Newstart 236 Pty Limited v Chantal Holdings Pty Limited

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

4147/00 NEWSTART 236 PTY LIMITED v CHANTAL HOLDINGS PTY LIMITED

1 HIS HONOUR : By statement of claim filed 16 November 2000 Newstart 236 Pty Limited, the plaintiff claims as against Chantal Holdings Pty Limited, the defendant, inter alia, that on or about 14 September 1999 the plaintiff executed a lease from the defendant, which lease was expressed to commence on 1 January 2000. It is alleged in the statement of claim that the plaintiff executed the lease relying on certain representations allegedly made by the defendant to the plaintiff (see later). 2 The statement of claim also alleges that in or about February 2000 the plaintiff paid the sum of $98,357 to the defendant "in satisfaction of the rent claimed to be outstanding". 3 The statement of claim further alleges, so far as relevant, that in or about 8 September 2000 the defendant "purported improperly and without justification to terminate the lease and to exclude the plaintiff from the property as notified by letter of 8 September 2000 from the defendant to the plaintiff." 4 The statement of claim further alleges that, following the obtaining of relief by way of injunction from this court restraining the defendant on an interlocutory basis from interfering with the plaintiff's possession and occupation of the premises, on or about 25 October 2000 the plaintiff by its solicitors, tendered to the defendant the amount of rent then claimed to be outstanding in the sum of $55,000.00. The statement of claim further alleges that on or about 13 November 2000 the plaintiff by its solicitor, tendered to the defendant a further amount of $15,000.00 being the amount of rent due for November 2000. 5 Finally, it is alleged in the statement of claim that the plaintiff is ready willing and able to comply with its obligations under the lease and in the premises is entitled to relief against forfeiture, if any such forfeiture has occurred. 6 The plaintiff claims, so far as material, that it was entitled to relief against forfeiture of the lease on such terms and conditions as to the Court seems fit. 7 By its cross claim, the defendant (cross-claimant) alleged that before 8 September 2000 the plaintiff committed acts of default under the lease including, allegedly, non-payment of rent, whereupon on 8 September 2000 the defendant exercised its rights under the lease to determine the lease and re-enter the premises and take possession thereof by changing the locks upon the premises and by the service of a notice of re-entry upon the plaintiff. 8 The cross claim also alleged that by clause 3.03 of the lease the plaintiff covenanted to pay a minimum rental of $15,000.00 per month to the defendant and that clause 15.01 of the lease provided that the plaintiff was deemed to be in default under the lease if the rent reserved under the lease or any part thereof was unpaid and in arrears for fourteen (14) days whether or not any formal or other demand thereof shall have been made. The cross claim also referred to clauses 15.06.1 and 16.01 of the lease pursuant to which if the plaintiff was in default under the lease without any prior demand or notice the defendant was at liberty to re-enter into and take possession of the premises and eject the lessee therefrom, and thereupon the lease would be determined and the plaintiff was required upon the determination of the lease to peaceably surrender up and yield the premises to the defendant in good repair and condition. 9 The cross claim also referred to service of a notice to re-enter executed by the defendant and addressed to the plaintiff and dated 8 September 2000 and to the notice of termination of lease executed by the defendant and addressed to the plaintiff also dated 8 September 2000, by reason of which it was alleged that on and from that date, namely 8 September 2000 the lease was determined and the plaintiff had no right, title or interest in the premises and no right of re-entry thereto. 10 Finally, it was alleged in the cross claim that on 8 September 2000 it was agreed between the plaintiff and the defendant that Mr David Ross, acting for the plaintiff would be given a limited licence to enter the premises for the sole purpose of properly removing property of Mr Ross and/or the plaintiff from the premises, in which connection Mr Ross and the plaintiff were expressly prohibited from conducting any business at the premises or selling any goods from the premises. The cross claim alleges that the plaintiff and Mr Ross committed breaches of the licence in that they commenced and continued to sell goods from the premises and to conduct business from the premises, and further changed the locks of the premises and did not vacate the premises within a reasonable time, and that Mr Ross and the plaintiff were now trespassers upon the premises, which they have continued to occupy. 11 The cross claim claims so far as material, judgment for possession of the premises and consequential relief. THE ESSENTIAL FACTS 12 The essential facts for present purposes are that the defendant, acting through Mr Sandvoss, was a customer over a number of years of the plaintiff through Mr Ross, in relation to the sale and purchase of building supplies, sold by Mr Ross on behalf of the plaintiff to Mr Sandvoss, on behalf of the defendant, the relevant transactions being sometimes of the order of $10,000 to $20,000 over a period of two to three months. 13 In about May or June 1999 Mr Ross told Mr Sandvoss that he had to vacate the premises in which he was conducting the plaintiff's business by reason of an impending rise in the rent payable by the plaintiff for those premises, whereupon Mr Sandvoss suggested that Mr Ross might consider the purchase by the plaintiff of certain premises owned by the defendant. Although Mr Ross was interested in such a purchase, the plaintiff lacked the financial resources to enter into a contract immediately, as a result of which the parties discussed the possibility of the plaintiff being granted an option by the defendant to purchase the subject property, but in a context in which, pending any exercise of any option that might be granted, the defendant would continue to receive rent from the premises. In this connection Mr Ross and Mr Sandvoss agreed that the plaintiff would take a lease for three years from the defendant at a rental of $15,000 per month. It was agreed that the lease would commence on 1 January 2000, although the defendant would be allowed access to the premises for the three months, October, November, December 1999, rent free, in the event that the plaintiff did exercise the option. 14 Mr Ross made it clear to Mr Sandvoss that the plaintiff was not in a position to pay a rental of $15,000 per month from its business and it was agreed that the plaintiff would provide security for payment of rent in the form of a bill of sale over a motor cruiser owned by the plaintiff or Mr Ross, and a fixed and floating charge in favour of the defendant over the assets of the plaintiff. The idea was, of course, to secure to the defendant the payment of rent of $15,000 pending the exercise by the plaintiff of the option. 15 I note that in relation to the statement by Mr Ross to Mr Sandvoss that the plaintiff would be unable to afford $15,000 per month rental, Mr Sandvoss informed Mr Ross that he was free to sublet part of the premises and indeed Mr Sandvoss did organize for a furniture company to sublease a section of the property although it is not stated at what rental. 16 It appears that the defendant had made an application for development approval to the local council in respect of the demolition of the existing building on the land and the erection of one hundred and forty five storage units on two levels, and that this was made known to Mr Ross at the time of the original inspection of the property, who was apparently interested in carrying out this development. Development approval was apparently obtained by the defendant on about 22 May 1999 and in due course the documents relating to the approved development application were handed by Mr Sandvoss to Mr Ross. It appears that this was not done immediately upon receipt by Mr Sandvoss of the details of the approval but Mr Sandvoss says that this was because he was concerned with many other matters at the time. 17 In due course the parties entered into a lease for three years at a monthly rental of $15,000, the lease containing a provision relating to the grant of an option in the following terms:- "30.5 The Option is an option to purchase the Demise Premises to be granted by the Lessor to the Lessee or its nominee." 18 At the time of execution of the lease and prior thereto, the words "2 million dollars" were written in at the end of this clause and initialled by the parties. 19 It appears that as time progressed, despite his efforts to do so, Mr Ross had been unable to obtain finance to purchase the subject property, and in the meantime being unable to pay the rental from the business activities of the plaintiff, it became necessary to sell the cruiser and apply the proceeds of $98,357 to the payment of rent and this was done. Thereafter it seems plain that when the proceeds of sale of the cruiser had, as it were, been exhausted in payment of rent, the plaintiff became in arrears in the payment of rent and the defendant through Mr Sandvoss forfeited the lease on 8 September 2000, changed the locks and excluded the plaintiff and Mr Ross from occupation. 20 The history relating to payment of rent was as follows. Mr Sandvoss, a director of the defendant, forwarded a letter dated 11 February 2000 to the plaintiff advising a rental arrears as at 1 February 2000 of $59,146. The rent was six weeks in arrears by mid February 2000 but Mr Ross's boat was not sold until 21 March 2000 for $98,357. According to Mr Sandvoss whose evidence I accept (as I also do the evidence of Mr Ross, it being unnecessary for present purposes to resolve any conflicts of evidence which may exist) the proceeds of sale were received by Mr Ross and Mr Ross gave Mr Sandvoss a cheque for $51,357 and also gave him a further cheque for $47,000 being $98,357 less $51,357. According to Mr Sandvoss this put the plaintiff in credit for rent until mid June but did not provide for the three months access period for the sum of $45,000. 21 According to Mr Sandvoss he had regular conversations with Mr Ross in January and February 2000 seeking payment of rent, on which occasions Mr Ross would reply in words to the effect that he could not pay because he had no money, that he was waiting for someone to pay him, or that his sales figures were not what they used to be, as his turnover had dropped. 22 Mr Sandvoss also says that after the rent became due again in July after the exhaustion of the credit from the boat sale proceeds, he made further requests for the rent from July until September to which Mr Ross made replies of the same kind as set out above. Mr Sandvoss says that on one occasion in August-September 2000 he said to Mr Ross that he, Mr Ross, had been in the building for 12 months and he had not received one rent cheque (other than the proceeds of sale of the boat) from the plaintiff and enquired where all the money was going. Mr Ross is said to have replied that he had other priorities and had to pay back tax and could not pay the rent. Mr Ross also said that he did not have the money to pay the tax so he had not put his returns in and he now could not get finance from the bank because he had not got tax returns for the last three years. There were further conversations requesting payment of rent in August and early September, to which Mr Ross replied in words to the effect that he was trying to get some finance lined up, maybe in a couple of days, or in a few days, indicating a number of financial institutions to whom he had made applications for finance. 23 Towards the end of August Mr Ross told Mr Sandvoss that he had had meetings with "people" from Westpac and the National Bank relating to finance and that they both told him he needed a 20 percent deposit before they could consider approving finance but that Mr Ross did not have 20 percent available. 24 As the goods of the plaintiff remained on the premises after the locks had been changed, it was agreed between Mr Sandvoss and Mr Ross that Mr Ross and the plaintiff would be allowed back into possession for the purpose of removing the plaintiff's goods to another place. This occurred and some of the plaintiff's goods were removed to another place, but the plaintiff through Mr Ross remained in occupation of the premises and continued to trade, that is to say, to sell building materials. This was in breach of the arrangement between the parties whereby Mr Ross or the plaintiff were allowed back into possession of the premises for the purpose only of allowing the plaintiff and Mr Ross to remove the plaintiff's goods. Subsequently the plaintiff obtained an interlocutory injunction restraining the defendant from again taking possession of the premises pending the hearing of an application by the plaintiff for relief against forfeiture. RELIEF SOUGHT 25 The plaintiff now seeks relief against forfeiture relying upon the general principles relating to relief against forfeiture as set out in the headnote to the case of Pioneer Quarries (Sydney) Pty Limited v. Permanent Trustee Co of NSW Limited 2 BPR 97145, a decision of Hope J (as he then was) and in respect of which his Honour's statement of the principles as encapsulated in the headnote reads as follows:- "In equity, generally the power to re-enter or forfeit for non-payment of rent is regarded as a security for the rent and provided the lessor and other persons concerned can be put in the same position as before the forfeiture or re-entry, the lessee is entitled to be relieved against forfeiture upon payment of rent, costs and interest and other expenses. A lessee is not entitled to relief against forfeiture as of right. The court has discretion in the matter though it may only be in very special circumstances where relief will be refused." SUBMISSIONS ON BEHALF OF PLAINTIFF 26 Counsel for the plaintiff submitted, inter alia, in effect, that the substance of the transaction between the plaintiff and the defendant was clear, and that the substance of the transaction could be given effect to, allegedly without prejudice to the defendant, by granting the plaintiff the relief sought, or at the very least, making some kind of conditional order which would give the opportunity to the defendant to exercise the option and/or enter into a contract for the purchase of the land at a price of $2 million provided he had obtained the necessary finance prior to the end of December this year. 27 Counsel for the plaintiff submitted that the substance of the arrangement between the parties was encapsulated in the following question and answer given by Mr Sandvoss during cross-examination:- "Q. The whole nature of the transaction commercially was simply this, was it not, 'I will give you a little over a year to provide finance, buy the site, develop it, and on default of that you will leave and I will do with it what I will'? A. Yes." 28 I note in passing that on the same page of the transcript the following questions and answers were given by Mr Sandvoss:- "Q. So why, having contemplated giving Mr Ross a year to do that, did you in the middle of March this year start dickering with Mr Wilson and Mr Smith in relation to another transaction? A. The reason was I found Mr Ross didn't seem to have the capability to get it up and running … Q. Put the deal together? HIS HONOUR: Q. Get finance to buy the land? WITNESS: Yeah. AITKEN: Q. But you knew you were contractually bound to him one way or another to the end of the year, weren't you? A. If he had signed the option , I am sure I would have been. Yes, sir." 29 In my opinion, however, the alleged substance of the arrangement between the parties also included, ultimately, agreement that the parties would enter into a lease of the subject premises, legally binding according to its terms, which included the obligation upon the plaintiff to pay rent of $15,000 per month, and the right of the defendant to forfeit the lease for non-payment of the rent. 30 It was also part of the substance of the arrangement between the parties that the lease would contain an option in favour of the plaintiff to purchase the land for a price of $2 million, but the parties did not agree on the terms of the option to be granted, including the terms upon which the purchase would proceed if the option was exercised, and in the event the lease contained only an agreement to grant an option but on unspecified terms as to the option itself, including the terms upon which the purchase would proceed if it was exercised. NO RELIEF AGAINST FORFEITURE BECAUSE OPTION UNENFORCEABLE 31 The failure of the parties to agree upon the terms of the option, either as part of the substance of the agreement or otherwise, including the terms upon which the purchase would proceed if the option was exercised, meant that there was a large and important omission from the so-called substance of the arrangement between the plaintiff and the defendant, the effect of which omission, in my opinion, rendered the so-called substance of the arrangement between the parties legally unenforceable. 32 In my opinion, it is plain that the words used in clause 30.5 of the lease, according to their ordinary and natural meaning, connote and mean only that the parties have agreed that the defendant will grant ("to be granted") to the plaintiff at some time in the future an option to purchase the subject premises at a price of $2,000,000. 33 Those words, however, do not record any agreement between the parties as to the specific terms upon which any such option would be granted, including a term as to the terms upon which the defendant would sell the subject property to the plaintiff in the event that the option was exercised. It is not suggested, and there is no evidence, that there was any other agreement between the parties as to such terms, either of the option or of the contract for sale in the event that the option was exercised. 34 It was somewhat faintly suggested by counsel for the plaintiff that the terms of any contract for sale of the subject premises, consequent upon the exercise of the option by the plaintiff, would be the terms to be included in an open contract as provided in the Conveyancing Act, but in my opinion there is no warrant for any such submission, not least because the only agreement between the parties as recorded in clause 30.5 of the lease is to the effect that the parties had agreed that at some time in the future the defendant would grant to the plaintiff an option on unspecified terms to purchase the subject property. In that context the terms of any contract to sell and purchase the land pursuant to the exercise of the option are, in my opinion, completely at large, and clause 30.5 of the lease does not, in those circumstances, evince any intention of the parties to limit to the terms of an open contract, the terms of the relevant contract for sale which might be provided for in the terms of the option to be granted at some time in the future. 35 Consistent with this view, and, perhaps, to some extent, supporting it, is the fact that as early as September 1999 Mr Sandvoss, on behalf of the defendant, caused the defendant's solicitor to prepare a draft option agreement to be executed by the plaintiff and the defendant, and to forward it to the plaintiff and/or Mr Ross as appears from the letter dated 16 September 1999 from the defendant's solicitors to Mr Ross enclosing a "draft" option agreement, and whether or not such letter and draft option agreement was received by or on behalf of the plaintiff. The draft "option" agreement, which included a copy of the contract which it was proposed would be executed upon the exercise of the proposed option, was certainly brought to the attention of the plaintiff in March 2000, but has never, at any time, been executed by either the plaintiff or the defendant. 36 It was submitted on behalf of the plaintiff that an option had come into existence on the terms of the draft option agreement forwarded by the solicitors for the defendant. That document was described as a "draft" and in no way purported to be the result of any agreement between the parties. Moreover, it is plain that the document from its form was such as to contemplate its execution by both the plaintiff and defendant before it came into existence, and this of course, as stated above, was never done. Nor, in my opinion, is there any other evidence to support the proposition that the parties ever agreed to the terms of the draft option agreement by their conduct or otherwise. It is true that both parties may have proceeded to some extent upon the basis that "an" option was in existence, but there was no common or other basis for supporting the view that there had been some agreement between the parties as to the terms of the option. In those circumstances, in my opinion, there was no estoppel by convention since the parties did not conduct themselves on the basis that there was an option in the terms of the draft which was only a draft and which, as stated above, envisaged execution by both parties before it became operative. 37 It follows, in my opinion, that no enforceable option agreement ever came into existence between the parties, whether as part of the substance of the arrangement between them or otherwise, and further that the defendant is not estopped from denying the existence of an enforceable option. 38 It also follows, in my opinion, that for this reason the plaintiff is not entitled to relief against forfeiture of the lease for non- payment of rent, because the plaintiff's case for relief against forfeiture was put on the basis that the plaintiff wished to be relieved against forfeiture in order to have the opportunity to exercise the option, or not as the case may be, prior to the end of December 2000, at which time if it exercised the option the defendant would be in no worse position than it would have been if the lease had remained on foot and the option had been exercised. The plaintiff's claim for relief against forfeiture is thus based squarely upon the basis that the option is in existence and enforceable which, in my opinion, it is not. It follows, in my opinion, that the plaintiff's claim for relief against forfeiture must be dismissed.

NO ESTOPPEL 39 In those circumstances, and whatever may have been the reason why Mr Ross failed to have the plaintiff execute the form of option agreement, it is also plain that no conduct on behalf of the defendant can be found to give rise to an estoppel estopping the defendant from denying the existence of an enforceable option, because no such conduct could lead the other party to believe that the first party was representing that there was in existence an enforceable option with specific terms in circumstances in which it was the case, known to both parties, that no such specific terms had been agreed either by execution of the draft option or otherwise. 40 I would only add that, in my opinion, the conduct of Mr Sandvoss in entering into a conditional agreement with Mr Wilson for the sale of the subject land, conditional upon the defendant being able to obtain vacant possession, at a time when it appeared to Mr Sandvoss that Mr Ross was unlikely to be able to raise the necessary finance to purchase the subject land, and notwithstanding that Mr Sandvoss did not disclose this fact to Mr Ross, is not, in my opinion, a matter which would cause me to grant relief against forfeiture in the exercise of my discretion because that arrangement made appropriate provision for the possibility that the plaintiff might nevertheless be able to raise the necessary finance before the cut-off date for the exercise of the option as it was thought to be. 41 In this connection I note that the draft form of contract annexed to the draft option agreement stated that the plaintiff was the tenant of the whole of the premises under a lease expiring on 31 December 2002 with a five year option period at a rent of $15,000 per month. 42 I also record that in my opinion the conduct of Mr Sandvoss was in no way relevantly unconscionable and he is not, in my opinion, in resisting the claim for relief against forfeiture, seeking to take advantage of his own wrongdoing. Mr Sandvoss was in no way responsible for the failure of the plaintiff to pay rent and it was that event that gave rise to the right of the defendant to forfeit the lease and not any conduct of Mr Sandvoss. 43 I also note in passing that, to the extent that it was submitted, on behalf of the plaintiff, that the Court should find that the parties had agreed that the terms of the grant of the option would be as contained in the draft option agreement prepared on behalf of the defendant, that that draft includes the following clause:- "12. The grantee will not be entitled to exercise this Option: 12.1 If the Lease pursuant to which it occupies the Property has been terminated; or 12.2 If it is in default of its obligations under the Lease." 44 These clauses would, in my opinion, produce the result that the plaintiff had lost the right that it might otherwise have had to exercise the option. 45 I acknowledge that if relief against forfeiture had been granted it might have been arguable that clause 12.1 should be construed as if it ended with the words: "and has not been reinstated" (which, presumably, on one view, it would have been if relief against forfeiture had been granted), there is no warrant for adopting the same approach in relation to clause 12.2 of the draft option which would, in my opinion, operate according to its terms and notwithstanding that relief against forfeiture may have been granted. NO RELIEF EVEN IF OPTION ENFORCEABLE 46 Even if I had been of the view that the option was enforceable, I would not have granted relief against forfeiture unless I had been satisfied that as at the present time, namely the time of the application for relief against forfeiture, it is probable that the plaintiff would obtain finance to enable it to exercise the option and/or purchase the subject property. This is because there would simply be no purpose in granting relief against forfeiture if the probability was that, even if that were done, the plaintiff could not obtain finance sufficient to enable it to exercise the option and/or sign a contract to purchase the subject land, because if that were the case the only result of the plaintiff being granted relief against forfeiture would be that it would be allowed back into possession of the premises in respect of which it would not be able to pay rent to the prejudice of the defendant, who would not only be kept out of the premises but would have them occupied by a tenant which is unable to pay the rent. 47 It follows, in my opinion, that the court would not grant relief against forfeiture, even on the assumption that there was an existing legally enforceable option, unless, in addition, the plaintiff could prove that at the present time it was probable that it could arrange finance sufficient to enable it to exercise the option and/or enter into a contract for the purchase of the subject land. 48 In these circumstances, and against the contingency that it may be held in another court that I was in error in concluding that there was no legally binding option in existence, nor any relevant estoppel against the defendant, I record that I am not satisfied at the present time that it is probable that if relief against forfeiture were granted to the plaintiff, it could raise the necessary finance to exercise the option and/or enter into a contract for sale and purchase of the subject land. 49 The principal witness called on behalf of the plaintiff to establish that it was probable that the plaintiff could raise the necessary finance before the end of December this year was Mr Williams, a principal of Chifley Exchange Pty Limited. According to Mr Williams it would be necessary to arrange finance in the sum of approximately $7,000,000 to enable the land to be purchased at a cost of $2,000,000 and the development of 145 storage units carried out according to the development application plans. According to Mr Williams he, on behalf of his company, was confident that he could find investors who would contribute $2.5 million to the project to be used largely for the purpose of financing the purchase of the land in respect of which they would hold a second mortgage in due course. 50 It was also necessary according to Mr Williams, to obtain from the Commonwealth Bank (or another financier) a loan of an additional $4.5 million on the security of the land, which it was agreed was worth $2 million, and the development application. Mr Williams said that he had been in touch with a Mr Dean, a manager of the Commonwealth Bank of Australia in relation to an application for such finance but that he had not furnished Mr Dean with any documents relating to the proposed loan application, although he had an appointment to see Mr Dean in the afternoon of the day on which he gave evidence in the morning, namely in the afternoon of 27 November 2000. Mr Williams was optimistic that Mr Dean would within ten working days, approve the application for the loan of $4.5 million, conditional upon getting satisfactory valuations for the land and for the project, including presumably, a valuation as to the likely selling price of each of the 145 storage units. 51 There was some suggestion that Mr Williams might be recalled the following day to give evidence as to his conversation with Mr Dean, but in the event Mr Williams was not recalled and there is no evidence as to Mr Dean's attitude to the application or proposed application for finance of $4.5 million. In this connection, at the end of the day, the only evidence as to the likely selling price of the storage units is the evidence of Mr Williams who stated that he rang certain estate agents and they told him on the telephone of their opinion as to the likely selling price of these storage units, but this was presumably done without them having seen the plans lodged with the development application, and certainly whatever they said could not be regarded as a formal valuation. No such formal valuation was tendered in evidence although a two line valuation from a valuer was tendered in evidence by consent valuing the land at $2 million. 52 Mr Williams also gave evidence that, owing to the financial position of Mr Ross and the plaintiff, it was in his view likely that Mr Dean of the Commonwealth Bank would decline the application for finance unless it was supported in some way by a party of some financial substance. It was suggested that a Mr Stephan might be such a party and there was some evidence to suggest that Mr Stephan and his wife and his company had combined assets of about $500,000, but Mr Stephan was overseas although a fax statement signed by Mr Stephan was admitted into evidence after the hearing had concluded. The defendant waived its right to cross-examine Mr Stephan. 53 As to this statement, suffice as to say that, in my opinion, it does not contain any new information which has caused me to alter my views. In particular, I note that it still refers to an application to be made to the Commonwealth Bank for finance in an amount of $4-4.5 million, presumably still on the security of the land which has been valued at $2 million, although if Mr Stephan and his wife and company either realise their assets or are prepared to mortgage them, the security available for the bank might increase by half a million dollars, being their combined assets. This, in my opinion would not be sufficient to make it probable that the bank would approve the required loan of $4 - 4.5 million on a total security of what would then be approximately $2.5 million. 54 In all the circumstances, the evidence does not satisfy me that it is probable that the Commonwealth Bank would approve finance of $4.5 million with the only security being the land worth $2 million and the benefit of a development application even with the assistance of Mr Stephan. Nor am I satisfied on the balance of probabilities that any other financier would make such a loan and this notwithstanding Mr Williams evidence to the effect that if the Commonwealth Bank would not grant the loan application, he could or might be able to find other investors who would do so, because the project, in his opinion was so good. 55 I note generally that there is no building contract in existence, there are no building plans in existence, that there are no formal valuations of the project in existence, and further that Mr Ross has been unsuccessful in various applications made to various financial institutions including Westpac Banking Corporation and the National Australia Bank, among others. 56 It follows, in my opinion, that the plaintiff would not be entitled to relief against forfeiture even if there was a legally enforceable option in existence and/or the defendant was estopped from denying such, by reason of the fact that, in my opinion, the evidence does not establish that it is probable that if relief against forfeiture was granted, the plaintiff would be in a position to obtain finance sufficient to enable it to exercise the option and/or enter into a contract for sale of the subject land. It also follows that I am of the opinion that the plaintiff's claim for relief against forfeiture of the subject lease should be dismissed even on the assumption that a legally enforceable option was in existence. THE ALLEGED REPRESENTATIONS 57 So far as concerns the representations alleged to have been made by Mr Sandvoss to Mr Ross as set out in the statement of claim, I am of the opinion that the making of those representations did not involve Mr Sandvoss or Chantal Holdings Pty Limited guilty of any misleading conduct. I am further of the opinion that, in any event, Mr Ross did not rely upon those representations in entering into the lease which was entered into between the parties. In these circumstances, I dismiss the plaintiff's claim for relief under the Trade Practices Act and/or the Fair Trading Act. 58 The representations alleged to have been made by Mr Sandvoss to Mr Ross as set out in paragraph 4 of the statement of claim filed 16 November 2000 are as follows:- "4. In the course of those discussions, Mr Sandvoss represented (the representations) to Mr Ross that:- (a) The plaintiff might acquire the property by entering into an option to purchase the property by entering into a lease of the property from the defendant with an option to purchase the property. (b) To allow more time to organize the finances, the defendant would be prepared to 'leave in' an amount of $400,000 which could be repaid later. (c) To secure the transaction Mr Ross could give to Mr Sandvoss a bill of sale over a motor boat then owned by Mr Ross. (d) If the plaintiff paid the outgoings between October 1999 and January 2000 the plaintiff would not have to pay rent for the property provided the plaintiff proceeded with the purchase. " 59 So far as concerns representation (a) it is plain that what was said by Mr Sandvoss was in accordance with what was later agreed between the parties and so did not involve any misleading conduct nor did it become misleading simply because the parties failed to direct their minds to agreeing on the terms upon which the option would be granted. Moreover as the lease entered into accorded completely with this representation by Mr Sandvoss it is plain that Mr Ross did not rely upon Mr Sandvoss' representation but rather upon the terms of the lease itself which he went through carefully with Mr Sandvoss prior to execution. 60 So far as concerns representation (b) no submissions were addressed to the court on behalf of the plaintiff. 61 So far as concerns representations (c) and (d), the position is that these representations were embodied in the lease between the parties and the making of them did not involve the defendant in any misleading conduct. It is also plain in my opinion that the plaintiff did not rely upon these representations in entering into the lease but rather relied upon the terms of the lease itself, which as stated above, he went through together with Mr Sandvoss immediately prior to its being executed by the parties. MISCELLANEOUS 62 Should it become relevant I record my view that the provisions of the lease do not require the security, once utilized, to be replaced. 63 I also record that, in my opinion, there is no relevance in any connection of the doctrine of part performance which can only apply where there has in fact been agreement between the parties but one of the parties alleges that that agreement is unenforceable by reason of the absence of the writing required by law. In the present case, there being, in my opinion, no evidence that the parties had agreed upon the terms of the option agreement as contained in the draft there is no room for the operation of the doctrine of part performance. 64 I also record that I have considered the authorities referred to me by both parties and do not consider that they require me to come to any different conclusion or take any different approach in relation to the facts of the present case.

ORDER OF THE COURT 65 The order of the court is that the statement of claim of the plaintiff is dismissed, the defendant is adjudged entitled to possession of the land, a writ for possession of the premises may be issued at the expiration of 14 days from the date of this judgment, there is judgment against the plaintiff for an occupation fee in the nature of mesne profits in the sum of $15,000 per month from the date of forfeiture of the lease, namely 8 September 2000 until the date possession of the premises is yielded up by the plaintiff to the defendant, the plaintiff is to pay the costs of the defendant of the proceedings including the cross claim, and there is liberty to apply in relation to judgment against David Ross and Gladys Ross in respect of their personal guarantees.

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