See also Maher v Waltons (1987) 164 CLR 387 in relation to estoppel.
33 It is not clear beyond doubt that s 54A(1) is applicable.
34 The second defendant also submitted that on the facts pleaded, this is a case of one of two co-owners, being one of two tenants in common, purporting to grant a lease of the whole estate to the plaintiffs. In these circumstances, while the lease is on foot it binds the first defendant, but does not bind the second defendant, whose rights to go onto and enjoy the land are unaffected. The option, if it is enforceable at all, does not bind the second defendant. That depends on whether there was ratification and whether the second defendant authorised the lease and what were the terms of the lease. These are matters for evidence.
35 The plaintiffs also allege that the second defendant engaged in conduct which suggested to the plaintiffs that she was intending to honour the contract and that this conduct amounts to misleading and deceptive conduct in accordance with s 42 of the Fair Trading Act (NSW) 1987.
36 The plaintiffs need to establish firstly, conduct on the part of the defendants; secondly, conduct that is misleading or deceptive; thirdly that there was reliance on the conduct; and fourthly, loss or damage caused by the conduct - see Ronald Wallace Gould and Another v Peter Vaggelas and Others (1984) 157 CLR 215 and Jebeli v Modir and Golyaei [2005] NSWCA 184.
37 In Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546, Lockhart J, at 556, said of s 52 of the Trade Practices Act 1974, which is in identical terms to s 43 of the FTA, except that the s 52 applies to corporations:
"Misleading or deceptive conduct generally consists of representations, whether express or by silence; but it is erroneous to approach s 52 on the assumption that its application is confined exclusively to circumstances which constitute some form of representation. The section is expressed briefly, indeed tersely, in plain and simple words…[t]here is no need or warrant to search for other words to replace those used in the section itself. Dictionaries, one's own knowledge of the developing English language and ordinary experience are useful touchstones, but ultimately in each case it is necessary to examine the conduct, whether representational in character or not, and ask the question whether the impugned conduct of its nature constitutes misleading or deceptive conduct. This will often, but not always, be the same question, as whether the conduct is likely to mislead or deceive."
38 As Lockhart J noted in leading up to this passage, in regard to its ordinary meaning in English (which is a "useful touchstone" as he put it), "mislead" can encompass leading astray or causing another to err. Conduct is "likely to mislead or deceive" if there is, as the Full Court of the Federal Court stated in Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 87, a "real or not remote chance" that it will do so. It is sufficient if the conduct is prone or has a propensity, or is liable to mislead or deceive, even though there is less than a 50% chance that this will in fact happen.
39 The plaintiffs have outlined Ms Jones' conduct. They have set out the conduct that is alleged to be misleading and deceptive. However, the plaintiffs have not pleaded that they relied on Ms Jones' conduct, nor have they specifically pleaded any damage caused by the her alleged conduct. In the statement of claim it is pleaded that they paid $25,000 to the liquidators of Neon Advertising. The defendants were directors of Neon Advertising. In oral submissions, Mr McMurtrie stated that Ms Jones received payment of rent while they were in occupation of the factory. This is denied by Ms Jones. The claim under s 42 of the Fair Trading Act needs to be repleaded.
40 The plaintiffs also allege that the defendants have been unjustly enriched by the payment of $25,000 to the liquidators of Neon Advertising Pty Ltd (the defendants' business), which was subsequently distributed to the creditors of the defendants' business. It is alleged that this payment was made under the bona-fide but mistaken belief that the first defendant was the sole proprietor of the property, which is subject of these proceedings.
41 Unjust enrichment can be defined as a benefit for which the recipient is required to make restitution to the person at whose expense it was obtained. An enrichment is unjust if for example, the enrichment was provided by mistake, under duress or undue influence, or the enrichment was obtained as a result of breach of fiduciary duty: David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; 109 ALR 57. This pleading is adequate.
42 Finally, the second defendant submitted that the use of the label "estoppel" similarly adds nothing unless facts are alleged which give rise to an estoppel, and none do. The principle of estoppel is that an individual is prohibited from denying or alleging a fact because of that individual's previous conduct, allegation, or denial.
43 The claims as pleaded by the plaintiffs against the second defendant are hopeless. The doctrine of estoppel "provides that a court of common law or equity may do what is required, but not more, to prevent a person who has relied upon an assumption as to a present, past or future state of affairs, … which the other party has induced him or her to hold, from suffering a detriment in reliance upon the assumption as a result of the denial of its correctness" - Commonwealth v Verwayen [1990] 170 CLR 394 per Mason CJ and Maher. It is my view that the plaintiffs could have an arguable case in estoppel.
44 It is my view that this claim is arguable if repleaded. Overall, the statement of claim needs to be repleaded. While it is trite law, I remind myself that the purposes of a pleading is to inform the other party of the case it has to meet. That party should not be taken by surprise.
45 The statement of claim is struck out. An amended statement of claim is to be filed and served within 28 days. Costs of the second defendant's motion are reserved.