Oliver v Lakeside Property Trust Pty Ltd

DECISION : Proceedings dismissed with costs

CATCHWORDS : CONTRACT - general contractual principles - claim by town planning consultants for remuneration - whether contract varied to remunerate plaintiffs by transfer of real property or payment of equivalent value - whether an implied term for hourly remuneration - RESTITUTION - restitution arising from ineffective contracts - whether the plaintiffs in breach of the contracts - performance of work in expectation of reward - entitlement to quantum meruit - ESTOPPEL - whether representations made - TRADE AND COMMERCE - misleading or deceptive conduct - representations by one party as to that party's future conduct - whether representations actionable under Trade Practices Act ss.51A and 52 and Fair Trading Act ss.41 and 42

Conveyancing Act 1919, s.54A(1) LEGISLATION CITED : Fair Trading Act 1987, ss.42, 68, 72 Trade Practices Act 1974 (Cth), ss.52, 82, 87

Arcadi v Colonial Mutual Life Assurance Society Ltd (1984) ATPR 40-473 Associated Newspapers Ltd v Bancks (1951) 83 CLR 322 Bolton v Mahadeva [1972] 1 WLR 1009 Boston Deep Sea Fishing and Ice Company v Ansell (1888) 39 ChD 339 Cutter v Powell (1795) 6 Term Rep 320 Elders Trustee & Executor Co Ltd v E.G. Reeves Pty Ltd (1987) ATPR (Digest) 46-030 Elias v George Sahely & Co (Barbados) Ltd [1983] 1 AC 646 Fenech & Anor v Sterling (1983) ATPR 40-413 GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1 Harvey v Edwards Dunlop & Co Ltd (1927) 39 CLR 302 Hoenig v Isaacs [1952] 2 All ER 176 James & Ors v ANZ Banking Group Ltd & Ors (1986) ATPR 46-005 J Gadsden Pty Ltd v Strider 1 Ltd (The AES Express) (1990) 20 NSWLR 57 Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 CASES CITED : Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286 Munro v Butt (1858) 8 El & Bl 739; (1858) 120 ER 275 Nicholson v Burnett (1922) 25 WAR 101 Pappas v Soulac Pty Ltd (1983) ATPR 40-411 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 Pirie v Saunders (1961) 104 CLR 149 PT Ltd and Another v Maradona Pty Ltd (No 2) (1992) 27 NSWLR 241 Purcell v Bacon (1914) 19 CLR 241 Shevill v Builders Licensing Board (1982) 149 CLR 620 Steele v Tardiani [1946] 72 CLR 386 Sumpter v Hedges [1898] 1 QB 673 Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 The Progressive Mailing House Pty Limited v Tabali Pty Ltd (1985) 157 CLR 17 Tonitto v Bassal (1992) 28 NSWLR 564

Christopher John Oliver - First Plaintiff Janet Patterson - Second Plaintiff Optima Developments Pty Ltd - Third Plaintiff PARTIES : Lakeside Property Pty Ltd as trustee for the Lakeside Property Trust - Second Defendant Lakeside Golf Pty Ltd - Third Defendant Hun Sun Woo - Fourth Defendant

Ms J.F. Merkel - Plaintiffs COUNSEL : Mr R.K. Newton - Defendants

Mallesons Stephen Jaques - Plaintiffs SOLICITORS : James R. Knowles Lawyers Pty Limited - Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

3260/01 CHRISTOPHER JOHN OLIVER & 2 ORS v LAKESIDE PROPERTY PTY LTD AS TRUSTEE FOR THE LAKESIDE PROPERTY TRUST & 2 ORS JUDGMENT 1 These proceedings concern a claim for compensation in respect of services rendered. The principal plaintiffs are Mr Christopher Oliver (first plaintiff) and Ms Janet Patterson (second plaintiff). The first plaintiff was a senior town planner with Wyong Shire Council until his resignation in November 1991. 2 After the first plaintiff left the council, the plaintiffs operated a town planning consultancy, Optima Planning and Development Consultants ("Optima"). The relevant business name was registered by the second plaintiff, apparently because the consultancy started while the first plaintiff was on leave from the council in the lead-up to his resignation. On 25 July 1995, the consultancy was incorporated as Optima Developments Pty Ltd. It is the third plaintiff. At all material times, the first and second plaintiffs were shareholders of the third plaintiff. The first plaintiff was director and secretary of the third plaintiff from 25 July 1995 to 1 September 1998, and from 30 April 2001. The second plaintiff was a director of the third plaintiff from 25 July 1995 to 30 April 2001.

3 The second defendant is Lakeside Property Pty Limited as trustee of the Lakeside Property Trust. The third defendant is Lakeside Golf Pty Ltd. The fourth defendant is Mr Hun (Henry) Sunwoo who was at all material times a director and secretary of the third defendant. From 1989, the second, third and fourth defendants acquired various properties for development of a golf course with tourist accommodation and ancillary facilities ("the project"). The properties comprised a golf course and guesthouse as well as contiguous lands, now consolidated and described as Lot 1102 in Deposited Plan 869373. The project site is within the Shire of Wyong. Wyong Shire Council was the consent authority in relation to it. 4 It is common ground that the plaintiffs rendered town planning services to the defendants in relation to the project. By the third amended statement of claim, the plaintiffs claim relief against the defendants as follows: (a) an order that the second, third and fourth defendants pay to the plaintiffs a fair and reasonable sum of money in quantum meruit for the work done and services performed for which the defendants have accepted the benefit; (b) alternatively, damages in contract or in equity for the value of title to a lot of the project described as "Lot 7" on a proposed plan of subdivision (and known as "Lot 7" to the first and second plaintiffs and the fourth defendant) or an equivalent alternative lot, with a residence constructed thereon in a style consistent with the resort accommodation; (c) a declaration that the defendants contravened s.52 of the Trade Practices Act 1974 (Cth) or s.42 of the Fair Trading Act 1987; (d) an order pursuant to s.82 of the Trade Practices Act and s.68 of the Fair Trading Act that the defendants compensate for the loss and damage suffered by the plaintiffs due to contravention of the Trade Practices Act or the Fair Trading Act by the defendants; (e) such orders as the court deems appropriate pursuant to s.87 of the Trade Practices Act and s.72 of the Fair Trading Act to compensate for loss and damage suffered by the plaintiffs due to contravention of the Trade Practices Act or the Fair Trading Act , by the defendants; (f) interest pursuant to s.94 of the Supreme Court Act 1970; (g) costs; and (h) such other orders as the court thinks fit. The plaintiffs' case 5 The plaintiffs' case is, in the first instance, that in or about August 1991 Optima agreed to provide planning and development consultancy services through the first and second plaintiffs to the third and fourth defendants in respect of the project. The plaintiffs contend that the second defendant and the third plaintiff became parties to the agreement as varied at or around the times of their respective incorporation, with the third plaintiff replacing Optima (as employer of the first and second plaintiffs). The plaintiffs contend that the agreement included an implied term that the plaintiffs would be remunerated by hourly rates; that the agreement was subsequently varied to remunerate the plaintiffs by transfer of land of the project (namely, Lot 7 or an equivalent alternative lot) with a constructed residence ("the house and land"), or provision of the monetary value equivalent to the house and land ("the monetary equivalent"). 6 Alternatively, the plaintiffs claim an entitlement to reasonable remuneration for the benefit of their services to the defendants on a quantum meruit basis. The plaintiffs also claim that the defendants are estopped from denying their entitlement to the house and land or the monetary equivalent; and that various representations by the defendants are actionable on the basis of s.52 of the Trade Practices Act and s.42 of the Fair Trading Act. 7 By the third amended defence, the defendants deny the plaintiffs' entitlement to damages based on contract, quantum meruit, estoppel, s.52 of the Trade Practices Act or s.42 of the Fair Trading Act. The defendants further contend that claims for quantum meruit and under the Trade Practices Act and Fair Trading Act are statute barred by reason of s.14(a) of the Limitation Act 1969, s.82 of the Trade Practices Act and s.68 of the Fair Trading Act, respectively. 8 I heard the proceedings over eight days (17 to 20 and 24 to 27 May 2005). Written submissions were subsequently filed on 6, 16 and 23 June 2005. I reserved judgment on the last-mentioned day. The agreement and its parties 9 It is common ground that on or about 28 August 1991, the first plaintiff agreed to provide planning and development consultancy services to the fourth defendant for the project. The first plaintiff was then employed by Wyong Shire Council, although on leave in the lead-up to his resignation. 10 The plaintiffs contend that the agreement was among all defendants and the second plaintiff (trading as Optima), who was later replaced by the third plaintiff as employer of the first and second plaintiffs. The fourth defendant says that he regarded the agreement as being with the first plaintiff only and that he had dealt with the second plaintiff on the instructions of the first plaintiff. In particular, the fourth defendant deposed that: "I viewed Patterson, if anything, as only an administrative extension of Oliver, the expense of which he would bear."

11 The first plaintiff was, as I have said, then employed by Wyong Shire Council. He had, in the course of his duties, advised the council regarding land of the project. In an attempt to conceal the work of the first plaintiff on the project and any resultant conflicts of interest and duty while he remained an employee of the council, the first plaintiff ostensibly declined the offer of engagement from the fourth defendant in correspondence to each other and third parties. 12 However, other documentary evidence indicates objectively that the parties were Optima and the fourth defendant as himself and as agent for the third defendant. Correspondence regarding the project from the first and second plaintiffs to the third and fourth defendants and third parties was regularly written using Optima letterhead. Third parties such as consultants, surveyors and the council wrote to Optima as well as the third and fourth defendants. Moreover, correspondence on letterhead of the third defendant and cheque payments by the fourth defendant (except for one cheque from Lakeside Resort Development Pty Ltd) were addressed to Optima and the second plaintiff. Consistent with the second plaintiff trading as Optima being the employer of the first and second plaintiffs, the fourth defendant continued to address correspondence to the second plaintiff even after termination of the first plaintiff's employment with the council, when it was not necessary to conceal his involvement.

13 The second defendant and the third plaintiff were incorporated on the 17 March 1993 and the 28 July 1995, respectively. The only mention of the agreement being varied to bind the third plaintiff appears in a letter from the third and fourth defendants dated 30 October 1995. It will be necessary to say more in due course about the circumstances surrounding the letter dated 30 October 1995 and its effect on the agreement among the parties.

14 Although the first plaintiff says that the incorporation of the third plaintiff was "common knowledge", it is unclear whether any of the defendants were aware of the third plaintiff. The plaintiffs conceded that the matter of the third plaintiff becoming a party (by replacing the second plaintiff as employer of the first and second plaintiffs) was never discussed with the fourth defendant. Indeed, the second plaintiff who was present when the letter of 30 October 1995 was given to the fourth defendant was unsure whether he knew that the third plaintiff had been incorporated:

"Q. I think you said yesterday that you didn't recall telling him about the incorporation of [Optima Developments Pty Ltd]; is that correct? A. I am not sure whether he knew or not."

15 I am not satisfied that the second defendant became a party in the absence of evidence that the fourth defendant was authorised to bind the second defendant in executing the letter dated 30 October 1995. There is no other evidence that the dealings among the parties recognised the second defendant and the third plaintiff. The parties to the agreement as it existed from time to time were therefore the third and fourth defendants (hereinafter "the defendants") and the second plaintiff trading as Optima.

Terms of the agreement 16 As the agreement was never fully recorded, its terms must be gleaned from evidence of contemporaneous communications and conduct of the parties. It is common ground that the plaintiffs would be remunerated for their provision of planning and development consultancy services for the project. However, the terms concerning the plaintiffs' remuneration remain controversial. 17 The first plaintiff deposed that he broached the matter of remuneration for his services with the fourth defendant at the meeting on or about 28 August 1991, but conceded in cross-examination that remuneration was not discussed nor agreed upon at the meeting. In contrast, the fourth defendant asserted that the first plaintiff, possibly in the presence of the second plaintiff, expressly agreed to be engaged on a monthly fee of $1000 and to work as required by the project. 18 Although I am not satisfied that the terms of remuneration were finalised at the meeting in question, express agreement about remuneration was reached by subsequent words and conduct of the parties. Specifically, the first and second plaintiffs accepted the cheque payment of $1,000.00 from the fourth defendant following the meeting and continued to accept such payments as satisfactory remuneration for their work on the project until May 1993. This is supported by a letter from the second plaintiff to the fourth defendant dated 8 October 1991 and affidavit evidence of the first plaintiff. The first plaintiff deposed to a conversation with the second plaintiff around December 1991 to the following effect: "I recall a conversation that I had with Jan around December 1991, in which Jan said words to the following effect: 'Here is another cheque for $1,000 from Henry.' I said words to the following effect: 'This arrangement is good at present because Henry apparently has a fairly good appreciation of the work we do for him and there is no need to issue invoices. This arrangement is okay whilst the level of payment matches our work.'" 19 Moreover, the first plaintiff admitted that the plaintiffs never provided a schedule of fees, invoice or formal retainer to any of the defendants. The first plaintiff conceded in cross-examination that the fourth defendant was never informed about the plaintiffs' intention of charging hourly rates for work on the project, and disclaimed the application of such rates to the project. 20 The first plaintiff confirmed in cross-examination that an increased hourly rate discussed by him with the fourth defendant had nothing to do with the parties' relationship. I quote from the affidavit of the first plaintiff:

"On or about March 1995, whilst attending a meeting at Mr Sunwoo's Pymble office and discussing another development project I said to Mr Sunwoo words to the following effect: 'We have increased our rates for this sort of work. We are now charging $120 per hour.'

He replied using words to the following effect: 'Is that the going rate?'

I then said words to the following effect: 'No, some firms are charging a lot more, I believe up to $150 per hour.'

When I said to Mr Sunwoo that my current hourly rate was $120, I was referring to the rate which I was going to charge a new client for an unrelated development project which Optima might be asked to become involved in." [Emphasis added]

After being taken to his affidavit, the first plaintiff was cross-examined as follows: "Q. … [In your affidavit, you refer] … to a discussion you had about March 1995 with Mr Sunwoo and you referred to your hourly rates. You make no reference there to the hourly rates for the work done by Janet Patterson? A. No.

Q. So the subject is silent on that topic, I take it? A. Yes.

Q. And that topic though was directed at the possibility of you working on other projects introduced by Mr Sunwoo, I take it? A. No, not necessarily. It was an indication of - for other work that we were being requested to become involved in, that was the rate that we were going to charge.

Q. That rate had nothing to do with the Lakeside project? A. No.

Q. It is not your position that you were entitled to be paid those hourly rates for the work you would do on the Lakeside project, is it? A. Put it in the right context, I suppose that was the rate I was charging other projects at that time.

Q. And you agree with me that these rates were never ever discussed with Mr Sunwoo in the context of the Lakeside project? A. They certainly weren't, no." 21 It is notable that the plaintiffs did not maintain any contemporaneous records of the time they worked on the project. Although the second plaintiff asserted that contemporaneous time records were kept, she was unable to indicate the whereabouts of the records and none were produced. In the absence of corroboration, I do not accept the bare assertion of the second plaintiff. 22 Importantly, the first and second plaintiffs continued to work despite knowing that the third and fourth defendants were in straitened financial circumstances and unable to afford to remunerate the plaintiffs on a regular basis. The first plaintiff deposed that he became aware of the poor financial circumstances after the plaintiffs' relocation to Chatswood and conceded in cross-examination that he had known that the fourth defendant could not afford to pay more than token sums in the years before their relocation. I quote from his cross-examination:

"Shortly after [the first and second plaintiffs commenced their roles as General Manager and Company Secretary of the project], I observed from the general running of the office that Lakeside Golf and Mr Sunwoo were in a poor financial position, borrowing substantial sums of money at interest rates as high as thirty five percent to keep afloat."

"Q. You knew at that time that Mr Sunwoo had very limited financial resources at his disposal? A. No. I did not know the details.

Q. You knew from conversations with Mr Sunwoo that he was unable to pay you more than a token amount? A. In the preceding years, yes.

Q. And you knew that nothing had changed in 1995? A. No. In 1994 I knew that Mr Sunwoo was refinancing. He said, 'I am getting finance'.

Q. You didn't know the fact that he had obtained refinancing, did you? A. No.

Q. And you had no reason to suppose in the beginning of 1995 that he had obtained finance? A. No. …" 23 All parties attempted to rely on a letter dated 6 July 1993 from the fourth defendant to a prospective consultant Mr John Cassidy. The letter stated:

"At present, I am not in a position to hire you at $92.00 per hour. …. Also at present, Chris Oliver is subsidising his cost by nearly 70% for remuneration at the end of the day. I am only paying him about $1,000. per month until I have some income." 24 According to the first plaintiff, the letter confirmed that the fourth defendant was then paying only a fraction of the remuneration owing to the plaintiffs. The fourth defendant says that the letter was a means of negotiating with Mr Cassidy and not relevant to his arrangement with the plaintiffs. There is no evidence of discussions between the plaintiffs and defendants concerning the contents of the letter and I do not think anything turns on it. 25 Notwithstanding the first plaintiff's admission, the first plaintiff would have been informed about the financial difficulties of the project and the fourth defendant through his close working relationship with the third and fourth defendants and his extensive involvement in the project. The first plaintiff says that he reported directly to the fourth defendant, was the "senior representative" of the third defendant in interactions with council, authorities and experts for the advancement of the project, and inter alia assisted the fourth defendant in dealing with financiers, was responsible for purchasing equipment, negotiating with construction companies and assessing proposals from prospective service providers for the project: "During the course of the my (sic) association with the Defendants (as planning consultant from August 1991 to March 1995 and as General Manager from early April 1995 to December 1995), I carried out the following tasks: …. · ·providing assistance and advice to Mr Sunwoo in his dealings with financial institutions (such as Australian and New Zealand Banking Corporation), with prospective investors and joint venture partners such as Yvonne Poon and Carl Wong, and with valuers and finance brokers (such as Leigh Higgins of Grant Samuel Property Services); · co-ordinating office requirements such as stationery, fittings and office layout and purchasing of equipment (e.g. tractors, wood chippers) for the [project]; · ·responding to requests for information and negotiating with major construction organisations such as Transfield and Abigroup in relation to a possible multi-million dollar construction contract associated with the Development; · ·interviewing, providing information to and assessing various proposals submitted by various service providers associated with all aspects of the [project] (such as providers of commercial laundries, energy services, fibre optic cabling, satellite irrigation, hotel management, child care facilities and real estate agents)." 26 That the first plaintiff performed these tasks is essentially uncontradicted by the fourth defendant. The appeal by the first plaintiff to Mr John Lusted as the chairman of the committee representing the third defendant in September 1995, to move the fourth defendant to secure financing for the project, further supports his understanding of the financial situation:

"At the conclusion of [a Committee meeting on the 14 September 1995], I had a separate discussion with Mr John Lusted, Mr Scott Lusted and Mr John Hill. We had a conversation to the following effect:

Me: 'John, the reason why no work or monitoring has been carried out on the site is because Henry has no money. He desperately needs financial support or he might go under; the ANZ Bank are moving on him. You were going to be a major player in this project and have always been promoted as Director. Now that approval has been obtained, can't you help out? If not, at least talk to Henry from your perspective and impress upon him the need to do something. …'

Mr John Lusted: 'Leave it to me'." 27 Indeed, the first plaintiff accepted the financial exigencies of the fourth defendant until 30 October 1995. Perhaps motivated by their understanding of the financial difficulties of the fourth defendant and the project, the first and second plaintiffs readily accepted other forms of remuneration from the fourth defendant. These included, on the plaintiffs' evidence, an allocation of units in Lakeside Property Trust, promise of a house and land of the project or the monetary equivalent, and use of the office premises of the third defendant.

Units in the Lakeside Property Trust 28 On the first plaintiff's evidence, in or about June 1993, the fourth defendant informed him that the fourth defendant had allocated him some units in Lakeside Property Trust. The fourth defendant allegedly handed a sheet of paper entitled "Structure of Property Trust" to the first plaintiff and a conversation took place between them in which the fourth defendant said:

"We all have shares in the project. The more profitable it is the more money we take out. It gives you a share of the action."

and the plaintiff replied: "Thanks Henry, it shows a real appreciation for the work done and results I have achieved for you."

29 The paper is not in evidence and there is no other evidence to support the disputed allocation of an interest in the trust. The affidavit evidence of the first plaintiff also refers to the allocation of units in a conversation with the fourth defendant on 29 October 1995 to the following effect:

"[The first plaintiff] said …: '…. don't say to me that you are going to give me shares in any Trust'.

[The fourth defendant] said …: 'I took you off the Trust Share Register when I allocated the block of land to you …'."

30 Based on the limited evidence available, I accept the first plaintiff's account only to the extent that he was willing to accept the allocation of units allegedly proffered by the fourth defendant.

Provision of office premises and facilities 31 On 13 March 1995 the plaintiffs relocated their planning and development consultancy from Cairns, Queensland to the office premises of the third defendant in Chatswood, New South Wales. The plaintiffs say that they were invited to use the Chatswood premises by the fourth defendant, and they rely on a telephone conversation between the second plaintiff and the fourth defendant in early January 1995 to the following effect:

"[Fourth defendant said:] 'Everything's going ahead down here. I need you both to come down to Sydney to work on the project full time.'

[Second plaintiff] replied …: 'OK. We'll do that.'" 32 The second plaintiff says that she immediately accepted the invitation on behalf of her consultancy and the first plaintiff. In contrast, the fourth defendant says that the office premises were offered in response to the plaintiffs' desire to develop their consultancy in Sydney as expressed by the first plaintiff in early 1995.

33 Importantly, the first and second plaintiffs were inclined to relocate and facilitate their involvement in the project, and thereby secure the realisation of the promised house and land. The plaintiffs' willingness to relocate to Chatswood is corroborated by the first plaintiff in cross-examination:

"Q. And you knew you had to be in there in your own interests, didn't you? A. Yes.

Q. And that was a matter which you considered to be important in deciding to go to Sydney? A. Yes, it was - it was a consideration, yes." 34 Notwithstanding the demands of the project, the plaintiffs also serviced other clients and used the office of the third defendant without paying for rent or other expenses incurred by them (e.g. telephone calls, photocopying, etc). The plaintiffs thus accepted the complimentary provision of office premises and equipment by the fourth defendant. Promises of the house and land 35 The fourth defendant deposed to a conversation with the first plaintiff that occurred some time before his letter to the second plaintiff dated 21 October 1993, to the following effect:

"Sunwoo: 'I think this project will yield a large profit, once we start selling properties. You know I can't pay you more than $1,000 per month for your services, but if you stay on with me to the end and the project makes a profit, I will transfer to you a piece of land, if I can. It would be kind of like a bonus. Meanwhile, I'll keep paying the $1,000.00 per month.'

Oliver: 'Okay, that'll be great. I'm happy to go ahead.'" 36 The letter dated 21 October 1993 enclosed copy of a floor plan for the housing and the northern site plan of the project. Two lots on the site plan are coloured pink. On the floor plan, the fourth defendant had written:

"Dear Jan, This is Henry's promise! ONE OF THE TWO LOTS MARKED PINK is yours. Tell me which one your prefer. It will not be on sale! If we make really too much money, I MAY even build it for you. Let me know what you think of the design! Henry 21/10/93" 37 A letter from the second plaintiff to the fourth defendant dated 28 October 1993 states:

"Dear Henry, RE: HENRY'S PROMISE It all seems like a fairy tale. The northern lot appears to have the best appeal and is preferred out of the two lots identified. I guess I will have to make sure that Chris makes you lots of money. The floor plan looks great. Kind regards, JAN"

38 The fourth defendant says he spoke with the second plaintiff following her receipt of the plans. The conversation is set out in his 2004 affidavit:

Sunwoo: 'If Oliver is prepared to stick it out with me and the project is profitable, I'll transfer to him one of the blocks.' Patterson: 'I'll make him work really hard, and make you money so we get a block.'"

39 The conversation between the second plaintiff and the fourth defendant is supported by the account of the first plaintiff. The first plaintiff recalls another conversation with the fourth defendant that occurred shortly after he saw the fourth defendant's handwritten note on the floor plan: "First plaintiff: 'We've got your plan and I understand you have spoken to Jan. The block on the northern side of the island looks great.'

Fourth defendant: 'No worries. I'll put the sold sign on the plan. You've earned it. …'"

40 On 4 January 1994, the first plaintiff received a facsimile of a site plan from the fourth defendant. On the site plan, the lot chosen by the plaintiffs had been marked "SOLD". 41 The fourth defendant says that he informed the first plaintiff on "a number of occasions" that he could only afford to pay the plaintiffs "$1,000 here or there" and would give the first and second plaintiffs a block of land upon profitable completion of the project provided that the first plaintiff continued to service the project until it was complete. I quote from the 2004 affidavit of the fourth defendant: "Sunwoo: 'If the plans go ahead, there will be a lot of work involved for me. I will also need town planning help. I think that developing the project could be very successful. If the project goes ahead, I would be prepared to give you a piece of land at the end of the day, of course you'll have to stay with me until the end, and you would have to be loyal to the project.'

Oliver: 'I'm sure you'd make a profit. That would be excellent.'" "Sunwoo: 'Chris, if you stay with me to the end and we get this development done, as a bonus you can have a block of land.'….

Oliver: 'Oh yeah, I understand. That would be good. Thank you.'

Sunwoo: 'You know I am very happy about this project. I can see good things for it. At the end of it all I will give you a parcel of land as a bonus.'

42 Clearly, the first plaintiff understood that the transfer of the land necessarily depended on further progress of project. Nevertheless, it seems that the first and second plaintiffs expected to receive the transfer and did not make alternative arrangements for remuneration.

43 Based on the evidence, I am satisfied that the first and second plaintiffs and the third and fourth defendants expressly agreed to the promised transfer of land but that this was conditional upon the profitable completion of the project and the plaintiffs continuing to work until the completion of the project. This is particularly evident from the contents of the handwritten note accompanying the floor and site plans to the second plaintiff on or about 21 October 1993, and the facsimile dated 4 January 1994.

44 The plaintiffs further contend that the fourth defendant subsequently acknowledged that the plaintiffs had earned a house in addition to the promised land by October 1995. The plaintiffs rely on a conversation between the fourth defendant and the second plaintiff, following a management committee meeting in or about September 1995 to the following effect:

Second plaintiff: "We have made lots of money for you Henry."

Fourth defendant: "I will build you the house now."

45 According to the first plaintiff, the fourth defendant acknowledged that the plaintiffs had earned the house and land in a conversation between himself and the fourth defendant on 29 October 1995 to the following effect:

First plaintiff: "Prior to us coming to Sydney, you said a block of land on the island was ours. What else do you owe us now that we have obtained the Consent, which must surely substantially increase the value of the property and the fact that we have worked full time, sometimes seven days a week, since March …"

Fourth defendant: "…You have earned the house and land package and you know I need other investors to make it work, but I have to fix up ANZ first."

46 When the first and second plaintiffs agreed to resume working on the project (following their termination in early December 1995), the first plaintiff recounts that the fourth defendant confirmed that the plaintiffs would receive the promised house and land in a conversation among the first and second plaintiffs and the fourth defendant: "Jan (the Second Plaintiff) said words to the following effect: 'What about our house and land?'

Mr Sunwoo replied using words to the following effect: 'You will still get that, I won't go back on my word, you have to trust me.'" 47 The first plaintiff also deposed to the fourth defendant confirming the house and land in a subsequent conversation among the first and second plaintiffs and the fourth defendant. I quote from the affidavit of the first plaintiff:

"I said …: 'Henry we are disappointed that you only paid us $2,500 which is an insult to what you owe us for all the work we did. It is not going to cover our past out of pockets.' ….

Jan then said …: 'How come you paid Victor $50,000 and only paid us $2,500 …. That is not fair when we have done miles more work than Victor and have got no where (sic) near that.'

Mr Sunwoo replied …: But he is not getting what you are getting out of the development.'"

48 However the first plaintiff conceded in cross-examination that he understood the house and land remained conditional upon the first and second plaintiffs' continued involvement in the project. I quote from his cross-examination:

"Q. Is it not the case that your agreement with Mr Sunwoo was that you would have to work until the project was completed, because he would have no opportunity, until such point in time, to give the you the parcel of land? A. That might have been his implication, but certainly, when the parcel of land was to be given, as Henry promised the parcel of land, it was: The land is yours; you have earned it. So, obviously, to receive that block of land, the development needed to be completed and the subdivision needed to be registered and the transfer needed to occur. But, as far as I had to stay and work on the project, obviously, it was there was an incentive there. It was almost like a bait and I took the bait, I suppose. If you want to realise this, you have got to stay with me and do that. I suppose that's the implication of it." 49 And later:

"Q. Do I understand from your previous answer correctly that the offer of the block of land and perhaps a house was something in the nature of an incentive, or you treated it as an incentive? A. I saw it as a - a recognition of the achievements to date and the fact that it would be only realised at some stage in the future as that was taken into account in that context.

Q. So you would enjoy the fruits of success, as it were? A. Yes.

Q. And you knew that if you quit the project the following day, you wouldn't get that land? A. That's probably right, yes.

Q. And it became an important matter for you to identify with and pursue the project in your own interests from that point onwards? A. Yes, it was an incentive, you might say, to - to pursue on.

Q. You knew that yourself and Janet Patterson would receive a direct advantage if the project succeeded? A. Yes.

Q. And it was in your interests to make the project succeed? A. Yes.

Q. In the same way that it was in the interests of Mr Sunwoo to make the project proceed? A. Yes.

Q. In that sense, you were fellow travellers, you and Mr Sunwoo? A. I suppose if you would like to put it that way.

Q. And you knew that and you didn't seek any further form of remuneration, did you? A. No, because we were still being - we - you know, in subsequent months we still got paid.

Q. And apart from the small amount you were being paid, you were satisfied that sharing the fruits of success in the form of a block of land would be perfectly adequate for you? A. Well, as soon - I saw the offer of the block of land as probably achieving a number of roles. One, negating the need to pay for the effort that had been put in to achieve the decision that we - we had achieved in October and, you know, just to as an incentive to keep us in there to - to realise that.

Q. You knew it was important to Mr Sunwoo that you remain in there, didn't you? A. Yes.

Q. And you knew you had to be in there in your own interests, didn't you? A. Yes.

Q. And that was a matter which you considered to be important in deciding to go to Sydney? A. Yes, it was - it was a consideration, yes." 50 And later:

"Q. You accepted the possibility that at some point in time he might lose control of that entity, didn't you? A. Yes.

Q. Because of his financial difficulties? A. Yes.

Q. And you accepted, in your mind, that if that eventuality occurred, he would not be bound to transfer a block of land and provide a house? A. That's right."

51 The second plaintiff also conceded in cross-examination that she understood the house was conditional upon a "successful outcome of the project": "Q. Is it your contention that at some time in the past, Mr Sunwoo had given you an undertaking to do …. build a residence consistent with the other ones to be built, whatever they looked like? A. He was going to build a house.

Q. And you know that Mr Sunwoo's capacity to do that and willingness to do that was dependent upon a successful outcome of the project? A. Yes."

52 The plaintiffs rely on a letter from the fourth defendant to the third plaintiff (addressed to the first and second plaintiffs) (on the letterhead of the third defendant) dated 30 October 1995 ("the letter"). The letter is quoted in full:

"RE: CONFIRMATION OF TERMS OF ENGAGEMENT FOR SERVICES RENDERED. This letter is to confirm that I, Hun Sunwoo, Director of Lakeside Golf Pty Ltd and Manager of Lakeside Property Trust acknowledge the work and successful performance of Chris Oliver and Jan Patterson in their professional role in which they performed as consultants with Optima Planning & Development Consultants and Optima Development Pty Ltd.

This engagement extends from August 1991 to present and has achieved all expectations for the Lakeside Golf Resort Developments in Wyong.

In remuneration for past service, I confirm my earlier undertakings to pay you by way of title to Lot 7 (or equivalent alternative number) on the Island within the resort and finished construction of a residence consistent with those planned for the estate which also includes associated taxation and stamp duty commitments.

In the event of me losing control of the project, I agree to the remuneration package being converted to an equivalent $ (dollar) figure."

53 On 30 October 1995, the plaintiffs, having prepared this letter, presented it to the fourth defendant, who was then persuaded by the plaintiffs to sign it. The first plaintiff deposed that a conversation took place between him and the fourth defendant to the following effect:

"I said …: 'Henry, I have prepared this letter which reflects and confirms what you owe us, please read it carefully'.

After reading the letter he said …: 'I am not signing that'. I then said …: 'Why not, its (sic) the truth, if not tell me what is wrong and I will change it.'

[Henry] then said …: 'This means you don't trust my word'.

I said …: 'Its (sic) the only true record we have and probably won't be worth the paper its (sic) written on if you go under'.

After lengthy discussions on the status of the project, latest developments on people [Henry] was trying to entice into the project and an update on the ANZ potential actions, I said …: 'Well, are you going to sign the letter or not?'

54 The fourth defendant deposed that the conversation between himself and the first plaintiff involved the following words from the first plaintiff:

"Oliver: 'If you want me to continue consulting for you, you need to sign this piece of paper. This piece of paper will only be good down the track if you make a profit out of the project, like we always intended, but I need a little bit of security at this time just so I know our agreement is formalised.'"

55 The fourth defendant says that he executed the letter on the understanding that it merely confirmed the arrangement whereby the plaintiffs would receive the house and land if they continued working until the project was completed and profitable. The first and second plaintiffs say that the letter confirmed the arrangement among the parties as it existed by 30 October 1995. "Q. If I can take you to the first paragraph, the first line, it says, 'This letter is to confirm', in other words you took this letter to not create any new rights but to confirm something which was already locked in place? A. Yes."

56 According to the oral evidence of the first plaintiff, the arrangement included a commitment by the fourth defendant to pay the plaintiffs the monetary equivalent of the house and land in the event that he sold the project in an incomplete state. This contention is based on a conversation between the first plaintiff and the fourth defendant on 29 October 1995:

"Q. Do you accept that the last two lines of this letter, the bit that refers to loss of control and the conversion of the remuneration package, was something which was added on to what you considered to be the original or the previous contractual arrangements? A. No, it relates to the conversation we had, 'If you sell it what happens?' and he said, 'I will give you money'.

Q. So you are saying that really arose out of the discussions you had on the previous day? A. Yes, that's right, yes.

Q. And it isn't something that you thought of since the conversation which Janet Patterson had with Mr Sunwoo at the council on the occasion of the A. No, no, no. That came out of the discussion I had with Mr Sunwoo the day before, on the 29th.

Q. Yes, that's right. It was something which was completely new to your arrangements until 29 October? A. That's right, because that's where the conversation had come up: If someone buys it, yes."

57 I note that the above conversation does not appear in the first plaintiff's affidavit. However, the fourth defendant conceded in cross-examination that he was obliged to pay the plaintiffs remuneration that was fairly based on their hours worked in the event that he was unable to transfer land to the first and second plaintiffs:

"Q. Do you accept that if you couldn't give them land A. Yes.

Q. For the work they had done for you A. Yes.

Q. You had to give them money? A. Yes, I am obliged to, that I said, yes, that's right.

Q. And you had to give them an amount of money that was fairly based on the hours of work that they had actually done for you? A. Yes, never asked, yes." 58 Therefore the parties intended that the availability of the house and land or the monetary equivalent would be conditional upon the plaintiffs continuing to work until completion of the project. Indeed, the first plaintiff in cross-examination referred to the plaintiffs being "virtually locked in", presumably by the conditional arrangement, to continue servicing the project. 59 The letter also appears to introduce the plaintiffs' entitlement to the payment "associated taxation and stamp duty commitments" by the fourth defendant. However the first plaintiff conceded that this additional commitment was never discussed with (nor agreed to by) the fourth defendant. 60 Hence, the alleged conversation on the 29 October 1995 and the letter of 30 October 1995 effectively varied the parties' agreement only to the extent that the fourth defendant would provide to the plaintiffs a monetary sum equivalent to the house and land in the event that he lost "control of the project". By 31 October 1995 the agreement therefore entailed a promise by the fourth defendant to either, transfer the house and land to the plaintiffs upon the profitable completion of the project, or pay them the monetary equivalent, in return for the provision of services by the plaintiffs until the project was completed. 61 Mr Newton of counsel for the defendants submitted that the agreement was unenforceable in relation to the promises of real property, due to the absence of a written note or memorandum in accordance with s.54A of the Conveyancing Act 1919. Section 54A(1) provides: - "No action or proceedings may be brought upon any contract for the sale or other disposition of land, unless the agreement upon which such action or proceedings is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged or by some other person thereunto lawfully authorised by the party to be charged." 62 The term "disposition" is widely defined under s.7 of the Conveyancing Act and at law: PT Ltd and Another v Maradona Pty Ltd (No 2) (1992) 27 NSWLR 241 at 249-250 (Giles J). The transfer of the house and land as promised by the defendants would constitute "a contract for … other disposition" within the meaning of s.54A. Indeed, the memorandum or note need not be contained in one piece of paper: Tonitto v Bassal (1992) 28 NSWLR 564 at 570 (Sheller JA). References to the promises of house and land in the handwritten note dated 21 October 1993, which enclosed copy of the proposed floor and site plans; the letter dated 28 October 1993 from the second plaintiff to the fourth defendant; the facsimile dated 4 January 1994 and the letter dated 30 October 1995, support a sufficient connection among the documents, so that together they constitute the necessary 'memorandum or note' for s.54A: Harvey v Edwards Dunlop & Co Ltd (1927) 39 CLR 302; Elias v George Sahely & Co (Barbados) Ltd [1983] 1 AC 646. The correspondence documents indicate the material terms of the contract (e.g. the parties, the property subject of the promised transfer, and conditions for the transfer) and the existence of a binding contract (Pirie v Saunders (1961) 104 CLR 149), including the signature of the fourth defendant on behalf of himself and the third defendant as the parties to be charged, and would thereby satisfy the requirement for writing. The plaintiffs' fees? 63 The plaintiffs say that they waived the right to unpaid fees by agreeing to provide their services for the promise of the house and land, or the monetary equivalent in the event that the defendants lost control of the project. In light of my findings on the terms of the agreement, it is unnecessary to consider any issue concerning fees owing to the plaintiffs in respect of the claim in contract. 64 I note that although the plaintiffs never demanded payment of their alleged fees (see paragraphs 19 to 21 above), the third and fourth defendants paid the plaintiffs from time to time, and the plaintiffs accepted those payments for remuneration and disbursements. It appears to be common ground that the fourth defendant represented to the plaintiffs that he would "catch up" with their fees of $1,000.00 per month, on several occasions including after he had promised them the house and land. A letter from the third and fourth defendants to the first plaintiff and Optima dated 6 July 1993 and the blank cheque given by the fourth defendant to the second plaintiff on or about the 21 February 1995 provide some evidence of the representations. Although the first and second plaintiffs insisted under cross-examination that they were entitled to fees in addition to the promised house and land or the monetary equivalent, they do not mention fees owing to them in the letter of 30 October 1995 by which they attempted to formalise their entitlements. I therefore find that the plaintiffs were content to be paid fees intermittently or otherwise at the discretion of the third and fourth defendants, and had looked to the promised house and land or the monetary equivalent as remuneration.

Official roles for the first and second plaintiffs? 65 The plaintiffs claim that the agreement was varied in or about early January 1995 to the effect that the first and second plaintiffs would provide additional services as the general manager and company secretary of the project, respectively, with the second plaintiff also running the office and controlling the sales and advertising staff. The defendants contend that the "general manager" and "company secretary" titles for the plaintiffs were merely for publicising the project, and that the duties of the first and second plaintiffs were to remain unchanged. 66 Business cards of the third defendant for the first and second plaintiffs bear their respective titles and they are referred to accordingly in incoming and outgoing correspondence. However, the first plaintiff conceded in cross-examination that there was no change to his role. I quote from his cross-examination: "Q. You say you were the general manager. Did you, in that regard, supervise anybody in relation to the project? A. No, the - Henry Sunwoo's office had no staff in it other than Janet Patterson and myself.

Q. So in terms of supervision, there was no change in your role at all? A. As far as--

Q. The project? A. There was - in terms of supervision, no.

Q. In terms of financial management of the project, did your role change at all? ….

…. Q. So in that respect, there was no change in the role you were playing at all? A. No.

Q. You continued to carry out town planning duties? A. Yes.

Q. And that role remained the same? A. The town planning duties, yes. They were pretty broad town planning duties, I might say.

Q. And you continued to consult with the type of consultants that one consults with on a big development project such as engineers and architects and the like? A. Yes.

Q. As you had done earlier? A. Yes."

67 The second plaintiff also conceded that she performed clerical services in relation to the project rather than the official duties of a company secretary. I therefore find that the styling of the first and second plaintiffs as "general manager" and "company secretary" was symbolic and not indicative of any real change to their duties. Performance 68 It is uncontroversial that the plaintiffs ceased providing services in November or early December 1995. The plaintiffs subsequently met with the fourth defendant in early January 1997. They agreed to resume servicing the project in return for the promise of the house and land, and accepted a cheque payment of $2500.00 from Lakeside Resort Pty Ltd. However, the plaintiffs later complained that the $2500.00 was inadequate and did not resume the provision of services. 69 The provision of services by the plaintiffs until completion of the project was a condition of the contract. The term was clearly essential to the nature of the contract and the third and fourth defendants would not have entered into the contract unless assured of a strict or substantial performance of the plaintiffs' promise to provide their services, which was arguably apparent to the plaintiffs: Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286; Associated Newspapers Ltd v Bancks (1951) 83 CLR 322. By ceasing to provide services in late 1995 before the project was complete, the plaintiffs breached a condition of the contract. Consequently, the third and fourth defendants could and did elect to treat the contract as discharged by ceasing interaction with the plaintiffs until the meetings in late 1996 or 1997. 70 In Shevill v Builders Licensing Board (1982) 149 CLR 620, Gibbs CJ provided (at pp.625-626): "… a contract may be repudiated if one party renounces his liabilities under it - if he evinces an intention no longer to be bound by the contract ( Freeth v Burr (1874) LR 9 CP 208) or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way ( Ross T. Smyth & Co Ltd v T.D. Bailey, Son & Co [1940] 3 All ER 60; Carr v J.A. Berriman Pty Ltd (1953) 89 CLR 327)." 71 The above passage has been referred to with approval in The Progressive Mailing House Pty Limited v Tabali Pty Ltd (1985) 157 CLR 17 at 33 (Mason J) and 40 (Brennan J), and in Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 634 (Mason CJ), 643 (Brennan J) and 664 (Gaudron J). 72 A repudiation can arise either from a party showing an intention not to be bound by the entire contract, or by showing that it does not intend to be bound by a term or terms which are of sufficient importance in the contract: Laurinda at 634 (Mason CJ) and 641-642 (Brennan J). The question of whether the party in breach has shown the sort of intention which enables termination to occur is decided not by reference to that party's subjective intentions, but rather by reference to how its conduct would appear to a reasonable person in the position of the other contracting party: Laurinda at 643, 647-648 (Brennan J), 657-658 (Deane and Dawson JJ) and 666 (Gaudron J). 73 When the plaintiffs failed to resume servicing the project in late 1996 or early 1997, their conduct reasonably amounted to a repudiation, which gave rise to another election by the defendants. The defendants were thus justified to discharge the contract formed in late 1996 or early 1997. 74 The discharges for breach and repudiation therefore rendered the respective contracts ineffective.

Partial performance of an entire obligation? 75 The principles applicable to entire contracts and entire obligations were set out in GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1 at 164-165 (Finn J). The relevant paragraphs are as follows: "(i) An entire contract, or an entire obligation, is one in which, or in relation to which, the consideration for the payment of money or the rendering of some other counter performance is entire, indivisible and not severable: Baltic Shipping Co v Dillon at 350; Steele v Tardiani (1946) 72 CLR 386 at 401; Phillips v Ellinson Brothers Pty Ltd [(1941) 65 CLR 221] at 233ff. (ii) If a contract or an obligation is entire its complete performance is a condition precedent to payment or counter performance: Phillips v Ellinson Brothers Pty Ltd ; Hoenig v Isaacs [1952] 2 All ER 176 at 181; see Chesire and Fifoot, Law of Contract , para 26.13. … (iii) The question whether a contract or an obligation is entire or is, in contrast, divisible, is a question of construction: Ownit Homes Pty Ltd v Batchelor [1983] 2 Qd R 124; Hoenig v Isaacs . …." 76 Whether or not a contract is entire depends on the construction of the contract. This is further supported by the High Court in Purcell v Bacon (1914) 19 CLR 241 at 249 (Griffith CJ, with whom Barton J agreed) and 265 (Isaacs, Gavan Duffy and Rich JJ). In light of the straitened circumstances of the project and the willingness of the first and second plaintiffs to be rewarded by sharing in the outcome of the project, the third and fourth defendants' obligation to pay became dependent on the plaintiffs completely performing their obligation. Specifically, remuneration by the house and land or the monetary equivalent was transferable or payable upon the plaintiffs working until the project was complete. Thus, the plaintiffs' duty to provide their services until the completion of the project may be construed as an entire obligation. By withdrawing their services before completion, the plaintiffs' performance was neither complete (see Cutter v Powell (1795) 6 Term Rep 320; (1795) 101 ER 573; Sumpter v Hedges [1898] 1 QB 673) nor sufficiently substantial (Hoenig v Isaacs [1952] 2 All ER 176; Bolton v Mahadeva [1972] 1 WLR 1009) to qualify for remuneration under the contract. Restitutionary claim for reasonable remuneration for services rendered 77 The plaintiffs also rely on a restitutionary claim for reasonable remuneration for their partial performance based on unjust enrichment. As privity of contract does not restrict claims in restitution, this claim potentially extends to all three defendants: see J Gadsden Pty Ltd v Strider 1 Ltd (The AES Express) (1990) 20 NSWLR 57; D. Fung, 'Benefit and the Volunteer in Restitutionary Claims for Services Rendered' (1991) 4 Journal of Contract Law 273 at p.274 (casenote); J.W. Carter and D.J. Harland, Contract Law in Australia (4th ed, 2002) at p.910. 78 To establish the restitutionary claim, the plaintiffs who are in breach of the contract, must prove first, that the defendants freely accepted their incomplete performance ("the enrichment"); secondly, that the enrichment was at the expense of the plaintiffs; and finally, that the defendants have been unjustly enriched: see Sumpter v Hedges; Steele v Tardiani [1946] 72 CLR 386. 79 K. Mason and J.W. Carter in Restitution Law in Australia (1995) at [1156] notes:

"Where the plaintiff has acted in response to a request found in a contract, the non-gratuitous intent on the part of the plaintiff is not enough to found a restitutionary claim, unless there is an independent basis for saying that the defendant has been unjustly enriched. Proof that the contract has been discharged for breach of repudiation, although clearly necessary, is not in itself a basis for restitution. …. Thus, although it is a necessary element of unjust enrichment that the defendant was benefited, a restitutionary claim for reasonable remuneration is not established merely by proof that the plaintiff has given, and the defendant has in fact received, partial performance. This signals that in claims for reasonable remuneration there must be something which is additional to a contractual receipt." [Footnotes omitted] 80 Hence, the element of free acceptance requires that the defendants to know about the non-gratuitous intent on the part of the plaintiffs, to have an opportunity to reject the plaintiffs' partial performance, and to voluntarily accept, acquiesce or otherwise waive their right to reject the partial performance. 81 The defendants were clearly aware that the plaintiffs had provided their services for reward. However, I am not satisfied that the defendants had an opportunity to reject the plaintiffs' partial performance, or had voluntarily accepted the partial performance. Indeed, the need to establish either an independent act of acceptance of the partial performance or that the defendant had acquiesced in the partial performance, makes it difficult for a plaintiff in breach to recover the cost of partially performing an entire obligation, particularly in the context of services where there will have been no opportunity to reject: see Mason and Carter (1995) at [1155]-[1159], [1162]-[1165]; J.W. Carter, 'Discharged Contracts: Claims for Restitution' (1997) 11 Journal of Contract Law 130; J.W. Carter & G. J. Tolhurst, 'Acceptance of Benefit as a Basis for Restitution' (2002) 18 Journal of Contract Law 1 at 22; S. Erbacher, Australian Restitution Law (2002) at pp.324-325, 327.

82 In Munro v Butt (1858) 8 El & Bl 739; (1858) 120 ER 275, the plaintiff builder who was in breach of his contract to perform work on houses of the defendant failed to recover reasonable remuneration because the fact of the defendant taking possession of the land on which the houses had been erected could not amount to his acceptance or waiver of the right to reject the partial performance. Lord Campbell CJ distinguished between cases involving the provision of services (in respect of real property) and goods (at p.280):

"…in the case of an independent chattel, a piece of furniture for example, to be made under a special contract, and some term, which in itself amounted to a condition precedent, being unperformed, if the party for whom it was to be made had yet accepted it, an action might upon obvious grounds, be maintained, either on the special contract with a dispensation of the condition alleged, or on an implied contract to pay for it according to its value; it does not seem to us that there are any grounds from which the same conclusion can possibly follow in respect of a building to be erected, or repairs done, or alterations made, to a building on a man's own land, form the mere fact of taking possession." 83 Thus, the defendant's voluntary and conscious choice to accept the proffered performance, although less observable in respect of services, is nevertheless critical to the restitutionary claim by a plaintiff in breach. 84 In Boston Deep Sea Fishing and Ice Company v Ansell (1888) 39 ChD 339, the defendant who was paid his salary on an annual basis and was dismissed during a year, sued on a quantum meruit for his salary for the part of the year he had worked. Bowen LJ said (at pp.364-365): "As regards his current salary, it is clear and established beyond all doubt by authorities which we should not be justified in overruling, even if we desired to do so, that the servant who is dismissed for wrongful behaviour cannot recover his current salary, that is to say, he cannot recover salary which is not due and payable at the time of his dismissal, but which is only to accrue due and become payable at some later date, and on the condition that he had fulfilled his duty as a faithful servant down to that later date. The authorities put the question beyond dispute, and principle also leads us to the same conclusion. He cannot sue in such a case on the original contract with the master, because the contract which is master has made is that he shall pay the salary only at the end of the current period which has not yet expired, and the servant by his wrongful conduct has prevented himself from suing for that salary by non-performance of the condition precedent under the contract. He cannot recover therefore on the special contract, nor can he recover on a quantum meruit , because he cannot take advantage of his own wrongful act to insist that the contract is rescinded. …. It is for that reason that it becomes plain beyond all doubt, as it seems to me, that the servant cannot sue on a quantum meruit any more than he can sue under a special contract." 85 The case of Sumpter v Hedges is also instructive. The English Court of Appeal held that the plaintiff builder had abandoned performance of the contract leaving buildings unfinished on the defendant's land and could not recover on a quantum meruit due to the fact that the defendant was not given "an option to take or not take the benefit of the work done": Collins LJ at p.676. In Nicholson v Burnett (1922) 25 WAR 101, where a plaintiff surveyor attempted to recover for work that did not meet the requirements of the contract, Burnside J (with whom Northmore J agreed) held that:

"… where work is done under a [services] contract, whether it is done on the chattels or land of one of the parties to the contract, the fact that the work has been partly performed does not give rise to any claim to be paid quantum meruit. A claim on a quantum meruit only arises where the contract is not for a complete work or where the work is of, such a nature that one of the parties has the option of accepting or rejecting it. But there the work was done on the defendant's land. He cannot take the survey off the land or off the plan, and the plan … is useless." (at p.104) 86 In Steele v Tardiani, where the plaintiffs recovered reasonable remuneration despite failing to cut firewood according to contract dimensions, Latham CJ provided: "In order to recover any payment in respect of such firewood the plaintiffs must claim upon a quantum meruit and such a claim cannot be allowed unless there is evidence of a fresh contract to pay for that firewood. It was strongly (and rightly) argued that the plaintiffs could not put the defendant in the position of having to pay for firewood not in accordance with the contract merely because he used or sold the firewood. Such use or sale is not in itself evidence of a new contract. The plaintiffs could not impose a new contract upon the defendant upon the basis that, unless he left the firewood to decay upon the ground, he became bound to pay them as if he had employed them on other than the contractual terms." (at p.394) 87 The High Court in Steele v Tardini held that a new contract could be implied from the circumstances under which the defendant had allowed the plaintiffs to split the timber in dimensions that did not conform to the contract, by not objecting while the timber was cut and then letting the plaintiffs leave the employment under the impression that the defendant was not insisting on the contract dimensions. Specifically, Dixon J (as he then was) (with whom Latham CJ and McTiernan J agreed) held at pp. 402-405: "it would be proper to treat the failure in complete performance as possessing little importance to the defendant and as acquiesced by him, with the consequence that the subsequent sale of the firewood might rightly be regarded by the learned judge as a taking of the benefit of the work and so, as involving either a dispensation from precise performance or an implication at law of a new obligation to pay the value of the work done." 88 In the present case, the defendants had no opportunity to reject the plaintiffs' services at the time the plaintiffs terminated their performance in 1995 by leaving the Chatswood office and ceasing communications with the defendants. That the defendants were willing to contract with the plaintiffs in late 1996 or January 1997 on the same terms (i.e. promises of the house and land for remuneration), or made some use of the work done by plaintiffs, does not affect the fact that they had no choice whether to accept or reject the plaintiffs' work at the relevant time. Moreover, the plaintiffs could not have reasonably expected to receive transfer of the house and land or the monetary equivalent, by their repudiation of the contract. This case is therefore distinguishable from Steele v Tardiani where the defendant could have insisted on the plaintiffs putting the firewood into the contract dimensions. 89 In the absence of a voluntary choice to accept the proffered performance by the plaintiffs, the claim for reasonable remuneration based on a quantum meruit fails. Estoppel and statutory claims 90 The plaintiffs' estoppel claim is based on a conversation between the second plaintiff and the fourth defendant in or about August 1995, a statement by the fourth defendant on 29 October 1995 and the letter of 30 October 1995. Specifically, the plaintiffs contend that the fourth defendant on behalf of all defendants had, through the abovementioned communications, represented to the plaintiffs that they would receive the house and land (or an equivalent alternative lot) including payment of associated taxation and stamp duty commitments, or the monetary equivalent. The plaintiffs allegedly relied on the representations to their detriment by choosing the block of land and waiving their right to any fees owing to them pursuant to the contract; thereby giving rise to an estoppel against the defendants denying that the land is charged with the promises. 91 The estoppel claim necessarily fails in light of my findings on the conversations and the letter of 30 October 1995 (see paragraphs 44 and 45 and 52 to 60 above). Specifically, the relevant representations were: that the third and fourth defendants would either, transfer the house and land to the plaintiffs upon the profitable completion of the project, or pay them the monetary equivalent; and all parties understood that the promises were conditional on the plaintiffs working until the project was completed.

92 The plaintiffs further claim that the various representations made about remuneration by the fourth defendant on behalf of all defendants, during August 1991 to January 1997, are actionable on the basis of sections 51A and 52 of the Trade Practices Act and sections 41 and 42 of the Fair Trading Act. The plaintiffs' case is that the statements - that the first and second plaintiffs would be paid their outstanding and further fees, that they were allocated shares in the Lakeside Property Trust, that they would be paid for their services by transfer of the house and land or the monetary equivalent, were all representations by the fourth defendant in his personal capacity and on behalf of the second and third defendants, with respect to future matters as referred to in sections 51A and 41. As a result, the plaintiffs contends, an absence of reasonable grounds on the part of the defendants for the making of the representations caused them to be misleading (s.51A(1), s.41(1)), so that, under sections 51A(2) and 41(2), the burden in any proceedings would be upon the defendants to show that they had reasonable grounds. From there, the plaintiffs argue that, because, in this case, the defendants do not attempt to put forward any such reasonable grounds, the representations are placed by s.51A and s.41 within the ambit of sections 52 and 42 the non-correspondence between the subject matter of the representations and the events which eventually unfolded means that a breach of sections 52 and 42 is established and the various statutory consequences, in terms of orders of the court, would be available, including orders requiring one or more of the defendants to compensate the plaintiffs for their consequent loss or damage. 93 I consider the impugned representations before determining whether the defendants had reasonable grounds for making the representations. It is necessary to take into account the overall context in which the representations were made: see Pappas v Soulac Pty Ltd (1983) ATPR 40-411 at p.44,782 (Fisher J); Elders Trustee & Executor Co Ltd v E.G. Reeves Pty Ltd (1987) ATPR (Digest) ¶46-030 at p.53,086 (Gummow J). In particular, Deane and Fitzgerald JJ in Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 199, provided that: "The question whether particular conduct of which complaint is made is misleading or deceptive or likely to mislead or deceive is, in the ordinary case, a question of fact to be answered in the context of evidence as to the alleged conduct and as to the relevant surrounding facts and circumstances." 94 Similarly in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 199, Gibbs CJ held that: "The case of a defendant must be viewed as a whole. It would be wrong to select some words or act, which, alone, would be likely to mislead if those words or acts, when viewed in their context, were not capable of misleading. It is obvious that where the conduct complained of consists of words it would not be right to select some words only and to ignore others which provided the context which gave meaning to the particular words." 95 Here, the representations were made over a period of time during which the arrangement among the parties was varied on several occasions. I have already found that the first and second plaintiffs came to accept that their fees would be paid at the discretion of the third and fourth defendants and that the house and land or monetary equivalent was conditional upon their servicing the project until it was complete. On the first plaintiff's evidence, the first plaintiff knew that the allocation of shares in Lakeside Property Trust was overtaken by the plaintiffs' choice to accept the promise of land. Consequently, the representations were not capable of misleading or deceiving when taken in their context wherein the parties had agreed that that fees need not be paid, that the transfer of house and land or the monetary equivalent would replace the allocation of shares in Lakeside Property Trust and was conditional upon the plaintiffs servicing the project until its completion. Moreover, the context of the representations would also negative the element of the plaintiffs' reliance necessary for the causal connection between actionable conduct and the loss or damage suffered for the purpose of the Acts. 96 Mr Newton submits that the claims are barred under the three year limitation periods imposed by the applicable versions of the Trade Practices Act (s.82(2)) and the Fair Trading Act (s.68(2)), respectively. The cause of action under s.82 of the Trade Practices Act accrues when the loss or damage is suffered as a result of the contravention of s.52: see Fenech & Anor v Sterling (1983) ATPR ¶40-413 at p.44,812 (Davies J); Arcadi v Colonial Mutual Life Assurance Society Ltd (1984) ATPR 40-473 at p.45,454 (Toohey J); James & Ors v ANZ Banking Group Ltd & Ors (1986) ATPR ¶46-005 at p.53,035 (Toohey J). Similar considerations apply to the Fair Trading Act. In light of my findings, there is no relevant loss or damage to activate the statutory remedies under the Trade Practices Act or the Fair Trading Act. Conclusion 97 In the result, therefore, the plaintiffs' claim fails in all its branches and they are not entitled to any relief. The proceedings are therefore dismissed with costs. **********

18/10/2005 - Plaint number and name of Defendant not uniform on cover sheet and heading of judgment - Paragraph(s) There are no paragraph numbers - headings only

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