It was common ground that "escribe" was an error and that Mr Sweeney said or meant "escrow" .
17 There was some confusion in the evidence concerning this occasion and an occasion on 6 July 1993 when Mr Long and Mr Piper went to Mr Sweeney's offices.
18 Mr Long and Mr Piper went to Moree on 6 July 1993, provided the licensing documents and a copy of the draft lease, signed at least by Mr Long and Mr Piper, to a clerk at the courthouse, and received a document evidencing an order granting a provisional transfer of the hotelier's licence from Mr Long to Mr Piper for a period of three months.
19 According to Mrs Piper, she and Mr Piper went to Mr Sweeney's offices on the previous day, 5 July 1993, and signed the draft lease. This is consistent with Mr Sweeney's evidence last mentioned. Mrs Piper said that the respondents signed the draft lease because "the next day my husband and Mr Long were going to Moree to make arrangements for a provisional licence in my husband's name" , and at another point that the document "had to be signed in order for the provisional licence to be granted" , which is not so consistent with the reason given by Mr Sweeney.
20 According to Mr Piper, he, Mrs Piper and Mr Long all went to Mr Sweeney's offices because Mr Long said that it was necessary to go to Moree "and that with the application there had to be a copy of the lease so that the liquor licensing or whoever is in charge of that could see there was actually something going to transpire for the licence to be transferred into my name" , and the three of them signed the draft lease. At another point Mr Piper said that he could not recall Mr Long signing the draft lease. Mr Piper said that "the object of this just being signed was purely to go with the application for the licence" , and that it "was only signed by my wife and I just purely for - to - for it to go to the Licensing Commission, the Liquor Licensing Commission" . He and Mr Long went to Moree on the same day. This is not consistent with a separate occasion on 5 July 1993 on which the respondents alone signed a copy or copies of the draft lease.
21 According to Mr Long, he and Mr Piper went to Mr Sweeney's offices and signed "a copy of the lease" which "had to be - accompany the application for liquor licence" . Each signed in the place for signatures and initialled every page. They then went on to Moree, Mr Long was adamant that the document taken to Moree was signed only by himself and Mr Piper. This is not consistent with a separate occasion on 5 July 1993 on which Mr Piper signed a copy or copies of the draft lease. On Mr Long's evidence how a copy or copies of the draft lease came to be signed by Mrs Piper was not explained.
22 Common to these accounts was the perceived necessity for a lease document to accompany the licensing documents, although nothing in the latter documents so stated. I will return to the significance of this to the issue of a concluded agreement for lease: for the present, the question is what happened. The confusion over the occasions is given point by the presence in the evidence of a copy of the draft lease signed only by the respondents in the manner earlier described, plus another copy of the draft lease signed by them in the manner earlier described and also signed by Mr Long. In neither copy are the signatures witnessed.
23 Taylor DCJ found that -
"On about 6 July Mr Long and Mr Piper went to the office of Mr Sweeney, the defendant's solicitor. The lease was at that point apparently signed at least by Mr and Mrs Piper, however, Mr Sweeney's evidence was and the Court accepts, that it was a matter of convenience and he purposely did not witness their signatures because it was not his instructions to communicate to anyone that the matter was finalised. The convenience was the facilitation of the transfer of the liquor licence . Mr Long and Mr Piper co-operated in travelling to Moree to ensure that the licence could be obtained promptly, this was because they would have taken some time to make that arrangement before the Magistrate at Narrabri."
24 His Honour therefore accepted the occasion of signing the draft lease by the respondents on 5 July 1993, and found that the occasion on 6 July 1993 involved only Mr Long and Mr Piper. Mr Sweeney had a file note of the latter occasion reading "attendance on Michael Long, he to lodge papers Moree today" . One explanation, although not expressly found by his Honour, is that the respondents signed a copy of the draft lease on 5 July 1993, then on 6 July 1993 Mr Long added his signature to one of the copies or a copy of one of the copies and the document with three signatures was taken to Moree. Another explanation is that a fresh copy of the draft lease was signed by Mr Long and Mr Piper, although no copy as so signed was in evidence.
25 There was no more explicit evidence of what was said between the parties as to the reason for signing the draft lease, in particular bearing upon whether the signing and provision to the court at Moree was to signify commitment to the grant and talking of the lease. As I have said, I will return to the significance of the perceived necessity for a lease document to accompany the licensing documents.
26 According to Mr Long, after he and Mr Piper had received the document evidencing the provisional transfer the lease document which had been provided to the court was taken by Mr Piper "because his wife hadn't signed it at that stage and he had to take it back to Mr Sweeney" . This is consistent with his evidence that the copy of the draft lease taken to Moree was signed only by himself and Mr Piper. According to Mr Piper, the document "probably stopped with Mr Sweeney because it's a - you know, its got our original signatures on it" .
27 Mr Long and Mr Piper returned to the hotel late on 6 July 1993. Mrs Piper was at the hotel, having "looked after it" while they were away. There took place what Mr Long called a stock take and the respondents called a stock check. According to Mr Long, Mr Piper went through the stock (alcoholic drinks, non-alcoholic drinks, cigarettes, food stuffs and so on) calling out quantities which he (Mr Long) recorded; Mrs Piper helped to count some items. According to Mrs Piper, Mr Long called and she recorded.
28 After the stock take or stock check was completed, Mr Long gave the keys to the hotel to the respondents. According to Mr Long, this followed a conversation with Mr Piper on the way back from Moree -
"Q. Well you tell us in what way it's inaccurate?
A. We did not talk about the liquor licence I said 'Well you're right now to go in' and he said 'Yep' he said 'Everything's right'. I said 'Well if you want to start now, if that's right- whatever you want to do it's yours now - you're ready to go, we'll do the stocktake tonight and you might as well take over from today or from tomorrow morning' and he said 'Yes that's right' and I said 'Well if that's the case I'll grab Annette and the kids and we'll go up and see mum and dad'."
29 Still according to Mr Long, the next day he had a telephone conversation with Mrs Piper about brewery supplies, they agreed that everything was alright, and on the following day he left for Queensland with his family for a holiday. The thrust of Mr Long's evidence was that the respondents entered into possession of the hotel as lessees on the evening of 6 July or on 7 July 1993.
30 The thrust of the respondents' evidence was quite otherwise. Before going to it, some matters of which there was no evidence should be noted.
31 First the draft lease said nothing about taking over stock or payment for stock. There was no direct evidence of conversations between the parties about it, beyond a reference by Mr Long to "Mr Piper and I were going to do it" . Mr Long said that he was just ascertaining quantities, that he "was going to give the Pipers 120 days to pay for the stock so there wasn't any rush to price it" , and that he would have priced the stock "off the invoice" .
32 Secondly, there was no direct evidence of conversations between the parties at this time about, or even referring to, payment of the $1 option fee, of the more significant $89,999, or of the rent payable in advance. I will later refer to Mr Long's evidence of a telephone conversation with Mr Piper on 9 July 1993 concerning the $90,000. Taylor DCJ did not accept that evidence.
33 To go to the respondent's evidence concerning the stock check and handing over the keys, according to Mr Piper on the journey back from Moree Mr Long said that he (Mr Piper) now had a licence -
"Q. And what was said after that?
A. That I could take over any time I like. I said well, you know, we're not taking over or anything until these outstanding items are done. You know, we went through the list or not a written list but a verbal list of the things that were still not done at the hotel and he said, 'Well you know, I'll get these things done, I'll get these things done.' And I said, 'Well you know, you've been saying that for quite a number of weeks and now and nothing's happened.' And further down the track and whatever conversations were going backwards and forth and he's indicated that he - he needed to go away with his wife for a few days and his children before the school holidays were over and said that, "Well, you know, the licence is in my name, that it was quite okay for me to run the hotel.' And I said, 'Well, you know,' I said, 'I can look after it for a few days for you,' but I said I'd have to speak to Lyn first regards to it and I rang - by the time we got down to Wee Waa I give Lyn a ring and mention it to her and she said well, she couldn't see a problem with it, you know. If it's going to help him out, we'll look after it for a few days or up to a week."
34 Mr Piper gave evidence to the effect that the stock check took place to make sure that there was sufficient stock for the period while Mr Long was away, and that the keys were given to the respondents so that they could look after the hotel.
35 According to Mrs Piper, she was telephoned by Mr Piper before he returned from Moree about "a proposal about staying on as a care …" while Mr Long went to Queensland for the balance of the school holidays, to which she was agreeable, and when Mr Long left she and Mr Piper "were there looking after it [the hotel] for him" . Mrs Piper said that "[t]here was to be a nominal fee" for the caretaking, as discussed between Mr Long and Mr Piper, but there was no more detail of that matter and no evidence from Mr Piper of such a discussion. A discussion about a caretaking fee was not put to Mr Long in cross examination, but his evidence earlier described and of what occurred on his return from Queensland was inconsistent with an arrangement for a caretaking fee.
36 Taylor DCJ's findings as to these events were linked with his findings as to the telephone conversation between Mr Long and Mr Piper on 9 July 1993 and as to what occurred when Mr Long returned to the hotel on 10 July 1993. I will go to the later events, also the subject of dispute, before referring to his Honour's findings.
37 Material to the later events, are two file notes made by Mr Sweeney dated 8 July 1993. Both file notes and a letter of that date from Mr Sweeney to Mr Poulton recorded telephone attendances on Mr Piper. One file note recorded Mr Piper's complaints that items of work at least part of the work earlier mentioned had not been attended to by the appellants, together with some other complaints. The other file note recorded that "He wants to pull out of lease" , for reasons to do with but going beyond the failure to attend to the work. By the letter Mr Sweeney informed Mr Poulton that "the lessor has not satisfied many of the stipulations of the lessee pertaining to the proposed lease" , naming five items of work, and that the respondents "will not be entering into a lease agreement until these matters have been attended to and so will not be signing the lease which you are forwarding" .
38 According to Mr Long he telephoned Mr Piper on 9 July 1993, a Friday. His evidence continued -
"Q. And why did you do that?
A. He was to deposit the $90,000 lease money on Thursday into my bank account and I'd rang the bank and it hadn't been done and then I rang him to see why it hadn't.
Q. And what was the conversation you had?
A. Terry answered the phone and I said 'The money hasn't gone into the bank yet' and he said ' No we're not going to go through with it' I said 'Go through with what?' and he said 'With the deal, we're not going to lease the hotel' and I said 'Why?' He - I can't exactly remember the words he used why he wasn't but it was along the lines of 'It's not what you said it was, we're not happy,' it's not - I'm not 100% percent [sic] certain that's what it was but it was along those lines,
Q. Right?
A. And I said 'Are you going to put the money in?' and he said 'No I'm not' and I hung up and rang Mr Po[u]lton."
39 Mr Piper agreed that there was a telephone conversation. According to Mr Piper, however, Mr Long did not ask about the money for the lease, but "was ringing me to find out how things were going at the hotel" . In the conversation Mr Piper told Mr Long of concern "about some things that people had mentioned to me" , and complained that the work earlier discussed had not been done; when Mr Long said he would do the work in the next couple of weeks, "I said you get those things done and I said but until those things are done well we are not going any further and that was about the amount of the conversation that I had with him" ; Mr Piper said that no money would be paid until "these things were done" , in context meaning the work earlier mentioned. Mr Long said that he would be back to do the work as soon as possible, or in the next weeks, and Mr Piper said to get in touch when he had done the work. The implicit intention to proceed when the work was done is not consistent with the file note of 8 July 1993.
40 The appellants submitted that Mr Piper's denial that the telephone conversation of 9 July 1993 was about payment of the $90,000 was effectively undermined by recognition of such a conversation at another point in his evidence. The evidence on which they relied should be seen in context, and was the underlined part of the following cross examination -
"Q. There was no conversation about caretaking on your behalf with Mr Long?
A. Yes there was.
Q. And that he let you in because you had said you had your money to pay for the lease, correct?
A. You asked me before whether I have had dealings with business and whatever, the normal procedure if the lease was to go ahead and whatever I would have paid on that day. Why would he let me in there without any exchange of money?
Q. Because you told him you were going to put it into the account the next day, is that right?
A. I think Mr Long has probably been in business long enough too not to believe somebody in that case.
Q. And that's why he rang you on the Friday morning to see whether it had been done?
A. He rang me to find out how the hotel was going because it was still his."
41 I do not think that the underlined part of this passage does the work required of it. It is not a clear answer, but Mr Piper affirmed that Mr Long had telephoned to find out how the hotel was going, and the answer amounted to rejection of the suggestion that Mr Piper had told Mr Long that the money would be put into the account on the next day on the ground that Mr Long would not have handed over possession on a promise of the money as distinct from the money itself.
42 Mr Long immediately drove back to Pilliga, and went to the hotel on 10 July 1993. According to Mr Long, he asked the respondents "what was going on" , and they said "that they weren't happy with it and they were leaving" and referred to some of the outstanding work. Mr Long's evidence was to the effect that, from earlier discussions, the respondents knew that he was going to do the work the following week and had been happy with that. Mr Long agreed that Mr Piper said to let him know when he had done the work "and we'll let the solicitor know and we will complete the lease" . He gave no evidence of saying anything about payment of the $90,000. According to Mr Piper, Mr Long asked about the work to be done and said that he would have it all done, and Mr Piper said that when it was done "we can look at leasing the hotel … but until those things are done well we are not going any further" . The respondents handed over the takings for the period of Mr Long's absence, and left the hotel. A caretaking fee was not taken: according to Mrs Piper "we just felt that I really didn't want to take any money."
43 Taylor DCJ's findings as to the events of 6 July to 10 July 1993 were not detailed, and were stated in conjunction with his reasoning to his decision. His Honour said -
"Neither Mr Piper nor Mr Long were good witnesses.
Mr Piper was argumentative. Both of them gave the impression that the evidence the Court was going to hear was always to be consistent with their case. The Court looks to supporting circumstances in situations such as that and what is inherently likely or unlikely.
The Court has concluded that it is inherently unlikely that the parties would have moved outside the process being conducted on their behalf by their respective lawyers in effect to settle the transaction. Although the matter had not been completed by 1 July, it is quite clear that both solicitors were attentive to their instructions and were in communication.
Both Mr Long and Mr Piper were experienced in the business of the hotel industry. Mr Long says that Mr Piper telephoned him concerning the non payment of the $89,999. It is commonsense that this would have been preceded by an agreement to pay that sum before the lease was finalised. There is no evidence of this. The work that the Court has seen of the solicitors in this case leads it to conclude that had there been such an agreement it would have been found in the various documents produced by the solicitors. The very strong inference is that the $89,999 contended by Mr Long to be mentioned by him in the conversation is that sum referred to in the lease document. The Court does not accept that Mr Long had an expectation that the sum was to be paid before the solicitors finalised matters. Given Mr Piper's denial that the demand was made there is no recording of it in the contemporaneous solicitor's notes and the inherent unlikelihood that the key money would be paid prior to settlement, the Court had concluded that Mr Long is mistaken about that aspect of the conversation.
The more likely situation is, and the Court so finds, that Mr and Mrs Piper agreed to run the hotel in Mr Long's absence for a few days or for a week. Perhaps this would have continued when Mr Long returned and finalised the detail of agreed works. Settlement would then have taken place. No doubt both solicitors would have been concerned about an early entry into possession, but nevertheless it is likely that a continuity would have been maintained until settlement.
However, although there is evidence consistent with both points of view advanced, the preponderance of evidence favours the defendants. True it is a provisional licence was obtained. A stocktake was conducted and various statutory authorities were approached. These were practical steps to be taken in expectation of the lease being formally exchanged and settled. Some of the matters, as noted, particularly the entry into possession the solicitors would not have been happy with. The early entry into possession was precipitated by the plaintiffs own personal circumstances outside the lawyers' processes. Mr Sweeney's notes indicate that Mr Piper was looking for reasons to avoid the lease once he and his wife decided not to proceed. The Court is satisfied that they reached that decision whilst Mr Long was in Queensland. The Court does not interpret that as an indication that they were thereby acknowledging that they already had a binding obligation. Consistent with the way Mr Piper gave his evidence he appears to have been building a case for an anticipated dispute with Mr Long. The Court accepts Mr Sweeney's evidence the lease documents were signed in the circumstances noted earlier.
The Court has concluded and finds that during the period that Mr and Mrs Piper were in possession of the premises whilst Mr Long was in Queensland was a temporary arrangement and was independent of any obligations that either party had associated with the lease documents."
44 The key findings are that the respondents entered into occupation of the hotel as caretakers and that nothing was said about payment of the $90,000.
45 Implicit in Mr Sweeney's letter of 8 July 1993, although it was not the subject of direct evidence, was that as between Mr Poulton and Mr Sweeney the former was to send an engrossed lease for execution. That Mr Poulton was to do so is further suggested by a form of letter from Mr Poulton to Mr Sweeney dated 12 July 1993 produced from the appellants' discovered documents, which Mr Sweeney had no recollection of receiving and was apparently an unsigned original prepared by Mr Poulton but not sent. It recorded that it enclosed (amongst other documents) "Lease in duplicate, signed by the Lessors" , and asked Mr Sweeney to "let us have the lease when it is executed, to have duty assessed on it." The letter included, "We note that the premium payable under the lease, with option fee of $90,000.00 is to be paid direct into the Lessors' account at the National Australia Bank Dubbo Branch."
46 There is no point in going into details as to further events. The respondents declined to proceed, and in due course the appellants sued them.