Estoppel - Estoppel in pais - The representation - Inducing detrimental change of position - Detriment - Intending purchaser under incomplete void contract - Avoidance of detriment - Intending purchasers induced to believe they would become legal owners of residential property. Waltons Stores (Interstate) Ltd v Maher (1987- [1988] HCA 7; 1988) 164 CLR 387 and The Commonwealth v Verwayen (1990) 170 CLR 394, considered.

WRIGHT J The plaintiffs became the registered owners in fee simple of two properties in Tower Hill Street, Deloraine in the late 1960's. At the time the plaintiffs were living in Deloraine and were conducting a business as cartage contractors and transport operators. The male plaintiff's sister was the mother of the male defendant who was employed as a driver by the plaintiffs. The defendants, who are husband and wife, lived in a small unit near the Deloraine Hotel.

2. The male plaintiff told me in evidence that he and his wife acquired the first of the two Tower Hill properties (known as 16A Tower Hill Street) some time in 1966 and the second property (known as 16 Tower Hill Street) about two years later. The registered conveyances are dated 10 March 1969 and 15 April 1968 respectively but it seems, as submitted by defence counsel Mr McElwaine, that these dates did not accurately reflect the date of the relevant transactions and one or both dates may have been inserted in the indenture at a later date to avoid penalty stamp duty on registration, a proposition which appears to be borne out by the fact that the consideration is expressed in one of the deeds as being three hundred pounds rather than six hundred dollars. This however is by the way and little, if anything, turns upon it.

3. The undisputed fact is that the plaintiffs utilized No16A as a garage, workshop and depot from about 1966 onwards. The adjoining block, No16, was acquired by them for the purpose of erecting a residence to house one of the partnership's employees. According to Mr Blazely, this was for the purpose of attracting a better type of employee and ensuring that such employee would act as a caretaker or watchman by keeping an eye on the next door property at 16A to prevent pilfering or vandalism. He also said that he intended to use the rear section of the house block to store tyres, forklift trucks and the like. The evidence established without contradiction that, until the plaintiffs ceased their business in about 1978 when they retired to the Gold Coast, they did in fact use the back part of the house block for storage purposes and as an area for the making and repairing of pallets.

4. The plaintiffs engaged the services of a local builder, Lloyd Evans, to erect a three bedroom house upon No16. Mr Evans was paid $4,198 for his services in accordance with a quotation dated 15 September 1967. This price was for labour only and did not include the price of materials which Mr Blazely obtained from a variety of suppliers who were known to him. The evidence did not clearly establish the actual overall cost of the house although Mr Blazely assessed it broadly at $13,000 - $14,000 including, as I understand it, the cost of the land. This estimate appears to be excessive in light of the agreed fact (see Annexure "B" to the Certificate of Readiness) "that the value of number 16 Tower Hill Street in or about 1970 and for the purpose of the agreement alleged by the Defendants in paragraph 9 of the Amended Defence dated the 30th of June 1994 was $9,300."

5. Nonetheless it is quite plain that the house actually cost considerably more than the sum paid to Mr Evans and substantially exceeded the $5,000 mortgage which the plaintiffs negotiated with the Hobart Savings Bank to enable them to meet the costs of construction.

6. This is an important fact in light of the issues raised in the Defence and Counterclaim, both in its original and final forms.

7. After the house had been completed, by arrangement with the plaintiffs, the defendants and their young daughter vacated the unit which they were occupying near the hotel and moved into No16. The evidence of Mrs Whiley, which was not contradicted on this issue, satisfies me that this event occurred on or about 5 October 1968.

8. Thereafter the defendants and their family continued living at No16 until some time shortly before or after the institution of the present proceedings on 3 June 1987. The exact reason for their departure at that time was not made clear by the evidence. Since then the premises have been let by the defendants to tenants.

9. When the plaintiffs moved to Queensland in 1977 they sold two trucks, a trailer, a number of tyres and a considerable quantity of equipment to the male defendant who thereupon entered into business as a cartage contractor on his own behalf. He also took over and received the benefit of two substantial cartage contracts previously operated by the plaintiffs. At this time the relationship between the four parties was very cordial and it is obvious that they all regarded each other with mutual respect and affection. Regrettably this was not to last long as the male defendant, in particular, came to envy the plaintiffs' lifestyle in Queensland and to deeply resent the male plaintiff's frequent demands that he (the defendant) keep up to date with payments due or allegedly due both in respect of the house at No16 and the plant and equipment purchase, the instalments for which were quite often in arrears.

10. Before this sad state of affairs developed the male defendant agreed to rent from the plaintiffs, the premises at 16A Tower Hill Street for his fledgling cartage business and to pay $6 per week rent for these premises. The male plaintiff claimed that the initial rent was agreed at $9 per week plus rates and taxes but this is plainly contradicted by the terms of his own (undated) letter (Exhibit D6). Obviously the plaintiff was in error as to his claim that the rent was to be $9 per week and I find that the agreed rent was $6 per week including rates and taxes. It must be noted that the male plaintiff's unconvincing attempt to explain this disparity does more than simply demonstrate that he has a poor memory, a fact which he emphasized on several occasions whilst giving evidence. He is now 74 years of age and takes regular heavy medication. It was suggested that these factors accounted for his inability to give precise evidence as to some details of his dealings with his nephew and Mrs Whiley and I can readily accept that these factors, together with the passage of time and lack of complete records, would account for forgetfulness in all the circumstances, but in my opinion, the male plaintiff showed more than mere forgetfulness or inaccuracy. I am quite satisfied that he was deliberately deceitful when giving evidence as to this particular issue and several other matters raised with him during the course of the trial. It cannot be disputed however that $6 per week was a very cheap rent, particularly as Mr Blazely made available to his nephew three forklift trucks kept on the premises at 16A for no additional charge. These facts, as well as others mentioned by the male plaintiff and conceded by the male defendant, such as the financial terms upon which the defendant was to pay the plaintiffs the purchase price of the trucks and other equipment, make it plain that the plaintiffs were accustomed to treating the male defendant and his wife quite generously.

11. In evidence Mr Blazely said that the male defendant was often in arrears with the rent on 16A Tower Hill Street, but, that on or about 19 August 1980, as the result of inheriting funds from his deceased father's estate, Mr Whiley made a payment of $2,000 as rental in advance for those premises. Twice during the course of his testimony Mr Blazely said that his nephew had a "good reason" for making this payment but neither counsel took up the implied invitation to find out what this "good reason" was. If there was a "good reason" I was never told what it was.

12. One may speculate that there could have been a tax benefit of some kind for Mr Whiley in making a prepayment of this kind but as the matter was not pursued there is no evidentiary basis for drawing such an inference.

13. The male defendant hotly contested the proposition that the $2,000 paid to Mr Blazely was advance rental. Furthermore he claimed that the relevant payment was made on or about 18 August 1981 and not 19 August 1980 as claimed by the male plaintiff. An examination of the plaintiffs' bank deposit records discloses that payments of $2,000 were received from Mr Whiley and banked both on 19 August 1980 and 18 August 1981. The plaintiff was extensively cross-examined about these matters and I must say that as a result of his very unsatisfactory answers I am left in no doubt that the relevant payment of $2,000 in respect of the yard at 16A was made on 18 August 1981 and not 19 August 1980 as he claimed. It appears that his error as to the actual date of payment may well have been a genuine error of recollection on his part because in a subsequent Invoice 2846 dated November 1986, the male plaintiff wrote "There has been no rent paid on this Garage since your $2,000.00 cheque which was paid on 19.8.80 which expired on Nov 25 1984." Such an error would be readily explicable because of the similarity of the amounts and the similarity of the dates. Furthermore Mr Whiley at this time was making large, albeit irregular payments to the plaintiffs in respect of the plant and equipment purchases, so payment of an amount of $2,000 was not a unique event which one would have expected to be remembered accurately.

14. On the other hand it was convincingly demonstrated that Mr Blazely had continued to send invoices to Mr Whiley demanding weekly rental payments for the yard at No16A on a more or less regular basis between August 1980 and at least June 1981. If there had been a prepayment of the magnitude which he claimed in August 1980 it seems inconceivable that credit for this would not have been given on these subsequent invoices.

15. But whether or not the male plaintiff made a genuine mistake as to the date on which the relevant payment of $2,000 occurred, he quite plainly misrepresented the nature and purpose of the payment to me.

16. This conclusion is irresistible in light of the terms of a letter which Mr Blazely wrote to Mr and Mrs Whiley on 18 August 1981. This document, which regrettably is incomplete, became Exhibit P5 and the relevant part reads as follows:

115 Bayview Street

Runaway Bay

Qld 4216

Dear Chrissie and Om

Received your letter and cheque this day thank you. I can't

change the deeds at this stage as it would have to be

surveyed and the Office is on the line and your garage wall

is also on the line so if it was surveyed both would have to

be moved so this letter tells you Stan that you own the two

blocks and the building that garages the trucks unless you

want to loose (sic) the office and your Garage wall."

17. A word or two of explanation is needed about this letter. In the first place "Chrissie and Om" are the nicknames of the female and male defendant respectively. Secondly "the Office" refers to the office attached to the shed in the yard of 16A which all parties agreed had been built across the common boundary line between 16 and 16A. Similarly "your Garage wall" is a reference to the wall of a garage erected on the house block (16A) for housing Mr Whiley's motor car. It was also agreed that "the two blocks" was not intended to refer to 16 and 16A. Mr Blazely said it referred to 16A and another block in Beefeater Street. Mr Whiley said it referred to 16A which, as the plan on the conveyance shows, is effectively a double block. As to this conflict I prefer Mr Whiley's evidence.

18. At this point I should also refer to Mr Whiley's evidence concerning the payment of the $2,000.

19. He said that in about 1978 he asked the male plaintiff if he would sell him "the yard and shed". He received an affirmative reply and then asked, "how much do you want for it." According to Mr Whiley the plaintiff replied:

"You've looked after me I'll look after you - there's 2

building blocks here, you can have them - you can have it for

$2,000."

20. Mr Whiley says he believed this price was "unreal", meaning, I infer, very cheap and he said he accepted the offer with alacrity. However as he could not afford to pay that amount of money at that time he had to leave the matter in abeyance. Then, following his father's death he contacted Mr Blazely again and asked if he could still buy the yard and, if so, at what price. On Mr Blazely's indication that he would still sell for the original price, Mr Whiley sent him a cheque. Following this he and his wife received the letter (Exhibit P5).

21. After receiving payment for 16A on 15 August 1981 which, as I have found, was the payment of the agreed purchase price, the plaintiff ceased sending accounts or invoices to the defendants for rent until November 1986 when he sent Invoice 2846. Whilst the male defendant says he paid none of the "rent" claimed by the plaintiff in relation to 16A after that date, he failed to contact the plaintiff to remonstrate with him over his duplicity or to seek an explanation for this extraordinary turn of events. Whilst it was acknowledged that the plaintiff was a somewhat prolific letter writer, there are no letters in existence which the defendants or either of them sent to the plaintiff. Nonetheless there was direct contact between the two families by telephone from time to time. This being so, I am amazed that neither Mr nor Mrs Whiley rang Mr Blazely to query Invoice 2846 which was so clearly at odds with the agreement entered into and payment of $2,000 made five years previously.

22. In evaluating the evidence as to this transaction I have been mindful of two apparent discrepancies, one of which was referred to by the plaintiffs' counsel Mr Griffiths, and one of which was not. Firstly, in Answers to Interrogatories verified by the defendants' affidavit on 23 May 1991, the defendants said (inter alia) that "Mr Blazely then told Mr Whiley that he had two good building blocks and he could have them for $1,000.00 and he could have the sheds on them for $1,000.00. Mr Whiley accepted that." The distinction between the blocks and the sheds was not reflected in the version of the conversation deposed to by the male defendant in the witness box. The second discrepancy appears in particulars supplied by the defendants' solicitors to the plaintiffs' solicitors in July 1989 where, in par1, after referring to a conversation in 1981 during which the agreement to sell was made, the concluding sentence reads "the conversation occurred at Deloraine in Tasmania." There are several possible explanations for this discrepancy, including the possibility that the allegations by the defendants are false, but it appears to me that the most likely explanation is that the male defendant has failed to distinguish between the two conversations in 1978 and 1981. Notwithstanding these problems I am convinced that the male defendant's evidence is to be preferred to that of the male plaintiff. As I have said it is principally the terms of the letter of 18 August 1981 and the coincidence of the payment of $2,000 with that letter which leads me to this conclusion. There was also evidence during the male plaintiff's cross-examination which strongly suggests that the $2,000 paid on 19 August 1980 was a payment in respect of a "Leader" truck.

23. My resultant rejection of the male plaintiff's explanation for the letter Exhibit P5, which defence counsel not inappropriately described in his closing address as "puerile" and "fatuous", obviously causes me to entertain considerable doubt as to his general creditworthiness as a witness, but it should not be thought that this inevitably leads me to prefer the male defendant in all matters where the two conflict. The male defendant himself was very unreliable on some matters. He was plainly very bitter towards, and jealous of, the male plaintiff and he was obliged to admit in cross- examination that he had told me a deliberate lie when he denied having spoken to Mr Gilbert Browne concerning the house block, No16, in 1987. As will be seen, Mr Browne's evidence was very material to one of the principal issues in this case and this unwarranted attempt by the male defendant to falsely portray Mr Browne as an unreliable or dishonest witness must reflect very adversely upon the male defendant's general creditworthiness.

24. Mrs Whiley was a more impressive witness than either of the male parties but the scope of her evidence was considerably less and she claimed to recall almost exactly conversations which occurred, in some instances, more than twenty-five years ago, although she had made no note or record of any of these events at the time. Whilst I do not positively disbelieve her evidence the factors which I have just mentioned have caused me to scrutinise it very carefully and to look for confirmation, if available, in the documentary material submitted in evidence. One particular aspect of the evidence of both defendants which I decline to accept, notwithstanding their tendency to provide mutual corroboration, is their claim that the missing second page of the letter (Exhibit P5) contained a statement by Mr Blazely that they should be careful to keep the letter in case something happened to him, as it would constitute evidence that they owned both the house and yard blocks. It is nothing short of astonishing to me that if such an important matter was dealt with in the correspondence, even if there had been no dispute as to these issues up until that time, that particular page should have been mislaid or destroyed. Mrs Whiley says she read the letter and realised the significance of the passage I have just referred to. She also indicated that she had had some misgivings about their security of title in respect of the house block well before that date. In such circumstances it is hard to believe that if such a statement existed in a document it could disappear without explanation, particularly as page 1 remained in existence. I suspect that this particular evidence by the Whileys is an attempt to "gild the lily".

25. I will now resume the narrative of events relating to the house at No16. During the period between 1977 and 1987 whilst the plaintiffs were residing in Queensland, the male plaintiff regularly dispatched invoices to Mr Whiley claiming (inter alia) "rent" in respect of 16 Tower Hill Street. Initially the weekly rent claimed was $30; later it increased to $40. In addition, amounts for rates, land tax and insurance were added to the invoices from time to time. The defendants do not claim that the invoices were mathematically incorrect or that they failed to show an appropriate credit from time to time whenever the male defendant made a payment, whether for truck payments, tyre payments, "rent" or otherwise. The male defendant has no reliable independent records to show how much he paid for "rent" during this period. As he admitted in evidence he was evading income tax by noting these payments in his business records as being in respect of truck parts, diesel, tyres and the like and thus deductible business expenses. At first he was very evasive as to this but in light of the contents of a letter dated 21 September 1978 written to him by Mr Blazely (Exhibit D57) in which the male plaintiff exposed his part in this deception, Mr Whiley was obliged to concede his own mendacity.

26. In April 1987 the male defendant, having just sold one of his trucks for $60,000 or thereabouts, made a telephone call to the plaintiff in Queensland. There is considerable dispute between them as to the substance of that conversation and subsequent events, but the upshot was that the plaintiff engaged the services of Mr Gilbert Browne, an estate agent at Deloraine, to value both the house and land at No16 and the shed and land at No16A.

27. Mr Browne then advertised both properties for sale and, following the involvement of solicitors who were consulted by the defendants, the present proceedings were instituted by the plaintiffs to recover possession of both properties.

28. The plaintiffs' claim is four fold. They wish to evict the defendants from both No16 and No16A, they seek to recover arrears of rent, and they claim a balance of $600 allegedly overdue in respect of a debt incurred by the male defendant purchasing $1,000 worth of equipment from the plaintiffs. This last mentioned aspect of the proceedings is a fairly minor part of the overall dispute between the parties and it may be dealt with quite shortly. The male defendant acknowledged that he was offered the equipment in question by the male plaintiff who had left it behind at Deloraine when he moved to Queensland. The price asked was $1,000 and details of the proposition are contained in a letter written to Mr Whiley by the male plaintiff in February 1987 (Exhibit P12). The plaintiff left it to the defendant to advise him whether or not he wanted to purchase the items. Subsequently the defendant made a payment of $400 which the male plaintiff appropriated as part payment. The only evidence that this payment was intended by the defendants as payment for the relevant items of equipment is to be found in the concluding paragraphs of the male plaintiff's letter of May 1987 (Exhibit P18) and Mr Blazely's evidence that Mr Whiley accepted his offer. Mr Whiley denied that the $400 was made in part payment for the equipment but it is difficult to believe that the plaintiff would have misrepresented the nature of the $400 payment acknowledged by him in that letter. It is a cardinal rule of contract law that an offeror cannot establish the necessary consensus ad idem to constitute an enforceable agreement with the offeree simply by showing a failure by the offeree to decline to accept a proposal. At the time of the offer by Mr Blazely the goods were already in the defendants' possession so reliance cannot be placed upon the doctrine of acceptance by conduct. Nonetheless I prefer Mr Blazely's evidence to Mr Whiley's and I am satisfied on the balance of probabilities that the male defendant did purchase the equipment as alleged by the plaintiffs. The claim for $600 thus succeeds.

29. The plaintiffs' claim to recover possession of both No16 and No16A from the defendants is based on the allegation that the plaintiffs are the beneficial owners of both premises.

30. In their Amended Defence and Counterclaim, the defendants have acknowledged that the legal estate of both properties remains vested in the plaintiffs but they allege:

(a) (Paragraph 6) "By an oral agreement made on a date not

now recalled by the Defendants, but in or about 1981 the

Plaintiffs agreed to sell and the Defendants agreed to

purchase all the land and premises described in Indenture of

Conveyance 40/9404 (Known as 16A Tower Hill Street Deloraine)

for the sum or price of $2,000." The defendants also alleged

(par7) that they have paid the purchase price and have

remained in possession of 16A as owners since that time.

(b) (Paragraph 9) That in or about 1970, "the Plaintiffs

agreed to sell and the Defendants agreed to purchase all that

land and premises comprised and described in Indenture of

Conveyance No 38/1103 (Known as 16 Tower Hill Street

Deloraine) on terms that the purchase price thereof would be

the value of the same as at the date of the agreement and

would be repaid by the Defendants by instalments."

31. By a further amendment to the Defence and Counterclaim made by leave during the course of the trial on 2 December 1994, the defendants added to par9 the following words after the word "agreement":

"or would be the amount of a mortgage debt between the

Plaintiffs and the Hobart Savings Bank to be secured against

the property."

32. As I have previously noted, it is an agreed fact (see Certificate of Readiness Annexure "B"):

"1 That the value of number 16 Tower Hill Road (sic) in or

about 1970 and for the purpose of the agreement alleged by

the Defendants in paragraph 9 of the Amended Defence dated

the 30th of June 1994 was $9,300.

2 The Plaintiffs have received by way of payments from the

Defendants since 1970 amounts in respect of the premises at

16 Tower Hill Road (sic) Deloraine totalling not less than

the value of those premises referred to in the preceding

paragraph."

33. In the particulars delivered in July 1989, the defendants made the following allegations:

"6 The agreement" (ie, the agreement alleged in par9 of the

Defence and Counterclaim) "was between Mr Whiley and Mr

Blazely. A house had recently been erected upon the subject

land. Mr Whiley asked Mr Blazely, with words to the effect

'Can I buy the house, with the rent coming off the purchase

price?' Mr Blazely agreed. The agreement was wholly oral

but evidence (sic) by the acts of part performance referred

to in rejoinder. The conversation took place at Deloraine in

Tasmania. A price was not specifically mentioned at that

time. The Plaintiffs agreed to payment of installments (sic)

by what was notionally termed 'rent' in reduction of the

value of the house.

7 It was at all times the intention of the parties that the

purchase price would be calculated by reference to the

construction costs of the house together with a component for

the land value. The house had recently been constructed at

the time the Defendants took possession. The value of the

land was not discussed. The value was to be calculated by

the Defendants paying installments (sic) to the Plaintiffs.

The Defendants cannot say how many installments (sic) they

paid or the value of them. The Defendants reserve the right

to supply further particulars pursuant to this request after

discovery.

8 The installments (sic) were paid into the Defendants' bank

account and accumulated. At regular intervals the Defendants

would draw cheques payable to the Plaintiffs and post them to

the Plaintiffs at their address in Queensland. The

Defendants resided upon the property. They treated at all

times as their home (sic). They made improvements to the

home such as the erection of fences and the installation of a

swimming pool. The Defendants undertook all maintenance upon

the house and reimbursed the Plaintiffs for rates and charges

in respect of the land. The Defendants are unable to say

when each instalment was paid and in what amount. The

Defendants reserve the right to supply further particulars

pursuant to this request."

34. I have already dealt with the substance of the allegations contained in pars6 and 7 of the Defence and Counterclaim in which the defendants claimed to have purchased the block and garage at 16A Tower Hill Street and have made findings in the defendants' favour. It may be thought that this would provide a sufficient basis to deal shortly with the allegations raised in par9, et seq, and draw conclusions in respect of these issues also in the defendants' favour. But such is not necessarily the case. In the first place, it will be seen when the allegations in the pleadings as they stood at the commencement of the trial are compared with the evidence of the defendants on these issues, that there are a number of important differences - differences of such obvious significance that the amendment to par9 made at the trial which I have referred to above became practically unavoidable and necessitated Mr McElwaine's application to amend at a late stage of the proceedings. Secondly there is no documentary evidence (such as the letter (Exhibit P5) which had an important bearing on my determination of the dispute as to 16A) which constitutes clear proof of the merit of the defendants' claim. Finally there is the important evidence of Mr Browne which requires careful evaluation. I should say that in my opinion Mr Browne was by far the most impressive witness to give evidence at the trial and, notwithstanding his minor lapse of memory as to whether the properties were advertised at $65,000 or $60,000, I accept his evidence without reservation.

35. In providing an outline of the chronological sequence of events I have already touched on the circumstances in which a house came to be built at No16. I shall now deal with that evidence in a little more detail.

36. Mr Blazely told me that when the project was first mooted, his brother Trevor (whom I infer was also an employee of the partnership) was keen to be accepted as tenant of the house, but, due to the intervention of their sister (Mr Whiley's mother) he decided to let Mr and Mrs Whiley take up residence if they were interested in doing so. Mrs Whiley, in her evidence, declared that she was convinced that there had been no such intervention, but put at its highest, her evidence only means that Mrs Whiley senior did not tell her son or daughter-in-law that she had used her influence in this way. I find nothing unlikely or incongruous in Mr Blazely's claim that she did so. He was close to his sister, and it is the sort of thing which a sensitive or tactful lady may choose not to mention to her children in the circumstances.

37. According to Mr Blazely he agreed with Mr Whiley that the latter would pay rent "between $13 and $14 per week." This sum was to be paid by Mr Whiley making repayments of principal and interest in respect of the mortgage to the Hobart Savings Bank in accordance with periodic demands received from the Bank by the plaintiffs.

38. Although as a matter of calculation it may be suggested that the payments made in this way to the Bank amounted to $13 - $14 per week, I doubt that any such sum was specifically nominated as the weekly payment. This fact does not necessarily mean that the payments constituted a part payment of purchase instalments, as alleged by the defendants, but it would be a somewhat unusual method of fixing a mere tenants' rental for the premises. Another component of the rental according to the plaintiffs was payment by the defendant of rates, taxes and insurance premiums. Again, it may be observed that whilst such components may find their way into a lease of commercial premises, they are fairly unusual in a domestic rental agreement.

39. Mr McElwaine placed much reliance on the fact that not only did the Whileys pay the insurance premiums in respect of the contents of the house, they also paid the cost of insuring the house itself and, more importantly still, they were given the option by Mr Blazely of choosing the value of the house which they would nominate for insurance purposes (see letter Exhibit D62). It may also not be lacking in significance that at first Mr Blazely denied that Mr Whiley paid the insurance premiums but under searching cross- examination was obliged to concede that he did.

40. When the defendants entered into possession of No16, it was fully carpeted and painted and was fitted with venetian blinds. As Mr Griffiths commented many times during the case, it was a brand new house which must have constituted a very considerable attraction for young Mr and Mrs Whiley who were aged about twenty-two and eighteen respectively at the time, whether or not they took up residence as tenants or purchasers. They both agreed, albeit with a little reluctance, that purchasing a home of their own at that stage of their lives would have been quite beyond them without generosity of the kind which they claimed the plaintiffs extended to them. Mrs Whiley went so far as to suggest that unless they were entering the premises as purchasers she would not have given up the flat near the hotel at the time, but I reject this. Her complaint about noisy trucks next door at 16A may well have been a problem some time after they moved in, but it seems to me that, if it was really a consideration at the outset, she would have been just as likely to decline to purchase the premises as she says she was to enter into a tenancy arrangement. Mr and Mrs Whiley claimed in evidence that

before the house was built, and after Mr Blazely first mentioned the possibility of their taking up residence in the proposed dwelling, the Blazelys visited their home one evening with a number of plans. Mrs Whiley said that the plans were contained in a magazine sized book and they were warned by Mr Blazely to pick something which was "modest", ie, not too big. On the other hand her husband said that one of the plans produced during this discussion was the actual building plan of the house which was eventually built (Exhibit D58). He also said that Mr Blazely suggested they should pick a home which they could "afford". He was not asked if he meant that that plan was based upon or was a replica of the plan contained in the magazine so I can only approach his evidence on the basis that he meant what he said, viz, that that actual plan was shown to him during this selection process by Mr and Mrs Blazely. To my mind that is impossible. It is inconceivable to me that the plan would have been prepared until the selection process was complete. This may seem to be a small discrepancy between the defendants but, bearing in mind that the male plaintiff and his wife both denied that such a meeting ever took place, it is a factor which takes on some significance. The defendants' evidence must also be scrutinized with some care in light of the allegations in par6 of the July 1989 particulars which made no mention of such a meeting but alleged that at the time of the alleged agreement to purchase, "A house had recently been erected upon the subject land."

41. Although the request for particulars only sought details of the agreement rather than the preliminary discussions, on any version of the defence case the agreement had been formulated, if not at this selection meeting, certainly well before the house was built or even commenced. Both Mr and Mrs Whiley gave examples of direct personal input which they claimed to have had regarding the contents and finish of the house, as proof that they were taking possession as purchasers, rather than tenants. Mrs Whiley said that she chose the internal colour scheme. This was denied by Mr Blazely. She also said she picked out the carpets and the colour of the bath, vanity basin and toilet. She chose the height of the bedroom wardrobe. These claims were all denied by the male plaintiff. Neither counsel questioned Mrs Blazely about these matters and it is very difficult to resolve the direct conflict between the parties on these issues. Mr Whiley said that he did minor work to aid the painter Mr Cyril Abel such as punching nails around doorways. He did this he said because Mr Blazely told him "the more you do yourself the less it will cost you." Mr Abel's charges were not included in the builder's quote so this claim is not inconsistent with the known cost structure of the building.

42. It may be said that as Mr Whiley was a favoured nephew of the plaintiffs and his wife was well regarded by both of them, as well as the fact that he was an employee of the partnership, these factors would place him in a somewhat different position from an ordinary tenant, and as his family was going to live in the place, presumably for some time, Mr and Mrs Whiley's involvement in these matters was not inconsistent with their being tenants and not purchasers. Whilst not fully convinced by these propositions it seems to me that there is nothing in Mr and Mrs Whiley's acting as they claim to have done which unequivocally indicates a sale rather than a tenancy agreement.

43. Similarly, the fact that Mr Whiley made some improvements to the house is not entirely conclusive even though some substantial work was involved. Perhaps the most important aspect of this is that the defendants clearly did not consult the plaintiffs before these jobs were performed. Mr Whiley said that during the construction phase he purchased a number of herringbone patterned doors at his own cost and these were fitted as the house progressed. Mr Blazely said he was "unaware" of this. Mr Whiley also said he had a dispute with the builder, Mr Evans, and required him to replace a defective piece of flooring. Mr Whiley said that he did some concreting around the house although he gave no details. He also said that he provided filling at his own cost although it transpired under cross- examination that the actual filling was provided free of charge. He also said he built a brick fence and retaining wall at his own cost, replaced a screen door and hot water cylinder when it became faulty, installed "Charlie Fluf" insulation and erected a swimming pool and later enclosed it. He agreed the Charlie Fluf enabled him to reduce his heating costs and the swimming pool, although a fairly large one apparently, was of the above ground variety and thus not a fixture. I accept on balance that Mr Whiley did this work and provided the materials.

44. Counterbalancing these considerations however is the fact that at the request of the Whileys, and at his own expense, Mr Blazely erected a garage beside the house and also a pergola. The cost of these two improvements was not given. It is not suggested that there was any discussion about who should bear the cost of these improvements, or how, if at all they affected the alleged purchase price of the premises.

45. It is also a matter of some importance that, despite the Whileys' claim that at the selection meeting they were cautioned against choosing a house which was too expensive, at no time, either then, when the mortgage was executed, or at any time whatsoever in subsequent years, did they discuss with Mr or Mrs Blazely the price which they were required to pay for 16 Tower Hill Street. Nor was there unanimity between them as to the basic component of the purchase price. Mr Whiley was insistent that the price was to consist of the monies payable to the Bank until the mortgage was finally discharged. Mrs Whiley acknowledged that she never expected to pay less than the actual value of the house at the time it was built.

46. Mr Blazely was plainly a generous man towards his nephew at this time of their lives but is it likely he would have made him a present of a house worth $9,300 for $5,000? I think not]

47. Mrs Whiley said that there were several occasions when she discussed the ownership of the house with Mr Blazely. The first of these occurred soon after they had moved into residence. She said:

"Well we were standing in the kitchen and I was very excited,

we hadn't moved in, our furniture wasn't in there or anything

and I said to Uncle Bas" (the male plaintiff) 'now is this

really mine and Stan's home, Uncle Bas' "and he said to me

'Yes Chrissie - long as you keep up the payments at the

bank'."

48. She then went on to describe how she regularly banked monies to enable her to pay mortgage instalments from time to time. She said:

"I trusted Uncle Bas completely to let us know when the bank

loan was finished."

49. She also said that Uncle Bas had told her that when they finished making payments "he would bring the title over to us". Unfortunately she was not asked, and did not tell me, when and where this particular undertaking was given.

50. Mrs Whiley also claimed that about the time when Mr Blazely left Deloraine in 1978 he came to 16 Tower Hill Street. She said "... he was closing out all the accounts because he was leaving Tasmania." She said:

"He told me very clearly standing there with a slip of paper

in his hand and he said he was closing up the mortgage on our

home and it is very clear to me that he told me the sum of

money that had to be paid out on the loan that he was

discharging ... To the best of my memory it was $700 ... I

said 'That's good Uncle Bas, then the deeds can come - we'll

pay you that and the deed can come over into our name' and he

said to me 'It pleases me to leave it as it is Chrissie as it

is at the moment, there's still a little bit of my money tied

up in it'."

51. She said she thought he may be referring to the garage and pergola which Mr Blazely had built at his expense. Oddly enough, although she later conceded that she expected to pay the full value of the house she made no mention of suspecting that the difference between the actual building costs and the amount due pursuant to the mortgage might also be owing at that time.

52. Mrs Whiley also told me that in early 1980 at a time when she had separated temporarily from her husband and was living in Devonport, Mr Blazely came to visit her in the unit where she was living. She said:

"... I said to Uncle Bas, I said, 'I am worried about the

house Uncle Bas, it's not in our name, what if something

should happen to you' and his reply to me was 'Chrissie you

will be all right. I will make sure that it is left in my

will that you and Stan own the house and it will not only be

in Stan's name it will be in your name too' and then he said,

'trust me like Om does Chrissie'."

53. When these conversations were put to Mr Blazely in the witness box he emphatically denied them although he agreed that he had paid out the mortgage at about the time mentioned. A letter from the Savings Bank of Tasmania (the successor to the Hobart Savings Bank) dated 20 April 1978 (Exhibit P70) and addressed to Mr and Mrs Blazely advised that the principal then owing was $500 plus interest of $7.18.

54. There are a number of features of the case which strongly militate against a finding that there was a concluded contract between the parties as alleged in pars6 to 12 of the Defence and Counterclaim. I have already mentioned the total absence of an agreed price, the ambiguity of the evidence relating to a mechanism for establishing the price and the inconsistency between the particulars and some of the evidence; but there are also other features of the evidence which require mention in this context.

55. Firstly it is plain that after going to Queensland Mr Blazely regularly sent invoices to Mr Whiley demanding payment of "rent" in respect of 16 Tower Hill Street at a rate firstly of $30 and later of $40 per week, plus rates, taxes and insurance. Mrs Whiley said that she was not interested in these demands which she left to her husband for attention and he said that he was oblivious to the possible significance of the word "rent" as indicating that Mr Blazely regarded them as his tenants rather than as purchasers of the property.

56. However the terms of many of Mr Blazely's letters, some of them undated unfortunately, make it very plain indeed that he was dealing with Mr Whiley as a defaulting tenant rather than a defaulting purchaser. I refer for example to Exhibit D48 dated 7 January 1984 which I have reproduced in full elsewhere in these reasons. Mr Whiley is reminded of a promise to pay arrears and he is warned that the house (and property) will be sold if he does not pay. He is also told "the rent you have been paying, or should of (sic) been paying is very light as you will see when you find other accommodation." Exhibits P8 and P20 (both July 1985) are in a similar vein. So too is Exhibit P9 (27 March 1986).

57. The significance of these letters lies as much in the total failure of response or dispute which they elicited from Mr Whiley as in their revelation of Mr Blazely's then current view that the parties' relationship was one of landlords and tenants.

58. Although continuing in arrears with payments which had been demanded, neither of the defendants demurred to the plaintiffs' claims in any way. They wrote no letters querying the plaintiffs' allegations and they agree that they never raised such issues during the course of a phone call.

59. Secondly Mr Blazely used a substantial portion of No16 as though it was his own property for the purpose of storage as previously described. Furthermore he built the garage and pergola at his own cost and never sought direct reimbursement. He also caused the garage to be built so that it encroached upon the title to 16A and he extended the office adjacent to the shed on 16A so that it encroached upon the title to No16. At the time of doing these things he was still the owner of 16A. One may readily postulate that a person having beneficial ownership of two adjoining blocks would have no great reason to draw a distinction between the boundaries in the way he utilized them, whereas a mature and experienced business man, such as Mr Blazely was at all relevant times, would scarcely act the way described if he was contemplating handing over the title of No16 to his nephew and his wife in the not too distant future. Indeed, this is the very view which Mr Blazely seemed to be expressing in his letter of 18 August 1981 (Exhibit P5) the material part of which has been reproduced above. This letter, according to the defence case, was written at a time when the beneficial ownership of both Nos16 and 16A had effectively passed to the defendants, a situation in which there would be no reason for Mr Blazely to be concerned about encroachment of buildings upon the adjoining block. Although he refers to "your Garage" in relation to the garage on No16, no significance is attached by the defence to that phrase, understandably perhaps because in an earlier letter Mr Blazely had referred to No16A as being "your yard" when writing to Mr Whiley, even though it was plain that Mr Whiley was merely the tenant of the yard at the time (see letter (undated) Exhibit P4 and the incomplete letter Exhibit D64).

60. Why then, when writing to Mr Whiley to confirm his acquisition as beneficial owner of the yard (No16A) should Mr Blazely be concerned to have the boundary between 16 and 16A resurveyed to accommodate the encroachment of buildings on either side of the line? This clearly suggests that he regarded himself as the owner of No16 at the time.

61. It was submitted by Mr McElwaine that one particular letter written by Mr Blazely to Mr Whiley exemplified the change which had come about in their relationship and tends to support the inference that the male plaintiff had changed from a generous uncle to a grasping and mean individual. Mr McElwaine submitted that there was evidence that Mr Blazely was owed a large amount of money by debtors at the time and had presumably suffered a diminution in income and available funds as a consequence, and that this may serve to explain why this change had come about. Whilst this is one possible explanation there may be many others. It is plain that the male defendant was tardy with many of his payments and this may well have been an added source of irritation and frustration to Mr Whiley who saw it as an undeserved reward for his past benevolence.

62. At all events, on 7 January 1984, the male plaintiff wrote as follows:

"During my visit to Deloraine we made an agreement verbally

for you to pay all rent owing by December 31st 1983 otherwise

the house and property would be sold. I have given you seven

days grace after the agreed date for settlement and still no

mention of payment. So I have put the house on the market I

have advised the agents from this date to sell after one

calendar month which will give you time to find other

accommodation. The rent you have been paying or should of

(sic) been paying is very light as you will see when you find

other accommodation. At this stage I don't intend to take

the property off the market it is for genuine sale.

Rent owing up to January 14th is $1029-35 the account which I

will enclose.

I ask (sic) you in my last letter to please send receipts of

rates which as yet I haven't got so if you have these receipts

please forward otherwise I'll ask the council for duplicate

receipts.

Please vacate premises by February 7th 1984 and I'll arrange

for the keys to be picked up on that date."

63. The plaintiff agreed that the reference in this letter to "the house and property" was intended to refer to both 16 and 16A Tower Hill Street. The point to emphasize is that, if the payment of $2,000 in August 1981 had been intended as a prepayment of rent only for No16A as claimed by Mr Blazely, it would not have been exhausted by January 1984 whether the rent payable was $6 per week, as I have found, or $9 per week as claimed by Mr Blazely. The letter is interesting for other reasons as well. It provided a crystal clear indication to Mr Whiley that the male plaintiff regarded him as a tenant only. He was being threatened directly with eviction, yet, even in such circumstances neither defendant contacted the plaintiff to remonstrate with him, to dispute the nature of their tenure, nor to ascertain what sum, if any, would ensure the transfer of title into their names. Mrs Whiley said she read letters addressed to her and her husband jointly but not those addressed only to him. Even if I accept this it is difficult to accept that a blunt and confronting letter of this kind would not have been discussed between them.

64. Furthermore, Mrs Whiley says that she had asked about having title transferred to her and her husband before the plaintiff left for Queensland in 1978 and she had been fobbed off with the explanation that there was a "little more" of his money tied up in the property. Yet some six years letter when they were still paying for the property she took no steps to query the process.

65. I find it impossible to believe that she could be unaware of what was going on, irrespective of whether she actually read the letters, particularly in light of at least her husband's growing resentment against the male plaintiff and the numerous demands he had received from the male plaintiff for payment in respect of their occupancy of No16.

66. Turning now to the series of events which brought matters to a head and brought about the present litigation, Mr Blazely told me that in April 1987 he received a phone call from Mr Whiley who asked him how much he wanted for the house and yard. He said Mr Whiley informed him that he had just sold a truck but did not get as much for it as he had hoped. Mr Blazely said the call came fairly late at night and that he had been asleep before the phone woke him. It was agreed between them that Mr Blazely would consider Mr Whiley's request and that Mr Whiley would ring back the following Sunday. In the meantime, Mr Blazely said, he rang Mr Gilbert Browne, who at that time was employed by Roberts Stewart and Co Ltd in Deloraine. Mr Browne rang him back a day or two later and told him the value of the properties was about $65,000 - $67,000. Mr Blazely asked him to approach Mr Whiley and offer the premises for sale at $60,000. Mr Whiley rang the following Sunday and advised Mr Blazely that "he (ie Mr Whiley) wouldn't buy it at that price." At no stage of these conversations did Mr Whiley claim that there was already an agreement to buy it for a lesser price.

67. Shortly after this Mr Blazely wrote to Mr Whiley increasing his rent for "house yard and garage" to $80 per week which would now include the rates, land tax and insurance premiums payable in respect of the premises (see Exhibit P18 dated May 1987). He also instructed Mr Browne to place the house and yard (ie Nos16 and 16A) on the market for sale.

68. It is common ground that when Mr Browne did so, Mr Whiley's solicitors intervened and, as a result, precipitated these proceedings.

69. Mr Whiley's version of these events is completely different. He agreed that he phoned Mr Blazely and told him he had sold a truck. He said he told him he received $60,000 to $65,000 for the transaction. He then said:

"I asked him how much money was left owing on the house and

he said 'You haven't even paid the interest much less

anything off the capital' ... then I asked him about the

yard. He denied selling me the yard. I said 'why are you

doing this to me'. He said 'That's business'."

70. He totally denied having any dealings with Mr Browne and he denied having admitted Mr Browne to Nos16 and 16A to make an inspection and appraisal of the properties.

71. Mr Browne gave evidence that Mr Blazely contacted him by phone towards the end of April 1987 and asked him to do a market appraisal of both the residence at 16 and the adjoining yard at 16A. He made arrangements with Mr Whiley to do so and inspected the premises with Mr Whiley. There was a substantial above ground swimming pool at the rear of the house. He said that Mr Whiley said "that wasn't to be included in the market appraisal as he had put the particular swimming pool there himself ... we discussed the location of the garage of the house which was built across the boundary." Mr Whiley suggested that as a result of this problem the two titles "would have to be sold together". There was no discussion as to why a market appraisal was being undertaken. Mr Browne said that he formed the opinion that the value of both titles combined would be approximately $65,000.

72. He repeated this opinion to Mr Blazely who asked him to offer the property to Mr Whiley for $60,000. He did so and two or three days later Mr Whiley "poked his head in our office at Deloraine and said the price was too dear". In cross-examination it was put to him that Mr Whiley did not say this but rather that he told him to take the advertisement out of the paper. Mr Browne denied this. Mr Browne also said that Mr Whiley made no suggestion to him that there was a contract in existence whereby he could purchase the properties for a lesser price. As I said earlier, I accept Mr Browne's evidence.

73. Why should Mr Whiley falsely deny his dealings with Mr Browne and also contradict those matters put by his own counsel to the witness? An attempt was made to portray Mr Whiley as uneducated and perhaps naive. In my opinion he is no simpleton and he readily appreciated the issues and the possible significance of this material. In relation to this series of events I prefer the evidence of Mr Blazely, supported as it is by Mr Browne's evidence in a number of material respects.

74. It cannot be overlooked of course that Mr Blazely was asserting his beneficial ownership of both premises at the time and, as I have found, he had already sold 16A to Mr Whiley in 1981. This significantly reduces or even nullifies the inferences which may be drawn in the plaintiffs' favour from the events of April 1987 and any adverse inferences which may be drawn from Mr Whiley's failure to protest current ownership of either block to either Mr Blazely or Mr Browne during his conversations with them.

75. There are many perplexing features about this case. The house block was acquired and the house built by the plaintiffs to enable them to have a reliable employee keeping a watch on the yard. It is difficult to accept that they would agree to sell the house even before it was built, albeit that Mr Whiley was an employee and a well regarded relative. It is even more difficult to accept that Mr Whiley, who on his own admission could not have afforded to purchase a house at the time, should have asked his uncle, perhaps without even consulting his wife, whether he could buy the house rather than renting it at the outset, before the design or construction of the house had been considered, yet this is what he says he did.

76. On Mrs Whiley's evidence the only persons present on the three occasions she claims she spoke to Mr Blazely and obtained his assurances that they owned the house were herself and "Uncle Bas". Moreover it may be said that the first conversation was somewhat equivocal - she asked if No16 was their "home" (a concept which applies equally to a rented house and one which the occupant owns), and she was told "long as you keep up payments", a reply which, if taken literally, may suggest that any right of occupancy would cease if payments ceased or fell into arrears - a state of affairs more consistent with tenancy perhaps than home ownership.

77. On the second occasion just prior to Mr Blazely's move to Queensland, her utterances are consistent only with a belief on her part that she, as owner, was entitled to the deeds. His answer, significant no doubt because he does not challenge her obvious belief, is nonetheless somewhat equivocal in that at the very least he is suggesting there is more due than she seems to think. The third conversation in 1980 is also somewhat strange. Mrs Whiley does not ask Mr Blazely how much is still owing and what he will require before the house is fully paid for although plainly she is seeking reassurance. His reply, as remembered by her, suggests that he will confirm their ownership in his will - why he will not do so before is not explained and no explanation is sought. It seems possible to me, remembering that this is a conversation remembered from 14 years ago that Mr Blazely may have said "I will leave it to you and Stan in my will." If he said these or similar words of course it would be indicative of an absence of belief on his part that she or her husband had any immediate right to have title made over into their names. I am prepared to accept that Mrs Whiley had conversations of the general tenor claimed but I am not prepared to find that the male plaintiff uttered the actual words which she attributed to him.

78. It occurred to me that Mr and Mrs Whiley may have held different beliefs as to the nature of their occupancy of No16 right up until the time when matters developed as they did in April 1987. Mr Whiley was getting demands for rent and letters clearly indicating that in Mr Blazely's eyes he was a tenant only and he queried none of these assumptions with either Mr Blazely or Mr Browne. Mrs Whiley was the only person present when the three relevant conversations with Mr Blazely occurred. She says she had no interest in her husband's dealings with Mr Blazely. It is possible that Mr Whiley thought they were tenants or at least had some considerable doubt as to whether they had an entitlement to purchase, whereas his wife considered throughout that they were purchasers. Neither counsel dealt with such possibilities and perhaps this shows how improbable such a scenario is, but the fact remains that until 1987 they had been paying more or less regularly for a period of about eighteen years without once requiring clarification of their total indebtedness. Furthermore, if I accept their evidence, they believed that they had paid for the house many times over during this period.

79. On the whole of the evidence I am left in considerable doubt as to the true agreement, if any, between the parties in relation to the house at No16. I certainly cannot be satisfied that there was an agreement which can be enforced as a binding contract.

80. I think it quite likely that with the passage of time and their reflection upon their uncle's unfair attempt to deny the sale of the yard (No16A) to them, the defendants have read more into their dealings with Mr Blazely regarding the house than was originally intended.

81. I think Mr Blazely had a general intent to assist his young relatives in obtaining a home which catered for their own tastes and wishes and which at some future time he would sell to them for a modest price. By his conduct and representations he led them to believe that he would do so. He may even have intended to leave it to them in his will. But I think the true intent of the parties was never expressed or formulated in such a way that one could say a binding contract had come into existence. In my opinion this is not a case where it can be said that the defendants have discharged their onus of showing that there was an agreement to sell at "a reasonable price" as contended by Mr McElwaine. It was an agreed fact by the parties that in or about 1970 the fair value of the subject property was $9,300 but this does not overcome the defendants' difficulty in establishing an enforceable agreement. The court is not at liberty to infer that the parties intended to fix the price by reference to a "fair value" formula in the absence of evidence justifying such a conclusion nor is it entitled to impose such a price upon the parties in default of their agreement upon a price or a workable formula to fix the price (see Hall v Busst [1960] HCA 84; (1960) 104 CLR 206). Mr McElwaine boldly argued that Hall v Busst (supra) was wrongly decided but even if I could entertain such a submission it would make no difference in the present case. There was no agreed price and no agreement upon the method of calculating the price. Merely because it has been agreed for the purposes of the trial that $9,300 was a fair value does not convert that fact into a term of an actionable agreement between the parties.

82. This of course is not an end of the matter. Other issues are raised by the Counterclaim. In pars13 and 14 allegations are made in the following terms:

"13 In the alternative, the Defendants made the payments to

the Plaintiffs herein referred to in respect of the

properties and expended sums in respect of each property and

resided in and occupied each of the properties to the

knowledge of the Plaintiffs in the expectation that the

Defendants were or would become the owners of the properties,

which expectation was created or encouraged by the

Plaintiffs.

PARTICULARS OF CREATION OF EXPECTATION BY THE PLAINTIFFS

(a) Receiving payments from the defendants in respect of each

property;

(b) Requiring and/or acquiescing in the Plaintiffs paying

rates and taxes in respect of each property;

(c) Advising the Plaintiffs, by letter the date of which the

Plaintiffs are unable to determine, that the property at 16A

Tower Hill Court was 'your yard';

(d) Advising the Defendants by letter dated 18th August, 1981

that each of the properties were owned by the Defendants but

at that stage the Plaintiffs could not change the deeds;

(e) Advising the Defendants by letter dated 18th August, 1981

that they were the owners of each of 16 and 16A Tower Hill

Court.

14 In the premises, the Plaintiffs say that the Plaintiffs

hold each of the properties upon trust for the Defendants

absolutely."

83. An alternative basis for the Counterclaim founded upon an estoppel is alleged in par15:

"15 In the alternative, the Defendants say that in the

premises the Plaintiffs by their conduct caused the

Defendants to think and believe that they (the Defendants)

were or would become the legal and beneficial owners of each

of the properties and the Defendants acted upon that to their

detriment by making payments to the Plaintiffs, occupying the

properties and expending sums upon the properties and in the

premises the Plaintiffs are estopped from asserting that they

are the legal and beneficial owners of the properties in

preference to the claims of the Defendants.

PARTICULARS OF ESTOPPEL

The Defendants repeat the particulars under paragraph 13."

84. I will deal first with Mr McElwaine's submissions in relation to par15.

85. Several matters arise for consideration. Having found that there was no agreed purchase price would the Court effectively bypass this determination by deciding that upon payment of some additional amount of money to the plaintiff the defendants should be entitled to a transfer of the fee simple estate? Would this amount to perfecting an imperfect contract? The answer to this is to be found, I think, in considering the course adopted by the High Court of Australia in Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1987-1988) 164 CLR 387, even though in that case the consideration applicable to the unexecuted lease was not in question.

86. Can an assumption or expectation that property will be transferred to the defendants reasonably exist so as to raise a proprietary estoppel in their favour, where the conduct of the party whose behaviour is impugned does no more than create the expectation that he will sell, at a yet to be agreed price in future?

87. If the price had been agreed but the relevant agreement could not be enforced for reasons of formality, the doctrine of part performance rather than proprietary estoppel would come to the aid of the disappointed party, but this is not such a case (see Mason CJ and Wilson J in Waltons Stores (Interstate) Ltd v Maher (supra) at 405). In my opinion the absence of an agreement as to the appropriate consideration does not prevent the court from moulding a solution to obviate an aggrieved party's detriment which, though having the superficial appearance of a contractual consideration is in reality no more than a necessary monetary adjustment designed to achieve fairness to both parties.

88. The words of Brennan J in Waltons Stores (Interstate) Ltd v Maher (supra) at 423 have particular relevance to the circumstances as I have found them in the present case:

"Parties who are negotiating a contract may proceed in the

expectation that the terms will be agreed and a contract made

but, so long as both parties recognise that either party is

at liberty to withdraw from the negotiations at any time

before the contract is made, it cannot be unconscionable for

one party to do so. Of course, the freedom to withdraw may

be fettered or extinguished by agreement but, in the absence

of agreement, either party ordinarily retains his freedom to

withdraw. It is only if a party induces the other party to

believe that he, the former party, is already bound and his

freedom to withdraw has gone that it could be unconscionable

for him subsequently to assert that he is legally free to

withdraw.

...

The unconscionable conduct which it is the object of equity

to prevent is the failure of a party, who has induced the

adoption of the assumption or expectation and who knew or

intended that it would be relied on, to fulfil the assumption

or expectation or otherwise to avoid the detriment which that

failure would occasion. The object of the equity is not to

compel the party bound to fulfil the assumption or

expectation; it is to avoid the detriment which, if the

assumption or expectation goes unfulfilled, will be suffered

by the party who has been induced to act or abstain from

acting thereon."

"But there are differences between a contract and an equity

created by estoppel. A contractual obligation is created by

the agreement of the parties; an equity created by estoppel

may be imposed irrespective of any agreement by the party

bound. A contractual obligation must be supported by

consideration; and equity created by estoppel need not be

supported by what is, strictly speaking, consideration. The

measure of a contractual obligation depends on the terms of

the contract and the circumstances to which it applies; the

measure of an equity created by estoppel varies according to

what is necessary to prevent detriment resulting from

unconscionable conduct."

89. In summarising the elements necessary to establish a successful equitable claim, and the consequences of doing so, his Honour said at 428-429:

"In my opinion, to establish an equitable estoppel, it is

necessary for a plaintiff to prove that (1) the plaintiff

assumed that a particular legal relationship then existed

between the plaintiff and the defendant or expected that a

particular legal relationship would exist between them and,

in the latter case, that the defendant would not be free to

withdraw from the expected legal relations; (2) the defendant

has induced the plaintiff to adopt that assumption or

expectation; (3) the plaintiff acts or abstains from acting

in reliance on the assumption or expectation; (4) the

defendant knew or intended him to do so; (5) the plaintiff's

action or inaction will occasion detriment if the assumption

or expectation is not fulfilled; and (6) the defendant has

failed to act to avoid that detriment whether by fulfilling

the assumption or expectation or otherwise. For the purposes

of the second element, a defendant who has not actively

induced the plaintiff to adopt an assumption or expectation

will nevertheless be held to have done so if the assumption

or expectation can be fulfilled only by a transfer of the

defendant's property, a diminution of his rights or an

increase in his obligations and he, knowing that the

plaintiff's reliance on the assumption or expectation may

cause detriment to the plaintiff if it is not fulfilled,

fails to deny to the plaintiff the correctness of the

assumption or expectation on which the plaintiff is

conducting his affairs."

90. I find that, notwithstanding the many unsatisfactory features of this case to which I have already referred, the defendants expected that a legal relationship of vendors and purchasers would exist between themselves and the plaintiffs in consequence of which the defendants would ultimately become legal beneficial owners and that the plaintiffs would not be free to withdraw from that relationship. I find that the male plaintiff induced the defendants to adopt that expectation. I find that the defendants acted upon that expectation in the manner alleged in par15 of the Defence and Counterclaim and that there was a substantial element of detriment in their so doing, notwithstanding that there were also numerous benefits. It should be noted that this finding does not include a finding that the expectation was created in the manner particularised in par15. Further, and most importantly, I find that the male plaintiff knew and intended that the defendants would act in reliance of that expectation. The plaintiff's action will plainly occasion detriment to the defendants if not fulfilled. I also find that the plaintiff has failed to act to avoid detriment to the defendants by asserting an entitlement to sell the property and retain the nett proceeds thereof for the use and benefit for the plaintiffs absolutely.

91. An indispensable part of the case of anyone seeking to rely upon equitable estoppel to obtain relief of the kind sought in these proceedings, is the establishment of "detriment" occasioned to the claimant by reliance upon the assumption induced by the opposing party. The element of detriment has two dimensions:

"In a broad sense, there is the detriment which would result

from the denial of the correctness of the assumption upon

which the person has relied. In a narrower sense, there is

the detriment which the person has suffered as a result of

his reliance upon the correctness of the assumption."

(per Mason CJ in The Commonwealth v Verwayen (1990) 170 CLR 394 at 415).

92. In the present case it may be said that in the broad sense the detriment suffered by the Whileys is their deprivation of the opportunity to purchase the house at considerably less than present market value and being credited in that transaction with the monies which they paid to the Hobart Savings Bank and the Savings Bank of Tasmania in reduction of the mortgage which the plaintiffs took over the property.

93. From the narrower perspective it may be said that the defendants' detriment has consisted of a number of factors, ranging from Mrs Whiley's complaint that by moving into the house she exposed herself and her family to an inconvenient and noisy environment adjacent to the yard, to the differences, if any, which existed between the monies they paid to or on behalf of Mr Blazely for "rent", rates, taxes and insurance premiums and such sum as would represent a reasonable rental value for the premises. It may be, of course, that they enjoyed possession of the property at an overall cost which was less than the true rental value. There was certainly no evidence to suggest that they paid more than they would have paid for reasonable rent. A matter which was not complained of but which appears to me to be of some significance is that by remaining in occupation of the house the Whileys effectively abandoned any opportunity which they may otherwise have had to purchase or have built for them a different home in a different location. Whilst plainly appreciative of their uncle's perceived generosity in providing them with a brand new house, it was on his block, adjacent to his yard, and largely for his own commercial benefit that the house was built. Monies which were claimed to have been spent upon the maintenance and improvement of the property may also be regarded as relevant detriment.

94. The question therefore arises "What is the minimum relief necessary to do justice between the parties?" The court must be ever mindful of the principle referred to throughout the judgments in Waltons Stores (Interstate) Ltd v Maher (supra) and The Commonwealth v Verwayen (supra) that the developing doctrines of equitable estoppel may not be utilised to outflank the doctrine of consideration by providing relief which effectively consists of the enforcement of a voluntary promise or one supported by an unascertainable or illusory consideration. The answer to the posited question is not easy:

"Each case is one of degree. Reliance upon an assumption FOR

AN EXTENDED PERIOD may give rise to an estopped justifying a

court in requiring that the assumption be made good." (My

emphasis)

95. It seems to me that the correct pathway to a just solution was identified by Mason CJ in what he said earlier in the same judgment at 413:

"The result is that it should be accepted that there is but

one doctrine of estoppel, which 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 (including a legal

state of affairs), which assumption the party estopped has

induced him to hold, from suffering detriment in reliance

upon the assumption as a result of the denial of its

correctness. A central element of that doctrine is that

there must be a proportionality between the remedy and the

detriment which is its purpose to avoid. It would be wholly

inequitable and unjust to insist upon a disproportionate

making good of the relevant assumption."

96. As to how the defendants' equitable entitlement is to be satisfied in the circumstances of the present case has caused me a good deal of anxious consideration. Is the defendants' "detriment" for the purpose of restoring them to the position they would have enjoyed if their expectations had been fulfilled, measured and satisfied by the plaintiff's' regurgitation of all sums paid since the Savings Bank of Tasmania mortgage was repaid, or could the equity be satisfied by ordering the plaintiff to sell to the defendants at a fair and reasonable price (per Brennan J Waltons Stores (Interstate) Ltd v Maher (supra) at 419). Moral indignation at the plaintiff's shabby treatment of his younger relatives whilst assuming the guise of their benefactor does not enter into the equation but even if it did, it is easy to see that there were faults and shortcomings on both sides and, I must say, that in the final analysis I am left with the impression that the change in attitude of the plaintiff was brought about, in part, by Mr Whiley's tardiness in making regular payments under the several agreements which both parties had entered into when Mr and Mrs Blazely moved to Queensland and, in part, by genuine forgetfulness and confusion by Mr Blazely, albeit that he attempted to conceal this fact by rationalising, lying, and perhaps confabulating during the course of his evidence. The essential question is "What is necessary to prevent or avoid the detriment suffered by the defendants?" Unlike the claimants in many of the reported cases the defendants do not claim to be entitled to obtain freehold of the premises free of cost. It was argued on their behalf that no matter what, if any, sum they should pay to the

plaintiff to secure title in their own names, such sum has already been paid, possibly several times over, if credit be given for the amounts which have been paid by Mr Whiley to Mr Blazely over the years. That there are difficulties with this argument has already been illustrated by what I have said as to the lack of recording and the false recording of such payments by both male parties over the years. Furthermore, assuming an obligation by the defendants to pay a sum representing, at least, firstly the final capital instalment on the Savings Bank of Tasmania mortgage and secondly an additional sum representing the value of the building block and the balance of the actual cost of building the house, pergola and garage incurred by Mr Blazely, it would seem to me to be an erroneous approach to credit all payments made by the defendants to Mr Blazely once they stopped making payments directly to the Bank, as payments off the corpus of the outstanding "debt". In a normal commercial transaction the balance owing from time to time would carry interest at then current rates until the capital sum owing had been paid and I see no reason why a similar approach would be inappropriate in the present case.

97. On the basis of the evidence given and the concessions made by the defendants that what they were paying when in occupation of the premises, if viewed as rental payments properly so called, would be "cheap" rent, and taking account of the general tardiness of these payments from time to time, it may be inferred, I think, that what was being paid represented little real profit upon the nett sum invested in the property by the plaintiff.

98. To calculate what sum should be paid by the defendants to the plaintiff, bearing in mind these considerations, would be a virtual impossibility in my opinion. Mr McElwaine suggested that it may be appropriate to have accounts taken between the parties to resolve any outstanding issues of this kind, but, in light of the evidence of the parties as well as that of the defendants' daughter, it is plain that such a process would be unlikely to establish anything like an accurate result.

99. It was urged upon me that although the evidence disclosed that payments of rent by the defendants were both inadequately and falsely recorded by Mr Blazely and Mr Whiley, and that as a result it could not be calculated how much had actually been paid by the defendants to the plaintiffs, I should nonetheless direct that accounts be taken pursuant to the Rules of Court, O35. It must be observed that notwithstanding the shortcomings in the records to which I have referred, it may be possible to assess, at least approximately, amounts which have actually been paid in respect of No16 by the defendants. There would plainly be some purpose to this exercise if I were considering whether or not the defendants had paid a specific sum of money to the plaintiffs for which credit should be given against a particular sum due, but as already indicated, this is not the question which is now before me.

100. Whilst I have found that there was no legally enforceable contract between the parties because there was no agreed price, no agreement upon a mechanism for fixing a price, and no agreement as to the date upon which such a price was to be determined, there were nonetheless representations made by the plaintiff which were relied upon by the defendants and which have caused detriment in the sense which I have already discussed. Underlying the dealings between the parties was also the assumption that at least a substantial part of what the defendants were to pay to the plaintiff or to the plaintiff's bank would be credited against the ultimately agreed purchase price, whatever it was, but I am unable on the evidence to find that there was any representation, agreement or understanding that all monies paid to the bank or as "rent" to Mr Blazely thereafter would be credited in this way. In these circumstances it must be apparent that the remedy which I devise to achieve a fair result for both sides must be based upon broad discretion rather than mathematical or accountancy principles.

101. The defendants do not claim to need the house to live in at the present time. I was not informed of the current arrangements concerning its occupancy. It may be that the rents are being paid into a special account to await the outcome of these proceedings or it may be that they are being pocketed by the defendants. Certainly I can reach no conclusion as to these or other possibilities on the evidence given.

102. With these factors in mind, and conscious that there may be many other factors to which I have not adverted, and to which counsel did not refer me, I think a very broad axe approach is warranted in the circumstances.

103. The property is not encumbered in any way at the present time. In my opinion justice will be done between the parties in accordance with the evidence and my findings in the case, if the property is sold and the nett proceeds are equally divided between the plaintiffs and the defendants, ie, one half to Mr and Mrs Blazely and the other half to Mr and Mrs Whiley.

104. No attempt was made to differentiate between the interests of the two plaintiffs on the one hand and the two defendants on the other. The issues were approached, correctly I think, on the basis that the male plaintiff's conduct bound both himself and his wife, and that the male defendant's conduct likewise bound him and his spouse.

105. The result may smack of palm tree justice and it is certainly not a perfect outcome, but for the reasons I have given such a result seems to me to be unattainable.

106. As neither party appears to require or desire the property as a personal residence at the present time, it should be sold by public auction, or by private treaty if the parties can agree on a satisfactory price. The nett proceeds, after deduction of agent's commission, legal costs and outpockets and any other expenses necessarily incurred in the sale, should be divided as I have indicated. All parties should be free to bid at auction.

(a) The plaintiffs will recover $600 from the defendants.

(b) The defendants are entitled to a conveyance of the

unencumbered fee simple title in respect of No16A Tower Hill

Street (the yard block).

(c) No16 Tower Hill Street should be sold and the nett

proceeds divided equally between the parties.

108. Before finally formulating the appropriate orders I will invite further submissions from counsel.

109. After further submissions by counsel the following orders were pronounced:

1 That there be judgment for the plaintiffs against the

defendants in the sum of $600 upon the claim.

2 That the agreement between the plaintiffs and defendants

for sale of the property known as 16A Tower Hill Street,

Deloraine be specifically performed and carried into effect

by the plaintiffs executing in registrable form in favour of

the defendants a conveyance of all that property situate and

known as 16A Tower Hill Street, Deloraine in Tasmania last

described in Conveyance No 38/1103 and that the defendants

pay to the plaintiffs upon delivery of the said executed

conveyance such sum as the plaintiffs have paid in respect of

rates and land tax due upon the said property since the issue

of the writ in this action.

3 That the property situate and known as 16 Tower Hill

Street, Deloraine in Tasmania last described in Conveyance No

40/9404 be sold either by way of public auction or private

treaty and that the net proceeds of such sale after deduction

of all real estate agents' commissions, solicitors' fees and

other costs associated with the sale be divided equally

between the plaintiffs and the defendants after making

allowance in the plaintiffs' favour of one half of rents

actually received by the defendants since the issue of the

writ in these proceedings and one half of the rates and land

tax actually paid by the plaintiffs in respect of the said

property since the issue of the writ in these proceedings.

4 That all further directions or orders necessary for the

purpose of carrying into effect a sale of No 16 Tower Hill

Street, Deloraine be dealt with in accordance with the

provisions of the Rules of Court, O58, r2 by the laying of

proposals before a judge in Chambers for his sanction.

5 That the plaintiffs be restrained from selling, mortgaging,

transferring, assigning or encumbering in any manner either

No 16 or No 16A Tower Hill Street, Deloraine.

6 That the defendants recover from the plaintiffs ninety-five

per cent of their taxed costs both of the claim and the

counter-claim.

7 That the parties have liberty to speak to the minutes of

this order.