Robert William Whitton Trustee of the Bankrupt Estate of John Emmanuel Rose... [2006] NSWSC 390 | Case summary

REASONS FOR DECISION 1 The Respondents seek orders for dismissal of the proceedings and the Applicant raises an interesting argument against the Respondents, asserting that the Respondents are estopped from proceed further with this litigation. 2 In order to properly address both issues it is necessary to go back in time. These proceedings and connected proceedings have a long and distinguished history and it is appropriate to review that before coming to any decision on the question of firstly, estoppel and secondly, the Motion for Dismissal. Background 3 The First Respondent brought proceedings in this Tribunal in 2002 seeking a declaration of rights arising out of a dispute between the First Respondent as lessee and John Emmanuel Rose ("Rose") as lessor pertaining to premises known as 724 Darling Street Rozelle ("the premises") pursuant to registered lease 0542508 ("the Lease"). 4 Those proceedings involved an analysis of the terms of the lease in relation to the exercise by the First Respondent as lessee of its option for the second option term under that Lease commencing 13 March 2002 in respect of which no agreement had been reached as to the rent payable for that second option term. 5 In Batson Holdings Pty Limited v. Rose [2002] NSW ADT110 (28.06.02) I made certain declarations relating to the construction of the Lease and I declared that the valuations provided by each of the parties had not been prepared in accordance with the relevant principles that apply to the calculation of current market rent having regard to the terms of the declarations of rights and liabilities contained in that Judgment. 6 There are a number of complexities in relation to the premises. Firstly, the premises were in fact a liquor bottle shop. Secondly, the adjoining premises (a hotel) were the subject of a hotelier's licence. Thirdly, the Licensing Court had defined the licensed premises (applicable to the hotel) to include the "adjoining retail shop" which was in fact the demised premises at 724 Darling Street Rozelle. There was a further complexity as well: Additional Clause 19 provided firstly that the initial grant of the Lease was "subject to the granting of authorisation by the Licensing Court of (NSW) in respect of the redefinition of the tenant's existing adjoining licensed premises under an existing licence to extent to the area comprising the property leased"; secondly, it was the First Respondent's obligation as lessee to apply for all necessary approvals, consents and so on; and thirdly, if the approvals were refused or the permitted use was required to be discontinued or the Licensing Court declined to authorise the redefinition of the Lessee's licensed premises to include the area of the property leased, the Lessee "shall be entitled to terminate this lease by giving fourteen (14) days notice in writing to Rose". 7 Nothing further took place with regard to the valuation question. Rather, by Application filed 17 March 2003 and subsequently amended, Rose sought certain relief against the First and Second Respondents, primarily seeking a declaration that the First Respondent and the Second Respondent (the latter of whom was then in occupation) give up vacant possession of the premises. The hearing on these issues occupied three hearing days, and I delivered my Decision 16.12.2004 in Rose v. Batson Holdings Pty Limited & Anor [2004] NSW ADT268. In those proceedings I declared that Rose was entitled to terminate the lease 0542508 between himself as Lessor and the First Respondent as Lessee in respect of the Premises, forthwith. And I ordered the Second Respondent to forthwith give up vacant possession of those Premises. I stood over for further consideration various other matters. 8 Batson Holdings Pty Limited and Laundy Investments Pty Limited appealed from that decision by Notice of Appeal filed 13 January 2005. The grounds of appeal were amended by Amended Notice of Appeal filed 18 May 2005. His Honour the President granted two stays of proceedings, there were various Directions made and ultimately, on 2 March 2006, and by consent, the appeal was dismissed. The outstanding issues were referred back to me for determination. 9 There were then further proceedings, there were various files created in the Tribunal, and I reviewed the history of these files in my Judgment 14 June 2005 (Batson Holdings Pty Limited v. Rose [2005] NSW ADT131). As a matter of record I record that on 14 February 2006 and upon the application of Batson Holdings Pty Limited and not opposed by the Trustee of the bankrupt Estate of Rose (as to which see below) I dismissed matters No. 035134 and 055009. 10 The current proceedings arose because to continue the application 035020 (in relation to the consequences of the declarations that I made 28 June 2002 (para [5] above) with regard to the valuation question) required further attention to the production of appropriate valuations in accordance with the relevant principles that I identified, then, armed with those valuations, and assuming that they complied with the relevant principles, it would then fall to the Tribunal (absent agreement) to determine what rent was payable at the relevant times and whether or not (as a result of that determination) moneys were to be paid by the tenant or refunded to the tenant. 11 So, by Application filed 7 May 2003 the First Respondent sought an order against Rose that he execute a lease for certain periods, seeking an order that the rent be reviewed in accordance with my decision 28 June 2002, alleging various breaches of various clauses of the lease by Rose, seeking damages, interest and other orders. Batson filed, on 24 April 2004, a valuation report which Batson contended complied with the principles set out in my Judgment 28 June 2002. 12 On 24 January 2005 I directed that various Tribunal files be consolidated and heard together. Over the years there were various Directions Hearings, adjournments and other activities and ultimately came to a head because Batson submitted, with considerable force, that Rose should serve its material in reply. 13 There was then an extensive argument relating to the financial and legal ability of Rose to comply with my directions. Those matters I dealt with in a Judgment 14 June 2005 (Batson Holdings Pty Limited v. Rose [2005] NSW ADT131). In view of the state of the finances of Mr Rose and various Orders made by the Family Court of Australia I granted a stay, listed it for further consideration at a future date and made various limited orders for costs. Bankruptcy of Applicant 14 Unfortunately, the financial position of Rose deteriorated. Ultimately, and pursuant to Bankruptcy Act 1966, Section 156A, he filed a Debtors Petition and Mr Robert William Whitton, the current Applicant, was appointed of Trustee Rose's bankrupt estate. 15 I formed the view that the proceedings should be regularised and I directed that the Trustee file an appropriate Notice of Motion in the Tribunal seeking an appropriate order that he be substituted for the Applicant, Rose. This Motion was subsequently filed 19 July 2006 and on 20 July 2006 and by consent Mr Whitton was substituted as the Applicant in these proceedings. 16 Prior to the substitution all parties agreed that proceedings 035134 and 055009 be dismissed. A formal Order was made to that effect on 14 February 2006. Furthermore, and consistent with regularising Directions made by me, the Trustee made a formal election to have the following outstanding issues determined by the Tribunal in matter No. 035020: a. claim for retrospective rent; b. claim for unpaid outgoings. Those then remained the outstanding matters before the Tribunal, subject to any outstanding questions relating to costs. 17 On 6 July 2006 I directed the Trustee to file and serve Points of Claim, with appropriate Particulars, no later than 18 July 2006, these to include the Orders that the Applicant seeks. I have made observations previously, and regularly, on the need, in this Division, to provide appropriate pleadings and particulars as may be necessary in order to properly appraise, not only the Tribunal but also the other party of the Orders that are being sought. After all, this is a commercial Division of the Tribunal and, absent particularity, the parties and the Tribunal run the risk of falling into error by not addressing the real issues between the parties. 18 Pursuant to those directions on 19 July 2006 the Trustee filed formal Points of Claim and a formal document styled "Orders Sought". These "Orders Sought" are in the following terms: 1. An order that the Respondents pay Rent from 13 March 2002 to 13 March 2005 in accordance with the terms of the valuation for the Leased Premises by Laing & Simmons filed in these proceedings after deducting rent paid for that period in the sum of $9,243.24. 2. An order that the Respondents pay Rent from 13 March 2005 to 13 May 2005 in accordance with the terms of the valuation for the Leased Premises by Laing & Simmons filed in these proceedings after deducting rent paid for that period in the sum of $9,900.00. 3. An order that the Respondents pay 50% of the Rates and Insurance being Outgoings payable by the Lessee in accordance with Clause 5 and Item 13B(a) and (d) of the Lease of the Leased Premises in the sum of $22,777.10. 4. An order that the Respondents pay 50% of the Land Tax applicable for the building of which the Leased Premises is part being Outgoings payable by the Lessee in accordance with Clause 5 and Item 13B(c) of the Lease of the Leased Premises in the sum of $16,309.02. 5. An order that the Respondents pay Costs. 6. An order that the Respondents pay 50% of the Cost of the valuation for the Leased Premises by Laing & Simmons filed in these proceedings in accordance with Clause 5.20 of the Lease of the Leased Premises in the sum of $2,750.00. 7. An order that the Respondents pay Interest. It will be seen, therefore, that there is not a small amount in issue. In addition, the Trustee had filed and served a sworn valuation, submitted to be in accordance with the principles set out in my decision 28 June 2002. Motion for Dismissal 19 By Notice of Motion filed 28 July 2006 the First and Second Respondent sought determination of a preliminary point. The First Respondent sought dismissal of the Orders sought by the Trustee pertaining only to the payment of rent and the Second Respondent sought dismissal of all the Orders sought by the Trustee. It was to those issues a hearing took place on 18 August 2006 with subsequently filed Written Submissions. Preliminary Observations 20 By Judgment 28 June 2002 ([2002] NSW ADT110) I reviewed the relevant clauses of the lease relating to rent review. It will be remembered that the First Respondent had exercised the second option but the parties were unable to agree on the amount of the new rent and Clause 5.16 of the Lease required that the current market rent would be decided by a valuer appointed by the President of the Law Society. 21 The issues then before the Tribunal were agreed and these are set out in paragraph [10] of that Decision as follows: "A. Identification of the appropriate method as to how current market rent is to be payable by the tenant (Lessee) upon the exercise of the option to renew the Lease; and B. Whether or not the valuations provided by each of the parties is in accordance with the appropriate method of calculation of the current market rent." 22 At the risk of being repetitive, in that Judgment I set out the principles to which a specialist retail valuer so appointed should have regard. I also determined that the valuations provided by each of the parties were not in accordance with the appropriate principles determining the method of calculation of the current market rent as required by the terms of the Lease. 23 At [12] I observed that neither party had simply asked the President of the Law Society "to nominate a person who is a licensed valuer to decide the current market rent (Clause 5.16)". The difficulty, so it seems, is that neither party wished to approach the President, presumably for the reason that neither party wished to take the "calculated (or risky) punt because if the valuer acted properly then he acts as an expert and not as an arbitrator and both parties would be bound by his decision" [12]. 24 At [13] I made this observation: "Neither party seemed terribly enamoured with this course of action. No party seemed to want to put their commercial future with regard to these premises in the hands of a valuer appointed pursuant to clause 5.16. Rather, they seem to want a determination in accordance with the issues put before this Tribunal with a view (as I understood it) to enable them to reach an agreement themselves without recourse to the rather deadly and final clause 5.16 mechanism". 25 And, again at the risk of being repetitive, no party sought to re-agitate the question of the correct valuation for the second option period until Mr Rose sought orders in these proceedings against the First Respondent seeking payment of "a sum, to be calculated in accordance with the orders made June 28, 2002 by Judicial Member Molloy in proceedings between the parties, for unpaid rent" and orders for the payment of outgoings and consequent orders. 26 There was one matter that was not dealt with in the previous proceedings. In those proceedings attention was directed to, and limited to, various specific clauses in the lease, namely clauses that related peculiarly to the determination of rent at the various rent review dates. Primarily, these were clauses 5.12 - 5.20 inclusive. But there was one clause which was not the subject of any argument and not the subject of any determination, namely clause 5.21. It is that clause that is now relied upon by the respondents. 27 Clause 5.21 is in these terms: "5.21 If the landlord and tenant do not agree upon a valuer and neither asks for a valuer to be nominated before - 5.21.1 the next review passes; or 5.21.2 this lease ends without the tenant renewing it; or 5.21.3 this lease is transferred after the next review date when the landlord's consent; or 5.21.4 the property is transferred after the next review date then the rent will not change on that rent review date." See, in this regard, G.R. Mailman & Associates Pty Ltd v. Wormald (Aust) Pty Ltd (1991) 24 NSWLR 80. 28 It will be remember that the second option was for the term 13 March 2002 - 12 March 2005. It is now plain, and uncontested, that at no time did the parties agree on the current market rent in respect of the second option period. Nor did they agree upon a valuer nor did any party ask the President of the Law Society to nominate a licensed valuer. It is also clear that on 16 December 2004 I declined to grant relief forfeiture, declared that Rose was entitled to terminate the lease with the First Respondent, and ordered the Second Respondent to vacate the premises and it is acknowledged that on 23 May 2005 the First Respondent gave notice to Rose of its intention to quit the premises on 24 June 2005 and in fact vacated the premises on or before that day. 29 In these circumstances the Respondents' contend that because the lease ended without the First Respondent renewing it (either by force of the declarations and orders made by me on 16 December, 2004 or the vacation of the premises on or before 24 June 2005, and in the latter event after 12 March 2005), without prior agreement upon a valuer, and without a request for a valuer to be nominated by the President of the Law Society, therefore the rent did not change on 13 March 2002 (the date of the second option period) and therefore the Applicant's claim for increased rent is simply misconceived. Furthermore, as I understand it, it was submitted that the Applicant's claim for increased rent during the holding over period from 13 March to 13 May 2005 is also misconceived because, there being no increase in rent for the second option period and the rent therefore not having changed on 13 March 2002, the First Respondent was only obliged to pay rent at the same rate as it was obliged to pay just before the lease ended. The Applicant relied on Clause 12.4.1 which states that in the event of a holding over the tenant becomes a monthly tenant and must go on paying the same rent and other money in the same way that the tenant had to do under this lease just before the lease period ended (apportioned payable monthly). And because the First Respondent had not taken up the third option (13 March 2005-12 March 2008) then the rent continued unchanged in any event, and the combined effect of Clauses 5.21 and 12.4.1 again operated to keep the rent unchanged. Applicant's Submissions 30 The importance of the submissions of the Respondents cannot be over-emphasised - if the Respondents are correct then that is the end of this matter save as to any argument relating to costs (reserved by me on 14 February 2006). It is therefore appropriate to carefully analyse the submissions made on behalf of the Applicant. The Applicant, it will be remembered is the Trustee of the bankrupt estate of Rose, the lessor. The Applicant has formally elected to proceed with this aspect of the multi-faceted litigation between the parties, no doubt in the interests of the bankrupt estate and creditors. 31 The Applicant put its submission in the following fashion. Firstly, it submitted given the way that the proceedings had progressed the Applicant was entitled to assume that there was "a common understanding that the Respondents were not going to rely on Clause 5.21." Accordingly, the Applicant refrained or abstained, from requesting a valuer to be nominated such that the Applicant would now suffer a detriment, namely loss of the right to recover market rent, if the Respondents are permitted to assert rights inconsistent with that assumption. It was submitted that an estoppel arose in favour of the Applicant. 32 Secondly, in the alternative it was submitted that because the Second Respondent went into occupation of the premises without the permission of Rose therefore the Second Respondent was not entitled to rely on Clause 5.21. It was submitted that the Applicant is entitled to damages "in the form of market rent lost up until the Second Respondent quit the premises on 24 June 2005 as well as the claim for half the outgoings". It was also submitted (but without any evidence) that the Respondents failed to pay rent between 13 March 2005 and 24 June 2005 such that "there were fundamental breaches of covenants in these circumstances (which themselves) give rise to repudiation of the lease and a claim for damages quite outside the lease". 33 It was then submitted that because the Trustee made the election under Bankruptcy Act Section 60(3) on 22 February 2006 "in very general terms" and by the election the Trustee did not exclude his right to seek a determination in relation to damages but rather elected "to prosecute ADT Proceedings 035020", and by letter 12 April 2006 the Trustee wrote to the Respondents' solicitors electing to have the claims for "retrospective rent" and "unpaid outgoings" determined by this Tribunal, all this was sufficient to comply with Section 60(3) and accordingly the Applicant should be allowed to argue the damages. Respondents' Submissions in Reply 34 Firstly the Respondents deny that there was any "common understanding" as asserted to the effect that the Respondents were not going to rely on Clause 5.21. They submitted that clause 5.21 says nothing about procuring a valuation but rather is directed to "the circumstances in which the rent will not change on a rent review date". 35 Secondly, it was submitted that the Applicant's submissions were contrary to the facts found in the previous proceedings in my Judgment 28 June 2002. More importantly, there was "no evidence of any facts on which such an estoppel (as asserted) might be based, in particular of the Applicant's alleged assumption (that the Respondents would not rely on Clause 5.21) or the Respondent's denial of it in a way that would be unjust". 36 Nextly, it was submitted that there was no part of the election of the Applicant to proceed with any damages claim against the Second Respondent. Indeed, it was submitted that no damages claim against the Second Respondent was made at all in the proceedings as they were framed up to the time of the Trustee's election 22 February 2006. And neither was such a claim made in the original Orders sought, nor in the amended Orders sought nor in the Points of Claim, nor in the Orders Sought of the same date. Reasoning 37 In setting out the above I have omitted those portions of the Written Submissions that refer to disputed facts that are not the subject of any sworn material but rather simply asserted. 38 The Applicant's Submissions were based on a form of estoppel that arises, so it is said, because the parties elected to proceed along a certain line, having made that election back in 2002 when they approached the Tribunal in the circumstances set out in my Judgment 28 June 2002. A certain course was said to have been taken by both parties and therefore there was a waiver by the First Respondent of reliance on Clauses 5.12 - 5.20 of the lease. The Respondents relied on paragraphs [12] - [13] of my Judgment and also (although not referred to) paragraph [14] where I observed that "the Tribunal not only has jurisdiction but also should determine the issues as placed before it as the parties wish those issues to be determined and as the parties have commercially rationalised their respective positions". 39 Once might also look at the issue in the reverse: what would have been the view of the First Respondent had Rose, after having obtained my Judgment 28 June 2002, then approached the President of the Law Society pursuant to Clause 5.16? That Clause said: "The landlord and the tenant can either agree upon a valuer or can ask the President of the Law Society of New South Wales to nominate a person who is a licensed valuer to decide the current market rent". Would it have been possible for the First Respondent to have asserted that somehow Rose was estopped from approaching the President of the Law Society, or alternatively that he had waived his contractual entitlement to approach the President? 40 In my opinion the answer to this question is: "No". When one takes the whole of my Judgment 28 June 2002 into account, in my opinion, although the parties both wished the Tribunal to determine the issues then put to the Tribunal, there was nothing in that Judgment that would have disentitled either party to rely upon Clause 5.16. All the Judgment did was determine or declare the appropriate method of calculation of current market rent under the terms of the lease and then, having made that determination, I declared that the valuations provided by each of the parties had not been prepared in accordance with the relevant principles. In paragraph [56] I stated: "I have done what the parties have asked of me by declaring their rights ..". In [57] I noted that the parties may wish to agitate other relief as specified in the then filed Application and I granted liberty to either party to restore the matter to the list and I directed the parties seeking to so restore to give notice to the Tribunal and the other party of "precisely what additional or other relief the party wishes to obtain from the Tribunal". 41 Thus, it seems to me, the parties were both at liberty to bring the matter back before the Tribunal, alternatively, or in addition, to approach the President of the Law Society. This latter option was always (in my opinion) available to either party. It may well be that it was an option that either they did not consider, or considered and rejected, or otherwise simply wished to let the matter lie and argue other points, or somehow felt morally (as distinct from legally) bound to agitate the valuation before the Tribunal. But in all cases it seems to me that there was nothing to stop Rose or the First Respondent from going outside the Tribunal and relying simply upon the terms of the contract. In my view there was nothing that would have even remotely amount to a waiver. There is no question that waiver and estoppel are related, since "waiver" is not a precise term in law. In its correct usage, "waiver" "refers to the unilateral abandonment or renunciation of a personal or private right, claim, liberty, contention or remedy". Waiver may occur in the absence of either an alternative inconsistent right or reliance by another on its detriment. However, the term is more broadly used in the sense of election and estoppel - see the discussion on this issue in "Unconscionable Conduct" Ed. Paul Vout, LawBook Co. 2006 at [35.6:104]. In my view, in order that it might be said that either party had waived its entitlement to rely on the lease contract one would need strong and cogent evidence supporting that conclusion. In my opinion, there is nothing in my Judgment 28 June 2002 nor in the course of the numerous proceedings between the parties thus far, that could result in that conclusion. 42 That leads me to consider the issue of estoppel. 43 There are a number of basic assumptions required to set up an estoppel. Firstly, the party claiming the estoppel must have adopted the assumption as the basis of an act or omission. Secondly, that party on the basis of the assumption, must have so acted or abstained from acting that a detriment will be suffered if the person against whom the estoppel is asserted (Rose) is afterwards allowed to set up rights in consistent with it. Thirdly, the party against whom the estoppel is alleged (Rose) must have played such a part in the adoption of or persistent with the assumption that freedom to act otherwise than in a manner consistent with it would be unfair or unjust (see "Unconscionable Conduct" at [35.6:41]. 44 The legal principle of estoppel is a difficult principle with which to wrestle. It would be fair to say that it is "a substantive rule of law that operates to preclude a party to legal proceedings from asserting against another party a factual or legal state of affairs which is inconsistent with another assumed state of affairs" - see "Unconscionable Conduct" Ed. Paul Vout, Law Book Company 2006 at 127. The party claiming the estoppel (in this case the Respondent) must have adopted the assumption as the basis of an act or omission. They must have so acted or abstained from acting that a detriment would be suffered if the Applicant is thereafter allowed to set up rights inconsistent with it. Lastly, the Applicant must have played such a part in the adoption of, or persistence in, the assumption that freedom to act otherwise than in a manner consistent with it would be unfair or unjust. On the facts as asserted by the Respondent the estoppel asserted is probably of the type described as "estoppel by representation" - the principle was defined in Pickard v. Sears [112 ER 179] as being that "where one by his words or conduct wilfully causes another to believe the existence of a certain state of things, and induces him to act on that belief, so as to alter his own previous position, the former is precluded from averring against the latter a different state of things as existing at the same time" (per Lord Denman CJ at 474). 45 Jordan CJ in Franklin v. Manufacturers Mutual Insurance Limited (1935) 36SR (NSW) 76 at 82 said that it would be necessary to establish the following: "the Claimants by word or conduct, reasonably likely to be understood as a representation of fact, as contrasted with the mere expression of intention, in such circumstances that a reasonable man would regard himself as invited to act upon it in a particular way, and that the representation should have been material in inducing the person to whom it was made to act on it in that way so that his position would be altered to his detriment if the fact were otherwise than as represented." I think that is the form of estoppel asserted by the Respondents. 46 Perhaps this could also be described as "conventional estoppel, where parties conduct themselves in such a way that their legal rights would be changed". 47 In Young v. Lalic [2006] NSW SC 18 Bereton J deal with equitable estoppel at [73]-[74]. His Honour made these observations: "Equity comes to the relief of a Plaintiff who has acted to his or her detriment on the basis of a fundamental assumption in the adoption of which the Defendant has played such a part that it would be unfair or unjust if he or she were left free to ignore it, on the footing that it would be unconscionable for the Defendant to deny the assumption ... It is essential to an equitable estoppel that the Defendant knows or intends that the party who adopts it will act or abstain from acting in reliance on the assumption or expectation ... the matters which a Plaintiff must establish to found an equitable estoppel may be characterised as including certain conduct of the Plaintiff, certain conduct of the Defendant and certain qualities of the subject matter ... as to the conduct of the Plaintiff: that the Plaintiff acted (or abstained from acting) in reliance upon an assumption or expectation that a particular legal relationship existed or would exist between the Plaintiff and the Defendant ... as to the conduct of the Defendant: that the Defendant induced the Plaintiff to adopt the assumption or expectation and encouraged the reliant activities of the Plaintiff, or at least failed to deny the assumption or expectation with knowledge that the Plaintiff was relying upon it to the Plaintiff's potential detriment ...". 48 In Comptroller-General of Customs v. Parker [2006] NSWSC 390 Simpson J. observed at [82] that there are "three elements generally accepted as necessary before the doctrine of estoppel can be activated to protect the party claiming its benefit. These are: i) a representation by one person as to a present, past or future state of affairs (including a legal state of affairs); ii) inducing another person to act in a particular way (sometimes called reliance); iii) detriment suffered by the second person in the event of subsequent denial of the representation by the first person". 49 The NSW Court of Appeal in M K & A J Roche Pty Limited & Ors v. Metro Edgley Pty Limited & Anor [2005] NSW CA39 at [72] made this observations: "the relevant principle is that "the law should not permit an unjust departure by a party from an assumption of fact which he has caused another party to adopt or accept for the purpose of their legal relations" ..., this involving both (1) action such that the party relying on the estoppel would suffer a detriment if the other party would afterwards allowed to set up rights inconsistent with the assumption; and also (2) that the parties against whom the estoppel is asserted "must have played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it" ... common law estoppel by representation or conventional estoppel still requires that the party relying on the estoppel must have "placed himself in a position of significant disadvantage if departure from the assumption be permitted"". 50 It is worthwhile noting that there is a consistent thread that runs through estoppel cases and that is there must be some conduct the person against whom an estoppel is asserted upon which the other party relied to their detriment. In Waltons Stores (Interstate) Ltd v. Maher (1988) 164 CLR 387 the conduct was that of the lessee upon which the lessor relied in demolishing the premises. In Traywinds Pty Ltd v. Cooper (1989) 1 QdR 223 (FC) again it was the conduct of the lessee which induced the lessor to believe that a lease existed, although irregularly created. 51 There is no "evidence" before me that would support a conclusion that Rose or the Applicant had any belief at all relating to the actions of the Respondents nor whether, and reversing the submissions, that Rose, or any party for that matter, believed that they could or would not rely upon the terms of the lease contract. I am unable to see that there was any action taken by either party that would have led the other party to conclude that any party had acted inconsistently with the lease contract. In my opinion one needs to be very careful before one is able to reach that conclusion. 52 In the current matter it cannot be said that either Respondent had made any promise to the Applicant or Rose, it cannot be said that either Respondent had acted in such a way to induce the Applicant or Rose not to rely on the terms of the lease contract, neither can the reverse be said because if I am right, then the argument of the Applicant would apply equally to the Respondents in that the Respondents could assert that the Applicant and Rose were estopped from approached the President of the Law Society. After all, the facts asserted by the Applicant to support the estoppel and waiver arguments are exactly the same as the facts asserted by the Respondents, such that it cuts both ways. 53 The evidence support of an estoppel, and/or a waiver must be strong, cogent, clear and unambiguous. I cannot see anything in the material that would support that conclusion neither can I see anything that would support the conclusion that a reasonable person would believe that by the proceedings in the Tribunal the parties had otherwise abandoned their reliance on the lease contract and, in particular, clause 5.21. 54 In my opinion neither party has exercised rights inconsistent with the terms of the lease contract such that it would be estopped by its conduct from relying on the contract (cf Craine v. Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305). This is not a situation where it could be said that the Applicant or Rose, or any party, had approbated and reprobated in the sense of approaching the Tribunal in 2002 and then seeking to rely on the contract in 2006. They were two different issues. 55 Indeed, it is worthwhile having a brief look at my decision 16 December 2004 ([2004] NSW ADT 268). In reciting the chronology I observed at [4(f)] that the First Respondent had exercised the second option for renewal, that a dispute arose between Rose and the Second Respondent regarding the method by which the new rent for the new term should be determined and that "this dispute was resolved but in principle only, by my decision 28 June 2002 … but no party has taken that further such that, as I understand it, there has been no final determination or agreement as to the rent payable from and after 13 March 2002". Secondly, on 5 February 2003 Rose delivered a Notice under Conveyancing Act 1919, Section 129(8) to the First Respondent. Thirdly, that Notice (held by me to be valid) pleaded breaches of Clauses 10.7 and 5.1.2 of the Lease and breach of the covenant not to transfer without consent (in circumstances where there Second Respondent had by that stage become the business owner of the hotelier's licence for the next door hotel, had also become the license owner and the premises owner of those licensed premises which premises (it will be remembered) included the demised premises by the re-definition of the licensed premises by the Licensing Court. Nextly, in that Judgment I formed the very clear view that there had been a clear breach of Clause 10.7 "which breach has not been rectified". 56 When one looks at the terms of the decision 16 December 2004 one can see [33] considerable reliance upon the terms of the lease contract. I formed the clear view that there was, not only wilful breach of the lease but also that relief against forfeiture should not be granted at the suit of the Respondents. Indeed, and on the question of estoppel at [45] I rejected the proposition that Rose was estopped or had waived his rights, under the lease. I formed the clear view that there was "no conduct that is capable of amounting to an estoppel … (there) was no conduct of Rose upon which Batson Holdings could have relied in relation to the parting with possession" to the Second Respondent. It was also submitted in that case [53] that "any attempt by … Rose to rely on his strict legal entitlements (whatever they may be) should be regarded as unconscionable conduct …". It was plain that Rose was relying on his strict legal entitlements, entitlements that arose pursuant to the lease contract and consequently under statute and as a matter of law. In my opinion the observations that I have made above only support the clear view that I have found that there was no waiver, neither is there any estoppel, that would disentitle the Respondents from relying upon the terms of the lease if so entitled. 57 The result of the above is that in my opinion there is clearly no waiver by the Applicant nor by Rose and the Respondents are clearly not estopped from reliance upon the terms of the contract. After all, these parties have spent the last four years arguing about the terms of the lease contract. The Applicant's submission as to waiver/estoppel is not dissimilar to an argument advanced by an injured person against a third party insurer to the effect that because the third party insurer engaged in settlement negotiations during which the statutory limitation period expired the third party insurer had waived its entitlement to rely upon the statutory limitation period, alternatively, that it was estopped from relying on that limitation period. I recognise that arguments by analogy are never logically valid but the similarity is clear such that the injured person should always be alive to the risk that the statutory limitation period may expire without having reached a settlement. Similarly, in this case: the parties sought to argue clauses 5.12 through to 5.20 but never argued clause 5.21. This clause was similar to a limitation period in that it gave the parties until either the next review date or the lease ending (or the other circumstances specified) and then, by contract, the parties agreed that if they had not agreed upon a valuer or asked for a valuer to be nominated then "the rent will not change on that rent review date". It cannot be asserted by the Applicant that the parties had agreed upon a valuer and neither can it be asserted that the parties had asked for a valuer to be nominated. In these circumstances and by their own contract, the parties have agreed that "the rent will not change on that rent review date", ie in this case 13 March 2002. And, importantly, it is not asserted by the Applicant, nor by any party, that any party (including Rose) made any statement in or to the effect "I am not relying on clause 5.21". Rather, in my view the parties have spent the last four years arguing about their contractual rights under the lease contract and otherwise at law and I am unable to conclude, on the material before me, that there has been any waiver or any estoppel as asserted by the Applicant. 58 Consequently, in my opinion the Respondents are entitled to rely upon clause 5.21 of the lease between Rose and the First Respondent. Consequential Orders 59 This finding does not put an end to these proceedings insofar as it is not clear from the material filed in the Tribunal upon what basis the Applicant asserts an entitlement to asserted retrospective rent and asserted unpaid outgoings. If it is conceded by the Applicant that the Respondents (or either of them) paid rent for the second option period consistent with the operation of clause 5.21 and similarly for the period 13 March 2005 - 13 May 2005 (the third option not having been exercised) then it would seem that Orders Sought 1 and 2 should not be pressed further. Similarly, Order Sought 6 . I am not sure about 3 and 4 which themselves seem to rely simply upon the terms of the lease - presumably the Applicant is asserting that the Respondents have not paid the rates, insurance and land tax as pleaded and it may well be that the determination of those paragraphs does not depend upon clause 5.21 but rather other terms of the lease contract. 60 Costs of the Respondents have been reserved. In all the circumstances it seems to me that I should re-list these proceedings for further Directions but only in relation to Orders Sought 3, 4, 5 and 7 and the Respondents' Application for costs. 61 Finally, in my opinion the Applicant is bound by its pleadings, namely his Points of Claim and Orders Sought (set out in [18] above) such that claims for damages and claims not particularised in the Orders Sought are not claims that can be the subject of argument and are not claims that the Respondents have come to the Tribunal to meet. 62 Orders: 1. Declare that the Respondents are entitled to rely upon the terms of Clause 5.21 of Registered Lease 0542508. 2. Stand the matter over for further Directions before me on Thursday 7 December 2006 at 12 noon in relation to the Orders Sought by the Applicant paragraphs 3, 4, 5 and 7 and in relation to the Respondents' Application for Costs.

Robert William Whitton Trustee of the Bankrupt Estate of John Emmanuel Rose v Batson Holdings Pty Ltd & Anor

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