date, to provide working capital of approximately $100,000 and to meet interest payments for twelve months on the loan, plus legal expenses, stamp duty and commission. Mr Triscott was approached in the latter half of January 1997 and on 31 January made an offer by letter of a loan facility of $800,000 or 70 per cent of valuation, whichever was the lower, on certain terms. The letter specified that it was not to be construed as a binding agreement to make the advance. A commitment fee of $1,500 was required by Mr Triscott and paid by the defendants.

19 On 19 February 1997, Miss Nguyen wrote to Mr Triscott sending certain documentation required by him and stating, "We note that you are awaiting a valuation of the South Australian property. We request that you advise our office as soon as finance has been approved so we can inform the vendors in turn." On 21 February, Mr Triscott sent a facsimile to Grays saying that he was expecting a response that day to a request made by him for a check valuation to be made by a South Australian valuer in respect of the property in that State owned by Mr and Mrs Downs. According to Miss Nguyen's file note of that day already set out (P28), he spoke to her by telephone and confirmed finance had been approved. There was some uncertainty about the cost of a second valuation. Whether or not there was some misunderstanding between Miss Nguyen and Mr Triscott I am unable to say, but as I have found, as a result, Miss Nguyen confirmed the availability of finance to Miss French at a time when the purchasers had no legally binding commitment from Mr Triscott to make the money available and they did not, on any view, have confirmation by 19 February 1997.

20 On 24 February 1997, Mr Triscott received, by facsimile, a valuation of the South Australian property. The same day he advised Mr Gray that the valuations were less than anticipated and only supported an advance of $730,000. However, by facsimile he advised Mr Gray that he was prepared to consider issuing another letter of offer incorporating repayment of the loan interest in arrears rather than in advance, as had been originally offered, but with an increase in the interest rate of one-half of one per cent. Mr Gray replied that he understood the only issue outstanding had been the value of the South Australian property. In his letter dated 26 February 1997 (D4, folio 21), he wrote:

"... in that regard a suitable valuation has been obtained by a valuer working in the particular geographical area and he has referred to current sales. The contrary valuation obtain from Herron Todd White should be excluded accordingly. In these circumstances, my clients are relying on the original letter of offer and the representations made in relation thereto and I request your urgent advice that, that is still on offer."

21 Mr Triscott replied on 27 February (D4, folio 25) saying (inter alia):

"1 The Letter of Offer was accepted on the basis of the prepayment of interest for twelve months. After deduction of interest the amount available to client would have been in the order of $720,000.00"

"4 The only issue is whether your clients wish to prepay the interest or wish to have the interest paid in arrears. We assume the latter because that would at least give them the same amount of cash they would have had had the valuations of the properties all have stacked up."

Point 5 contended that the increase in the interest rate was the equivalent of the lower rate paid 12 months in advance. The letter concluded:

"The position now as it stands is as per our facsimile of 26 February that is that the offer that was set out in our facsimile to you of 25 February will lapse after 12 pm today."

On 27 February, he sent a facsimile to Grays saying:

"We understand from the broker that your client does not wish to proceed with the offer of finance - see our fax of the 25/2/97. The offer is hereby withdrawn."

22 In the light of this correspondence, I find that cl 5.2(b) was still not fulfilled at any material time prior to 28 February. Mr Downs gave evidence, which I accept, that prior to approaching Mr Triscott, he and Mr Gough had sought finance from the Commonwealth Bank and the National Bank, but had been refused. They reapplied to both banks after Mr Triscott declined to advance the $800,000, but were again refused. In any event, the condition precedent required LEX Nominees Pty Ltd to be the provider of the finance.

23 Although time is not expressed to be of the essence in relation to cl 5.2(b), I infer that it was understood by both parties to be of the essence. The nature of the subject matter, that is the purchase of a going hotel business on an initially short term lease basis is such as to justify the drawing of that inference (see Voumard's Sale of Land, 5th ed, par9370 at p58; Summers v Cocks [1927] HCA 46; (1927) 40 CLR 321 at 325). The purchasers had already failed to procure finance from two leading banks and had approached a private lender. They were (subject to other conditions set out in the contract) under an obligation to settle within 21 days of the condition as to finance being satisfied and to pay over $225,000 in cash and enter into possession of a hotel under the terms of a lease. If they could not get the assurance of finance within 14 days of the date of the contract, it seems clear they could not complete the initial part of the transaction, viz fulfilling their obligations on the settlement date. The unavailability of finance by the stated date entitled them to treat the conditional contract as at an end (cf James v Walton [1966] WAR 139). Of course, it was open to both parties to waive insistence upon finance being available by 19 February 1997 and had finance become available, almost certainly they would have proceeded to effect the transaction as contemplated by the contract. But the fact is that finance of $800,000 was not available from LEX Nominees Pty Ltd or from any other source at any time before the Notice to Complete was given.

24 It is true that LEX Nominees Pty Ltd, through Mr Triscott on 24 February, indicated a willingness to consider a loan of $730,000 with interest in arrears rather than a loan of $800,000 with interest in advance. But as Mr Downs said in cross-examination, "$730,000 wasn't of any use to us". He claimed they needed $800,000. His reasons for saying this and the need for receipt of this sum with the interest prepaid thereout were not explored or challenged and I see no reason to go behind his evidence and to find that what was on offer was tantamount to the finance contemplated in the condition precedent or that there was any unreasonableness on the defendants' part in not continuing with negotiations which might have resulted in LEX Nominees Pty Ltd committing itself to lending $730,000 with interest in arrears. I am quite satisfied, therefore, that the condition precedent was not fulfilled by the time specified in the contract or at any later time. The mere fact that the purchasers' agent, Miss Nguyen, erroneously asserted on 21 February that finance was available does not amount in itself to a fulfilment of the condition.

25 The plaintiff pleads that if cl 5.2(b) was not satisfied, as I have found it was not, then the first named defendant is estopped from denying that the condition was satisfied by reason of a number of matters. First, the plaintiff relies on the fact that Miss Nguyen, on its behalf, expressly represented that finance was confirmed. That is so, but the true position was revealed to the vendor on 25 February and the vendor did nothing to its detriment or in any way altered its position by reason of a belief in the truth of the representation.

26 Mr Blow QC, for the plaintiff, relied on Di Lione v Turco [1982] Qd R 224. In that case, a contract of sale was made subject to finance being granted to the purchaser within 14 days of its date. Through a misunderstanding, the clerk for the solicitor for the purchaser advised the vendor's solicitors by letter sent within the 14 day period that the purchaser had obtained finance, the vendor's solicitor performed certain work valued at $200 in anticipation of due completion, but four weeks later was advised by the purchaser's solicitor that finance had not been approved, as was in fact the case. The Full Court of the Supreme Court of Queensland held that the representation had created an estoppel and that the purchaser could not rely on the fact that finance had not been obtained within the meaning of the condition. Douglas J, commenting on the fact that the trial judge had said that if the detriment suffered is of a minor nature, there is no estoppel, adopted (at 227) this statement from Spencer Bower and Turner on Estoppel by Representation, 3rd ed, par110, p104:

"The alteration of position which it is incumbent on the representee to establish must involve a change in the practical or business affairs or condition of the representee. Similarly the 'damage', 'loss', or 'prejudice' which the representee must show to have resulted, in a natural chain of causation, from the alteration of position means, and means only, actual and temporal damage, - some loss of money or money's worth, which admits of quantification and assessment. But, provided the above characteristic is present, alteration of position to the prejudice of the representee may assume an infinite variety of forms: it is not limited to such changes as a direct, instantaneous, and palpable loss of money on a single payment or transaction, which is the most ordinary instance, but includes also those in which the detriment, though less gross and obvious and easily calculable, is equally real."

27 In the present case, there was no change in the practical or business affairs or condition of the representee. Miss French advised the company secretary, Mr Riley, that finance had been confirmed and there was a discussion about a possible settlement date of between 10 and 12 March. There was no evidence that this discussion led to any alteration in the vendor's position. It was no more than a discussion relevant to when the lease might commence and the intended new licensee come onto the premises a week prior to the settlement date for the purposes of being introduced to the business and its clientele, provision for which was made in the contract.

28 Even if the vendor company refrained from putting the property immediately back on the market because of such a belief, there is no evidence that it lost the opportunity of a sale between then and the day on which the true position was revealed. However, Mr Riley confirmed that the plaintiff company was happy with the sale to the defendants, was willing to extend time if there was a delay in organising the finance and that there were no other purchasers "hovering at the door waiting to buy". That representation, corrected after a few days, is insufficient to raise an estoppel.

29 Second, the plaintiff claims that by requesting, on 6 March 1997, an extension of time for the date of settlement, the defendant, by implication, represented that the condition precedent was satisfied. That request was made in circumstances where Miss French knew full well that finance was still not arranged, as Miss Nguyen told her at the time that the purchaser was seeking alternative finance. Then it is said that in reliance on the representation of Miss Nguyen on 21 February the plaintiff "on 25 February 1997 completed the exchange of counterpart contracts". This is not so. It was not in reliance upon the representation that this was done. The vendor's executed copy was sent after the representation of 21 February had been corrected by Miss Nguyen and after instructions had been given to Miss French to "take a hard line" on the contract. Without intending criticism, I am of the view that the sending of the counterpart was more of a tactic seeking to prevent Miss Nguyen from repairing the position she had created by her erroneous representation of 21 February. The plaintiff also claims that by giving the extension of 7 March, it relied on the representations that finance had been approved. As it then knew full well that finance was not approved, this claim has no substance. The giving of the Notice to Complete is also pleaded as a basis for estoppel because by doing so, the vendor relied on those representations. Because it knew finance still was not approved, this cannot be sustained. The plaintiff also claims an estoppel based on the proposition that it acted to its detriment by refraining from putting the property back on the market between 21 February and 28 July 1997 and as a result lost the chance of selling to another purchaser. I have already commented on the vendor's omission to place the property on the market between 21 February and 25 February 1997. So far as any later period of time is concerned, the vendor deliberately refrained from putting the property back on the market in the knowledge that finance was not available to the purchaser. Initially it did so in the hope that the sale might still be effected and that expectation may have continued until the Notice to Complete expired; but whether it did or simply thought its legal position might be enhanced by not putting it on the market and insisting upon settlement, its decisions were not based on any representation of the purchaser. That it was put to further expense by way of solicitor's costs and real estate agent's costs was similarly occasioned.

30 There is also a plea that if cl 5.2(b) was not satisfied, then by reason of the representations complained of, the first named defendant engaged in misleading or deceptive conduct or conduct that was likely to mislead or deceive within the meaning of the Trade Practices Act 1974 (Cth), s52 and the Fair Trading Act 1990, s14 and that the plaintiff thereby suffered damage. For the reasons already given in respect of the claim based on estoppel, these contentions are not made out.

31 Next, the plaintiff pleads that "as a result of the matters" pleaded in respect of the claim of estoppel, the first named defendant waived the operation of the condition precedent in cl 5.2(b). In argument, Mr Blow confined his submission to the proposition that the clause was waived by Miss Nguyen's communications by telephone on 21 February 1997, that is by her advising the vendor's solicitors that finance had been approved. He submitted that if finance had not been approved, the condition was not self-executing, but should be construed as making the contract voidable at the instance of the purchaser, provided that it had used reasonable endeavours to procure the finance. As to the last matter, I find that the defendants did use reasonable endeavours to procure finance and cannot be criticised for the failure of the condition being fulfilled. Mr Blow referred to Zieme v Gregory [1963] VicRp 34; [1963] VR 214, especially at 222 - 223. I note, however, that the "subject to finance" condition in that case was not expressed, as it is here, as a condition precedent. Mr Blow's submission continued to the effect that the purchaser, having a right to avoid the contract because of the non-fulfilment of the condition, could waive its right to do so, and in fact did so by Miss Nguyen's conduct on 21 February. If the condition was merely resolutive within the meaning of Zieme v Gregory (supra), by seeking and obtaining an extension of the date of settlement (in turn an extension of the time within which to obtain finance), the plaintiff no doubt would have waived its right to immediately avoid the contract by reason of the non-obtaining of finance at the time specified in the contract, but it would not have lost all its rights under the clause. As Jessell MR said in Barclay v Messenger (1874) 43 LJ (Ch) 449 at 456, "a mere extension of time, and nothing more, is only a waiver to the extent of substituting the extended time for the original time, and not an utter destruction of the essential character of the time". (See also Holland v Wiltshire [1954] HCA 42; (1954) 90 CLR 409 at 415 and Tropical Traders Ltd v Goonan (1963 - [1964] HCA 20; 1964) 111 CLR 41 at 52). Hence, had finance become available within the extended time, purported avoidance by the purchaser could have been resisted by the vendor on the basis of the purchaser's waiver, but once the extended time had elapsed without fulfilment of the condition, the right to avoid would have revived (cf, Charles Rickards Ltd v Oppenheim [1951] KB 616). However, it is not the extensions upon which Mr Blow relies, but the erroneous representation that finance had in fact become available. It has been said that "a right is waived only when the time comes for its exercise and the party for whose sole benefit it has been introduced knowingly abstains from exercising it" (per Brennan J (as he then was) in Commonwealth v Verwayen (1990) 170 CLR 394 at 427). The necessity for knowledge of the existence of the right is stressed in Craine v Colonial Mutual Fire Insurance Co Ltd [1920] HCA 64; (1920) 28 CLR 305 at 326, Grundt v The Great Boulder Proprietary Mines Limited [1937] HCA 58; (1937) 59 CLR 641 and Kammins Company Ltd v Zenith Investments Ltd [1971] AC 850 at 883. The purchaser and its agent, Miss Nguyen, were ignorant of the existence of the right to avoid the contract in the circumstances as they existed on 21 February because they believed the condition had been fulfilled. They were ignorant therefore of facts which could have given rise in law to a right to rely on the non-fulfilment of the condition. The representation that it had been fulfilled may have created an estoppel if the vendor had altered its position in reliance upon it, but it does not constitute a waiver of the purchasers' right to avoid the contract by reason of a fact the plaintiff did not then know. To constitute a waiver, the purchasers would have to have known that the condition was not fulfilled, thus making the contract voidable at its instance and to have intentionally acted to forego that right. That is not the case here. The purchasers did not intentionally abandon any right to rely on non-fulfilment of cl 5.2(b) by mistakenly indicating through its agent that that clause had been fulfilled.

32 Eventually, although the purchasers sought extensions, finance could not be arranged and it was unequivocally unable to settle. Once that time arrived (even if not before), it was entitled to rely on the clause. At the very latest, its letter to the vendor's solicitors of 2 July 1997 in which it advised them that "our client has elected to terminate the contract and is willing to release your client from its contractual obligations under that contract of sale dated 5 February 1997" had the effect of avoiding the contract, terminating its obligations thereunder and entitling it to the return of the deposit in respect of a sale which was never concluded.

33 For these reasons I find for the defendants and dismiss the plaintiff's claims. There will be judgment in favour of the first named defendant for the return of the deposit of $25,000 together with interest thereon. I will take submissions about the rate at which and period during which interest should be paid if the parties cannot agree them.

34 Should I be held to be wrong in rejecting the plaintiff's claim on the grounds set forth above, as the defendants have pleaded other bases for avoiding liability, it is desirable that I record my findings on the principal factual matters upon which the defendants rely. By par7 of the defence, the defendants plead the failure of other conditions precedent expressed in the contract. The first pleaded is:

"(a) that there are not at this date any restrictions on the use of the Premises other than those specifically disclosed herein which shall hinder or prevent the Purchaser from using or enjoying the Premises for the purposes of a Licenced [sic] Hotel."

"(a) The Defendants set up and rely upon the Orders dated -

made by the Commissioner for Licencing [sic] under the Liquor and Accommodation Act 1990 in respect of the Premises and says [sic] that the Plaintiff had not at the date of the Agreement on or about the 5th February 1997 in accordance with clause 16.1 thereof or prior to the Settlement Date complied therewith whereby the condition precedent in clause 5.2(a) failed."

I find that the orders mentioned were specifically disclosed as annexure B of the contract. To the extent that the existence of such requisitions may be said to be a restriction on the use of the premises as a hotel, the very fact of their disclosure in the contract excludes them as restrictions to which the condition applies. Reliance, however, is further placed on cl 16(1) which reads:

"16.1 Prior to the Settlement Date the Vendor will comply with orders dated 17 August 1995, 28 August 1995, 4 September 1995, 1 August 1996, 5 August 1996 and 6 August 1996 made by the Commissioner for Licensing under the Liquor & Accommodation Act 1990 in respect of the Premises. A copy of the Orders is annexed and marked as Annexure 'B'."

It is claimed that the orders were not complied with prior to the settlement date or (by a later pleading, viz par21A(1)(iii)) before the issue of the Notice to Complete or before the date set thereby for the settlement to occur (thereby demonstrating that the vendor was not at either of the latter times ready, willing and able to complete).

35 I find that all the requisitions contained in the orders dated earlier than 1 August 1996 were either complied with or were brought forward and included within the requisitions contained on the orders of 1, 5 and 6 August 1996. Of these, all were complied with prior to 5 February 1997, with the following exceptions:

Order of 5 August 1996: Items 1, 6, 9, 10, 13, 15, 16, 18, 19, 22, 24, 25, 28, 30, 31 and 33.

A number of these items were attended to after 5 February 1997 and before the giving of the notice to complete in June 1997, but there were, at that stage, still outstanding the following items:

Order of 5 August 1996: Items 6, 9, 16, 18, 30 and 31

Of these items, the following were attended to after June 1997 at the cost shown:

Order of 1 August 1996: Item 8. This required the repair or replacement of damaged wallpaper on hallway walls - accommodation. Mr Sweeney, the hotel manager, whose evidence I accept, said that this job was completed by Mr Tim Jones when the accommodation was repainted to comply with Order No 10 of 1 August 1996. The purchase order for this was 48374 of 5 January 1998. The cheque payable was for $2,852 on 6 January 1998. This price also includes the painting of the rooms in the accommodation.

Item 6. Replacement of seals on refrigerator doors in the lounge bar. Mr Sweeney said that this work was completed by Commercial and Rural Refrigeration. The temprite in the bar was replaced at the same time. Purchase order 48399 on 31 January 1998 evidences this work being done and a cheque order of 18 February 1998 for $1,583.50 evidences its payment.

Item 9. Replace seals on refrigerator doors in the public bar. This was completed at the same time and included in the cost of item 8.

Item 16. Repair vinyl floor covering in the kitchen. I find that this was completed by Mr Stan Knowles for a total amount of $3,900 which was paid on 10 September 1997.

Item 18. Repair damaged tiles on base of cabinet in the kitchen. This was completed by Mr Knowles at the same time as item 16.

Item 30. Repaint wall surfaces in hallway outside room 17 - accommodation. This work was carried out by Mr Tim Jones at the same time that the hallway walls were painted. The purchase order for this was 48374 on 5 January 1998 and paid for by cheque dated 6 January 1998 in the sum of $2,852.

Item 31. Repair window in room 10 - accommodation. Mr Sweeney gave evidence that the frame was repaired by Burnie Joinery, the purchase order being dated 11 December 1997. It was paid for on 24 December 1997 at a cost of $85.

The evidence is incomplete about the following matters:

Item 24. Replace grazed hand basin in room 3 - accommodation. Mr Sweeney notes that this job was carried out by Barnett's Plumbing, who put in a new basin, but it is not clear when this work was done.

Item 25. Repair edges of bedside table tops in rooms 1, 2, 3, 4, 6, 10, 12, 15 - accommodation. Mr Sweeney indicated that Mr Max Green repaired the strips to the bed side tables, but he was unsure of the time and date that this occurred.

Item 28. Repair or replace vinyl floor covering in bathroom of room 17 - accommodation. It is thought that Mr N J Summers completed this task when he was replacing or fixing the other vinyl floor throughout the hotel at a cost of $924.26, but I am unable to make a finding.

36 The outstanding matters as at June 1997 could have been completed by 11 July 1997. I am satisfied that the vendor was able to complete them and was ready and willing to do so had there been any indication of willingness on the part of the purchasers to complete. However, the letter of 2 July from Grays, to which I have referred, made it clear that the purchasers did not intend to complete and in the circumstances it is not surprising that the vendor omitted to expend energy in doing so by that date.

37 I should record that evidence of the fact and cost of complying with certain requisitions after June 1997 was objected to by Mr Weld for the defendants on the basis of irrelevancy. I received it de bene esse. I rule that it is relevant to the question of the plaintiff's capacity to have complied with the requisitions by the time of settlement.

38 The other conditions precedent set out in cl 5.2 were:

"(c) that the Purchaser obtains a licence under the Liquor & Accommodation Act 1990 to use the Premises as a Licenced [sic] Hotel; and

(d) that the Purchaser obtains a licence under the Gaming Control Act 1993 to operate gaming machines in the premises."

I find that the purchaser obtained neither licence. I accept in its entirety the evidence of Mr David John Thomas, an officer of the Commissioner for Licensing. I note that there was an admission of facts in respect of evidence which Carolyn Jan Marney, an officer of the Tasmanian Gaming Commission, was called to give.

39 By cl 18.2 of the contract, it was provided (inter alia) that the vendor must, at its own expense, install video gaming machines at the premises prior to the settlement date. It is common ground that the vendor did not do so at any material time.