The definition of "Permitted Use" is:
"Permitted Use means the right to farm the Land and carry out all ancillary activities".
62 Termination was dealt with by cl.2.4(a) in these terms:
"2.4 Termination
(a) The Licence shall terminate on the earliest of the following:
(i) the Date of Completion of the Contract;
(ii) the Date of rescission or termination of the Contract;
(iii) the Date on which the Licensor notifies the Licensee of the
termination of the Licence for a breach under this Deed of
the Contract; or
(iv) the liquidation of the Licensee.
(b) Unless paragraph 2.4(a)(i) applies, the Licensee shall give vacant possession of the Land to the Licensor on the Termination Date, however, the Licensee and its sublicensees shall be permitted to enter upon the Land for the purpose of cultivating, harvesting and removing any crops planted prior to the Termination Date by the Licensee or its sublicensees."
63 Document 31 suggests that the Licence Agreement was prepared by Allen Allen & Hemsley Canberra who were acting for Bald Hill Quarries in a proposed sharefarming and financing agreement with Rosefarms, and that they in some way wanted comfort with respect to Rosefarms' occupation of Yarrawah. Mr Clancy gave a similar explanation for the Licence. Mr Clancy explained the licence document of 1996 as arising out of a need to offer Bald Hill Quarry, which was growing crops under a share-farming or some similar arrangement with Mr Clancy on Waradgery and on Yarrawah, some greater certainty of occupation. Bald Hill Quarry was growing corn on Yarrawah. In Mr Clancy's explanation the expiry of the Option on 30 June 1996 was not related to the Licence.
64 A word-processing imprint in the Licence suggests that it was printed on 2 August 1996. Correspondence in Exhibit 12 suggests that the Licence was probably executed early in August 1996. In Mr Clancy's explanation of how he came to execute the Licence Agreement he says that he was approached by his own accountant Mr Lea who presented the problem of Bald Hill Quarries' requirement to him. In my finding no pressure of any kind was exercised on Mr Clancy in relation to entering into the Licence. He had a full opportunity to consider its terms, and obtain advice about its implications before Rosefarms executed the document. Mr Clancy said that he did not intend Rosefarms to be bound by its terms. The evidence gives no real basis why the document should not be accepted as effective to bind Rosefarms according to its terms. Among other things it would bind Rosefarms to the proposition that the Contract dated March 1995 was in force as a contract.
65 The Licence, Document 30 was executed under its common seal by Rosefarms attested by Mr Clancy as director and Mr Andrew S. Lea as secretary. Although Mr Clancy sought to disavow this document and said to the effect that he did not know its contents and did not intend that Rosefarms be bound by it, there is no basis in substance on which it could be held not to be binding on Rosefarms as its Deed. I find that the Licence was binding on the parties to it, according to its terms.
66 Curiously in view of the explanation for its existence relating to giving comfort to Bald Hill Quarries Pty Ltd the licence in cl.2.1(a)(i) appears to be limited to permission to Rosefarms to occupy the land for the permitted use. Sub-licensing was contemplated as there is a reference in cl.2.4(b) to permitting sub-licensees to enter; but this relates only to entry by sub-licensees after the termination date and for the purpose of cultivating harvesting and removing any crops planted prior to the termination date. Mr Forsyth's conduct seems to show that as before he accepted that there would be sublicensing.
67 The improvements. A large body of evidence established what improvements to Yarrawah have been carried out and illustrated their scale. There is a lack of precision in establishing the times at which works were carried out, what work in detail was done and the expense involved. In October 1992 a small area of Yarrawah had been contoured for irrigation, variously stated as 100 acres and 250 acres, but it was principally rough country appropriate for grazing with improvements suitable for that purpose. The major works carried out by Mr Clancy later were water storage facilities, construction of supply channels, drainage and recycling system, and construction or irrigation and layouts.
68 Development work began late in 1992 and early 1993 when Mr Clancy says he did irrigation work on 500 to 600 acres for cropping. In 1994 Mr Clancy built a water storage of about 48 hectares on the northern part of Yarrawah, an area known as "The Crown Lease" (although freehold). Early in 1994 the big river pump was constructed; its volume of 140 megalitres, many times the previous pumping capacity, enabled irrigation works for 2,500 acres of rice to be constructed. In and after 1996 he built a larger water storage of approximately 77 hectares in the southern part of Yarrawah. Construction of the storage works involved huge volumes of earthmoving works, which Mr Clancy was well equipped to do by experience and availability of equipment. These water storages greatly enhance the utility of other irrigation works, as they allow the accumulation of water when available by purchase or at times of high river flow, and storage until time of need when further supply may not be available. Complex arrangements exist for pumping water from the pump on the Murrumbidgee River and transporting it by a channel over several neighbouring properties. A lengthy main supply and infield channels have been constructed for reticulation from the Murrumbidgee River and thence to irrigated fields from the storages. Further drainage and recycling works have been constructed. Huge areas have been laid out for irrigation, partly by contoured ploughing and partly by laser levelling; Mr Clancy claimed that over 7000 acres of irrigated layout have been created. He estimated that the contour banks constructed were almost 200 kilometres.
69 Associated with the irrigation works are many items of hardware, including a large pump at the river and the constructions for head walls, valves, pipes, gates, road crossings and many other works. There have also been general improvements including fencing and cattle yards.
70 Mr Clancy and Rosefarms in fact continued to make improvements on a large scale after payments ceased in September 1997 and after Notice of Termination in December 1997. In my opinion there is no basis in which any remedy in respect of them could be granted. Development work continued in 1998. Mr Clancy's evidence was that he did not undertake any new projects after December 1997 but that he completed projects which had been commenced by then. These included completing the construction of the second storage, which was completed in 1998. He also completed development work for irrigated land.
71 The improvements carried out must be regarded as permanent improvements. By carrying them out Mr Clancy greatly enhanced his earnings during the years he has been in occupation. Revenue was generated from occupation of Yarrawah in several ways. Income was gained from cropping, grazing, rental and sale of water. Crops included rice, soya beans, wheat, barley, oats and hay. Cropping was undertaken in a variety of arrangements, some involving sharefarmers and not always producing revenue in money. Proceeds of cropping from Yarrawah and from other properties are not well differentiated. Stock have been run on parts of Yarrawah not used for cropping, or during intervals. There have been large earnings contemporaneous with occupation, not always in the form of money as they sometimes take the form of work performed in exchange for use of land for cropping or agistment, or other advantages, and the advantages do not always accrue on Yarrawah.
72 Mr Clancy and Rosefarms were not in a position to prove in detail the value in money or otherwise of their expenditures on Yarrawah. It was Mr Clancy's case that he simply did not have or was unable to produce detailed records or accounts which would establish what the costs had been. I found this very unsatisfactory, as maintaining records and accounts is an obligation incurred by operating in the corporate form. Expert evidence was tendered providing assessments of the volume of the work done and of its costs, but these appear to me to leave very wide margins of possible inaccuracy. Then too Mr Clancy was not in a position to give any clear evidence of the advantages which he has gained from occupation. The material put in evidence leaves me to deal only in broad terms.
73 Mr Clancy gave evidence only in the broadest detail of the costs and time which he had expended in working on Yarrawah. He said that he had worked 80 to 100 hours a week on Yarrawah; I regard this as an overstatement, particularly as he had enterprises on other properties.
74 In my finding the works carried out are improvements which have transformed the nature of Yarrawah and very greatly enhanced its value. Irrigation works require considerable maintenance. Lasered areas need to be re-lasered every four or five years, and work on clearing and maintaining channels is more or less continuous. However the works are of permanent value. The utility of the works will depend on continuing maintenance work of appropriate intensity, and also on commercial success in negotiating water supply by purchase or other arrangements with land-holders, on managing availability of water off-location and at times of high flow, and otherwise on continued and successful water management. I do not regard the evidence as enabling me to make a finding more precise than that the improvements have very greatly enhanced the value of Yarrawah, doubling and perhaps trebling its value, and that the cost of the works has probably exceeded the large advantages which have flowed to Mr Clancy and Rosefarms from occupation. If the facts had been that the Contract dated March 1995 was not legally binding but Mr Clancy wished to complete a transaction to the same effect including its provisions as to price, and Mr Forsyth or his successors had resisted, Mr Clancy and Rosefarms would have had a strong claim for remedies based on Proprietary Estoppel. However the facts are very different.
75 Mr Valuer Shuter expressed the view that Yarrawah's value was $3.4m as of 1 April 1998. I accept his valuation, which in a general way is indicative of the level of value at present. Mr Valuer Smith in what he said was an estimate only, expressed the view that the value of Yarrawah as of August 1997, valued on the assumption that the improvements effected since October 1992 had not been carried out, was $720,000. I do not regard this evidence as reliable as it was expressed to be an estimate and not a valuation and no convincing supporting detail was given with it. In any event, on the findings I have made elsewhere, the value of the property at the time and on the assumption referred to is not relevant. Mr Engineer Healey gave evidence in which he estimated the cost of the earthworks as $2,523,407. This is a crude assessment based on generalised material and assumptions, and more accurate material ought to be available from Rosefarms if its affairs were conducted with appropriate care. It is a particular difficulty that Mr Healy proceeded on market rates for contracting work, which I do not regard as an appropriate measure for the purpose in hand, in which the cost to Rosefarms is a significant element in appraising the detriment which Rosefarm would incur if it did not obtain relief. While I do not accept Mr Healy's estimate in detail, it is obvious that the earthworks were very large, continued over some years and involved costs on a massive scale.
76 Mr Halligan, a chartered accountant, made an assessment as revised that the net profit from trading on Rosefarms over the period of his occupation was $827,204. He also assessed the revenues over the period at $7,468,718.00. Mr Halligan's evidence was based on his analysis of the records which Rosefarms did maintain. However proceeding from the records to conclusions relating to the facts now relevant required him to depend on a number of arbitrary ex post facto allocations, largely made by Mr Clancy for the purposes of the analysis. Mr Halligan did not offer a conclusion about the amount of the Development Costs. His allocations left a large majority of expenditure, very large sums unallocated. The cost of development activities cannot be established to any reasonable degree of reliability. I can only take a very general view of what they were and in that general view it seems that they probably amounted to several million dollars and are unlikely to be fully represented in the value of the property. It seems likely that the development activities were largely financed from Mr Clancy's and Rosefarms contemporaneous revenue-producing activities on Yarrawah and on other properties, and from the employment of otherwise unused capacity of his earthmoving business.
77 Proprietary Estoppel. Mr Clancy in his evidence made a statement which in its terms appears to explain the nature of his attachment to the project of improving and acquiring Yarrawah (t123-124):
"Q. You said you felt under pressure to sign that document which you received in March 1995. If you did so, why did you wait until late May or early June or, on the basis of your last answer, possibly until early July to sign it and return it?
A. Because I was unsure about signing it.
Q. What was it about it you were unsure of?
A. Your, Honour could I explain something that might help understand the answers?
HIS HONOUR: I think the question allows that, yes.
WITNESS: It goes back to the definition, that's why I have a problem in answering, that goes back to the actual definition of even what 'Yarrawah' is. When you have the map you will see the physical boundaries of 'Yarrawah'. To me, that is only part of what 'Yarrawah' is, that is, the physical property.
Part of what 'Yarrawah' is the bond between Neil and myself, the friendship between Neil and myself, the drive between us to achieve is mutual benefit, which was, on the one hand, Neil getting a very advantageous price for the property, us getting the long term benefit of the property; together we got the enjoyment of creating the property.
'Yarrawah' is physically 'Yarrawah'. 'Yarrawah' was an entity. Also discussed anything we did; in my eyes to generate income, to create what Neil and I would enjoy, to fulfil the partnership that Neil and I had to build or create what was a work of art. To me it's ongoing, 'Yarrawah' still lives and grows through that. Neil still lives, our friendship is still there, Neil never died. To me Neil lives in what I created and it's very hard to take. When they talk of 'Yarrawah' they are talking of physically myself.
I am talking an entirely different subject. The whole thing of what we built and created together and I find it very hard to rationalise between the physical part of it and the entity of what we built and we were -
HIS HONOUR: I am not sure you have done yourself justice in answering the question.
WITNESS: The pressure that was there was the pressure that my side of the bargain, arrangement, partnership, whatever it was, to create all this, to fulfil my side of the partnership, it's hard to reduce that to words and say the pressure was --
HIS HONOUR: Q. I see you have explained there was a sense of commitment to a project. Do you feel you have done yourself justice in answering the question, or do you feel there is anything else that deals with the question
A. What was the question?
(Question marked * read)
A. Neil, for his side of the bargain, was to advise, treat us fairly, help, assist in any way he could, whether that fitted into - whether this agreement fitted into that category. If Neil said I could afford to do something, I would try and do that thing. If he said I could afford to make these payments, I wold attempt to make these payments."
78 This is not as a matter of language a clear explanation, but it shows that Mr Clancy felt a deep emotional involvement in Yarrawah and in his dealings and personal relationship with Mr Forsyth. At several other passages Mr Clancy also spoke about the nature of his personal relationship with Mr Forsyth in a manner which revealed considerable feeling.
79 At all times there was before Mr Clancy a document which described in clear detail the terms upon which Mr Forsyth was prepared to sell the property; several different documents from time to time, but the proposal before Mr Clancy was always clearly stated in writing. At no time was it reasonable for Mr Clancy to expect that Mr Forsyth would transfer Yarrawah to Rosefarms at any less price than the price stipulated. Different prices were stipulated from time to time. When there were movements, they were upward. The amounts and times of payments were renegotiated; but in no way was it ever held out to Mr Clancy that Rosefarms could obtain the property for a lower price than Mr Forsyth currently stipulated in writing, or that he could get benefit from his improvements except by buying the property (except, of course, for what he was earning by his operations on Yarrawah).
80 The existence of a good and personal relationship between the two men, and the many expressions of encouragement, approval and hopes of success which Mr Forsyth made do nothing to obliterate, on any reasonable view available to Mr Clancy, the understanding that the availability of the property was availability at the price stipulated. Indeed the fact that a price had been established in Mr Forsyth's proposals, and the clarity of statement and the absence of any challenge to it, must have had a great deal to do with the element of goodwill in the relationship. For each side there were advantages, and the advantages were ones which each party wished to obtain. Mr Clancy's position now appears to be to the effect that his relationship with Mr Forsyth was such that he felt that Mr Forsyth would not ultimately require him to pay more than a suitable and fair price. In my finding there was no reasonable basis for Mr Clancy to have any expectation about price other than expectations based on what Mr Forsyth expressed in writing.
81 From June 1995 until August 1997 all dealings were conducted on the basis that the price was to be $2,327,111.00. Apart from an entirely subjective interpretation put forward by Mr Clancy there is no objective indication that Mr Forsyth did anything to create an expectation of Mr Clancy that Rosefarms would get the property at any other price or at a price determined on any other basis. Other aspects of the transaction or proposed transaction were discussed or further considered or the subject of new provisions in drafts; and these aspects included the time and manner in which the purchase price was to be paid and whether there was to be mortgage finance from the vendor; but the price itself was never the subject of questioning or further discussion until the conversation of 10 August 1997, involving Mrs Forsyth and Mr De Wijn, followed by Document 58 of 12 August 1995. The challenge which was then made to the price was entirely new. The terms of the letter show that it was not the continuation of some long-running debate about the price. The position put in the letter was radically different to any position with which Mr Forsyth had ever been associated; in effect it was a proposal that he would accept far less than the $1,625,000 with which arrangements between the parties had opened almost five years earlier.
82 The expectations which Mr Clancy could reasonably hold and which could in any way be attributed to Mr Forsyth about the terms on which Rosefarms would acquire Yarrawah could not at any stage have included an expectation that the price would be a price as determined by objective valuation, as of any date, on the basis that the improvements had not been made. At no time did Mr Forsyth deal with Mr Clancy on any basis of which that was a possible interpretation. The letter of 12 August 1997 departed in a most radical way from any expectation which it could have been reasonable for Mr Clancy to hold until then. Until that date the expectations on which it was reasonable to act in carrying out improvements were expectations based on Mr Forsyth's current position as expressed in writing.
83 From October 1992 until the parties ceased to act on the basis of the Option at some time from December 1994 to June 1995, the only expectation on which it was reasonable for Mr Clancy to act was that if he exercised the Option within the time available, and incurred and met the obligations which came with exercising the option, he would have the property including the benefit of the improvements which he was carrying out; he had no reasonable basis for an expectation that he would get the benefit of the improvements in any other way. From 13 December 1994 onwards and again from June 1995 onwards, the only expectation on which it would be reasonable for Mr Clancy to act in incurring expenditure for improvements, and the only expectation which it could be said was created or contributed to by Mr Forsyth, was an expectation that Rosefarms would own the property and have the benefit of the improvements if the terms in the documents of those dates were carried out, Rosefarms met the obligations expressed in them and did so within the times referred to; all the obligations, including as to the price. This is true whether or not the Contract dated March 1995 was intended to be or was a legally binding contract; I am of the view that it was, but if it were not, it could not reasonably give rise to any expectation which differed from its terms.
84 Mr Clancy's expressions in evidence to the effect that he believed that Mr Forsyth would treat Rosefarms and Mr Clancy fairly were borne out in a way by the fact there were several re-negotiations; however this is not a basis for any expectation that there would be a departure from Mr Forsyth's stated price, which was a basic matter throughout.
85 All of Mr Forsyth's acts of acquiescence and encouragement occurred in the context of express arrangements, reliance on which is entirely sufficient to explain the conduct of Mr Clancy and Rosefarms in occupying and improving the land. For the period during which the parties acted on the Option, the rights under it were a sufficient source of remedies and protection against incurring loss by carrying out the improvements. The value of the improvements could be realised by purchasing the land in exercise of the Option and would be lost if that were not done; so much was then obvious. At later stages any expectation which it would be reasonable to rely on and could be the source of equitable remedies must have related to the Memorandum of 13 December 1994 and then from June 1995 onwards to the Contract dated March 1995. From June 1995 onwards the Contract dated March 1995 and expectations of advantages to be obtained under it were the only reasonable bases upon which Mr Clancy and Rosefarms could rely for protection in respect of improvements. The only reasonable expectations of advantage to flow from improvements which Mr Clancy could hold related to completing the Contract and taking title under it, and it must then have been obvious that if those things were not done no long-term value would be gained from the improvements. I see no room for the operation of the law relating to Proprietary Estoppel where the rights of parties are established contractually, no matter what acquiescence or encouragement there was. If the Contract dated March 1995 were not binding its operation for the purpose of the law of Proprietary Estoppel could only be to create expectations according to its terms, including to the term relating to price, a subject of central importance and explicit statement on which Mr Forsyth did not after June 1995 show any flexibility, and was not asked to.
86 There could not in my opinion be any continuing expectation, on a reasonable basis, that Mr Clancy and Rosefarms would obtain title to Yarrawah and the benefit of the improvements after the series of events of August and September 1997 in which Mr Clancy stated that he was quite unwilling to pay $2,327,111 but that he was willing to pay $1,200,000, his solicitors denied that there was a binding arrangement, Mr Forsyth died and the personal friendship between Mr Forsyth and Mr Clancy ended and Rosefarms ceased to make payments after September. At no stage since then and throughout the hearing have Mr Clancy and Rosefarms adopted the position that they were willing to pay $2,327,111; the case put forward was to an entirely different effect, that the amount which should be paid was a value to be determined by the Court supported by evidence which suggested that that value was even far less than $1,200,000.
87 In these circumstances it is in my judgment in no way unconscionable for Salienta and Mr Forsyth's successors to rely on Salienta's legal title to the land, its legal right of possession and on the termination of the Contract dated March 1995. I see no room for Proprietary Estoppel when all relevant conduct happened in the context of legally binding contracts under which Mr Clancy and his nominee had rights to take title if they complied with the obligations. If these were not binding they have much the same effect to define what expectations it would be reasonable to hold and act on about the interest which would be conferred and the circumstances in which it would be conferred.
88 As of August 1997 Mr Forsyth, who had been known to be seriously ill for some years, was known to be gravely ill; this was referred to in the correspondence of 1997 and was well known to Mr Clancy. In the context of the parties' earlier dealings and Mr Forsyth's circumstances, the letter of 12 August 1997 appears retrospectively to be an astonishing departure from any expectation which might reasonably have been held by Mr Forsyth about the future of his transactions with Mr Clancy. At about this time Mr Clancy, being as he says unhappy with the proposed arrangements, came to "…the opinion that we could not proceed under those lines and if I could have one final attempt at getting back to square one." In my finding, in August 1997 and before Mr Forsyth's death Mr Clancy and Rosefarms became entirely unwilling to purchase the property on the terms which Mr Forsyth had kept before them in various forms since June 1995, and that, whatever else its terms may show, the letter of 12 August 1997 is an expression of this entire unwillingness. Until then discussions had proceeded for years on the basis that the price was agreed.
89 Mr Clancy also said of the schedule of payments in the Memorandum of 13 December 1994 "I assumed the payments would be credited against any ultimate price." There is no reasonable basis for that assumption; there was no reason why Mr Clancy should not pay contemporaneously for the advantages of occupation as distinct from the price.
90 For the first time too the letter of 12 August 1997 expressed an alleged understanding by Mr Clancy that Rosefarms was to be credited with the value of the improvements on the property. This too was an entirely radical change in the proposed arrangements. It is altogether inconsistent with each of the Memorandum and the Contract, which are the parties' expressions and purport to be expressions of agreement, and with the various forms of draft contract.
91 Mr Clancy expressed in evidence in various ways a complaint to the effect that he was not given any credit or allowance in the price for the improvements which Rosefarms effected on Yarrawah. This was a characteristic of each proposal which is recorded in any way, from October 1992 until the end of Mr Forsyth's life. At each stage Mr Clancy and Rosefarms had the benefit of possession of Yarrawah, the opportunity to carry out improvements on Yarrawah the opportunity to work the property and get the concurrent benefits of the improvements, and generally to get the benefits of occupation before having to pay the purchase price. In the first form of the arrangement, in October 1992 there was actually an obligation to make improvements at least at a stated rate. At later stages when the Option was no longer treated by the parties as governing their affairs, improvements continued to be made, on a large scale. The flow of advantages was not solely favourable to Mr Forsyth; the price was deferred and Mr Clancy and Rosefarms had the opportunity to work the property with the benefit of the improvements, and to allow others to work the property in return for advantages of various kinds, without any payment in the nature of a deposit. It was obvious from the outset that unless Mr Clancy and Rosefarms in some way completed a purchase the long-term advantage of the improvements would be lost and the only advantages gained would be gained while actually in occupation. This was obvious whether or not the various documents were intended to be binding; the risk that there would be no long-term benefits from improvements if there were no transfer of title was obvious at all times.
92 The reasoning underlying the price of $2,327,111.00 in the Contract dated March 1995 was explained by Mr Forsyth in a letter of 7 August 1995, Document 20, and in the terms of that explanation there was no place for a credit or allowance in the price for the improvements. Mr Clancy showed this letter to his solicitors. However until August 1997 there was no challenge to the reasoning or debate about the principles or the amount in any written form, or as far as evidence shows, in any other way. It does not appear to me that the reasoning expressed by Mr Forsyth in that letter relies on Rosefarms paying for the improvements which it effected. However even if that were a true view of the reasoning underlying the price, from June 1995 onwards the price had been established in the parties' negotiations, and until August 1997 it was never challenged or raised for re-negotiation. Quite otherwise, it was a constant in the communications between the parties, and was the basis on which Mr Clancy sought to obtain mortgage finance from a third party. Correspondence between solicitors about the drafts does not include debate about this figure. Nor does it appear that it was debated or discussed or challenged at the conference attended by Mr Clancy and his accountant, and by solicitors for both parties, on 24 November 1995. Mr Clancy's dealings over many months with solicitors representing a proposed intended first mortgagee proceeded on the basis that $2,337,111 was to be the purchase price.
93 The central reasoning supporting the price was that the contract price was structured in a way which effectively deferred Mr Forsyth's benefit and gave Rosefarms the benefit of a low occupancy fee until Rosefarms purchased Yarrawah, with a countervailing increase over what would have been the value of Yarrawah in a present sale for ready money. It would be difficult to justify any of the prices referred to in the documents in terms of the value of Yarrawah in its limited state of improvement in October 1992; for $2,327,111 this justification would be quite impossible. The justification of the price is not that it is objectively a fair value on any set of assumptions, but that it is the price that Mr Forsyth stipulated and in the knowledge of which Mr Clancy acted and to all outward appearance and in fact agreed to. The price is one element in a congeries of advantages and disadvantages which the contract brought with it, and the clear fact that it is higher than market value at the outset has to be taken with the advantages of there being no deposit, deferral of payment, occupation for relatively small current payments, the income that could be earnt, the Headingly loan, the prospects of future ownership and Mr Clancy's perception of the suitability of the property for what he planned to do. It is for the parties and not for the Court to say whether $2,327,111 as an element in all this is the appropriate price: they have said in effect that it was. Mr Clancy's viewpoint on the fairness of the price now after he has had the advantages and occupation and the elapse of time is not the same as the viewpoint he had in 1995.
94 Unconscionable Contract. It was contended that the Contract of March 1995 if in effect should be set aside as an unconscionable contract. The case in support of this was to the effect that Mr Clancy had been overborne by Mr Forsyth. Mr Forsyth no doubt had considerable advantages in subjects related to his talents as Queen's Counsel. It is a completely wrong view of the relationship between the two men and of Mr Clancy's abilities to think that Mr Clancy was or could be in any way overborne in entering into the transactions or continuing from 1992 to 1997 to carry on his activities of improvements. In his own field of rural business Mr Clancy is a talented and successful person. He has no ability for paper work but in his evidence before me he showed that he has a good and clear command of spoken language, and a ready grasp of commercial considerations. He had professional advice available to him independently of Mr Forsyth, and he consulted his professional advisers as he wished; his solicitors and his accountant, who were entirely independent of Mr Forsyth. When the events opened Mr Clancy had an accountant in Hay who attended to his accounts, and was mainly oriented to keeping records. Mr Clancy consulted Mr Lea a chartered accountant and had his advice from March 1995 onwards. From April 1994 he consulted Messrs Greaves Wannan & Williams solicitors. He had ready access to his solicitors and was in a position to refer documents to them for consideration and advice and did so when he thought he should. It is clear that Mr Clancy did not place himself in Mr Forsyth's hands.
95 Mr Clancy contended that he felt pressured into signing the document of 13 December 1994, which he referred to as guidelines and as an agreement in principle. The pressure which he felt was "the pressure not to fail in Neil's eyes" and he felt that by not signing the agreement that would have constituted a failure - "… if he thought I could accomplish something, which he obviously must have done to come up with these things then, yes, it would have been a failure not to sign it and a failure not to be able to do it."
96 Mr Clancy said in evidence that he had been prepared to commit himself to a binding arrangement to purchase the property being "a binding arrangement that was suitable and fair." He accepted that he did sign Document 16 which expressly conferred a power of rescission if he did not pay the Headingly loan by 30 June 1997. He said "I felt under a fair bit of pressure to sign the document". In my view however he was not in fact under any influence of Mr Forsyth which could reasonably be thought of as pressure.
97 Mr Forsyth's legal skills gave him considerable advantages in some respects over Mr Clancy. His legal skills were not well deployed in his dealings with Mr Clancy. Mr Clancy for his part had abilities in rural life and the world of practicalities which gave him some advantages over Mr Forsyth. Mr Clancy is a person of considerable talent and ability and adept at business. For some years he has conducted an earthmoving business and all affairs related to operations on Yarrawah, and also related operations on several other properties, complex affairs involving dealings amounting to millions of dollars. This has involved him in detailed and elaborate transactions with neighbouring owners over occupation, sharefarming and water rights. In some ways he had advantages over Mr Forsyth in understanding rural life, capacity to carry out engineering works, knowledge of the personalities and talents involved and presence at or near the site, whereas the main scene of Mr Forsyth's activities was in Melbourne and from 1994 onwards he was suffering from terminal illness. I do not accept that the terms of the agreement were unconscionable or unfair in any way. The price agreed upon was high but it was reached in the course of several negotiations and re-negotiations in which Mr Clancy was in a position to weigh the relevant considerations and the advantages and decide whether they should be set off against the price. The advantages were considerable as they brought him the opportunity over some years and for small payments to occupy the property, improve it according to his own requirements and work it, earning revenue in millions while making payments which were to a marked degree concessional, and deferring any large payments on account of the price. I do not accept that the contract was unconscionable or that it ought to be set aside. Suggestions that in some way Mr Forsyth overbore Mr Clancy into entering into the Contract dated March 1995 are in my view groundless.
98 Sharefarming. Paragraph 13 of Rosefarms' Amended Defence relies on the Agricultural Tenancies Act 1990 and is in these terms:
"13. In further answer to the whole of the Statement of Claim so far as it concerns Rosefarms, Rosefarms says that if the Notice dated 23 December 1997 would otherwise have been valid and legally effective:
(a) as at that date, 'Yarrawah' was being used for the purpose of growing three crops (in rotation) on a share-farming basis;
(b) as at that date, the second of those crops was to be harvested in 1998 and the third was to be harvested in 1999;
(c) the Notice did not provide for notice of at least a period ending at least one month after the end of the current annual cropping program;
(d) by sub-section 19(4) and 27(1) of the Agricultural Tenancies Act 1990, the Notice was invalid and of no legal effect."
99 Section 19 of the Agricultural Tenancies 1990 is in these terms:
19.(1) A tenancy for a fixed term with no provision for holding over terminates at the end of the fixed term without the necessity for any notice.
(2) A periodic tenancy (other than a tenancy from year to year) cannot be terminated unless written notice of termination is served by a party on the other party so as to give notice at least equivalent to the length of the term.
(3) A tenancy from year to year cannot be terminated unless written notice of termination is served by a party on the other party so as to give not less than 6 months' notice.
(4) In addition to the requirements of subsections (2) and (3), a tenancy cannot be terminated unless written notice of termination is served by a party on the other party so as to give notice of at least:
(a) in the case of a sharefarming arrangement for crop growing -
a period of 1 month, ending at least 1 month after the end of
the current annual cropping program; and
(b) in any other case - a period of 1 month.
(5) This section does not apply to termination for a breach of the tenancy or where the parties have otherwise agreed on the notice to be given."
100 Provision for termination in cl.2.4 of the Licence did not provide for termination by notice of any period.
101 "Tenancy" is defined in s.4 in these terms:
"'tenancy' means a lease or licence, an agreement for a lease or licence, a tenancy at will or a sharefarming arrangement or any other arrangement by which a person who is not the owner of the farm has a right to occupy or use it;"
102 Section 27 avoids provisions for contracting out of the operation of the Act.
103 Defendants' counsel contended that the defendants' licence to occupy arose out of the series of events beginning in October 1992 in which the defendants in fact occupied Yarrawah and carried on development and farming activities and paid outgoings, supported by the invitations, representations and encouragement of the owner. It was further contended that this licence was a sharefarming arrangement because, it was said, a sharefarming arrangement is one pursuant to which sharefarming takes place. The sharefarming to which counsel referred was not any sharefarming as between Salienta and Mr Forsyth and the defendants. Counsel relied on the fact that to the knowledge of Mr Forsyth the defendants sharefarmed with other persons. These arrangements are described by Mr Clancy in his affidavit of 8 October 1998 para.62, to the effect that Rosefarms then had a sharefarming arrangement with the Violi Brothers relating to part of Yarrawah; the Violi Brothers hired machinery to Rosefarms which was used primarily for undertaking development on Yarrawah and in return they were permitted to grow crops on the land at their own expense and for their own benefit, under a cycle of planting and cropping three different products which was to run until the last harvest about May 1999. In Mr Clancy's affidavit of 31 March 1999 para.5(b) he narrated that he had told Mr Forsyth in 1993 about an arrangement with Sally and Kyle Smith to jointly grow rice for the 1993, 1994 season under the name Riverina Rice Company. The Smiths operated as Third Sargasso Pty Ltd. A letter from Mr Forsyth to Mr Clancy of 15 July 1996, Document 28 also shows that Mr Forsyth was aware and agreed that Rosefarms would allow others to farm on Yarrawah.
104 In my opinion the contemplation, acceptance and permission of Salienta and Mr Forsyth that Rosefarms would allow others to farm on Yarrawah and would do so under various arrangements for sharing expenses and proceeds does not characterise the Licence granted by Salienta to Rosefarms as a sharefarming arrangement within the meaning of para.19(4)(a). Salienta was not involved in any arrangement for sharing in any sense, either expense or proceeds, and no money amounts payable to Salienta were related to the outcome of farming. In the ordinary and natural meaning of words referring to sharefarming, a sharefarming arrangement is an arrangement between those who participate in the sharefarming; an arrangement under which land is made available to a person who then participates in sharefarming with someone else is not a sharefarming arrangement.
105 Although para.13 of the Defence does not in terms allege that there was a sharefarming arrangement the allegations which are made (in subpara (a) "On a sharefarming basis" and subpara.(c) "At least one month after the end of the current annual cropping program") show that it is alleged that there was a sharefarming arrangement and show that the provision relied on is para.19(4)(a). Evidence shows clearly that an annual cropping program was current on 23 December 1997 when the first notice of termination was given.
106 The operation of para.19(4)(a) to extend a tenancy until after the end of a current annual cropping program applies only in relation to a sharefarming arrangement, which is one of several kinds of arrangements and agreements which fall within the definition of "tenancy". "Sharefarming" and "Sharefarming arrangement" are not defined expressions and it appears from the terms of the definition of 'tenancy', and also from the general meaning of those words that an arrangement is not a sharefarming arrangement simply because a person who is not the owner of a farm has a right to occupy or use it.
107 The Agricultural Tenancies Act 1990 does not alter the nature of the rights conferred by arrangements between the parties; s.19 alters the time and manner of termination of the tenancy, but does not alter the nature of the rights which exist pending termination. A lease remains a lease and a contractual licence remains a contractual licence, and a contractual licence does not confer a right of exclusive possession, a defence to a claim for possession or any right to possession except by reference to any claim the licensee may make for an injunction to restrain breach of the contractual licence. The defendants contend that the Licence did not have effect, so it is inconsistent with their position that they should ever be entitled to enforce it specifically by injunction. If some arrangement between the parties did have effect to confer a licence to which subs.19(4) applied the extension to one month after the end of the annual cropping program current in December 1997 has long since expired. It probably expired before the Summons was issued on 10 June 1998. It clearly expired before the Amended Statement of Claim of 26 October 1998 in which Salienta first claimed possession of Yarrawah, and certainly expired before their claim was made again in the Further Amended Statement of Claim dated 7 June 1999. By making those claims Salienta clearly terminated any then existing and unterminated licence. In my opinion the question whether subs.19(4) ever had any operation is now academic.
108 Salienta's counsel contended that observations in the judgment of the Full Court of the Supreme Court in Dudgeon v Chie 55 SR (NSW) 450 set out in the report of the decision of the High Court (1955) 92 CLR 342 at 347 and approved at 352, which dealt with entitlements as regulated by the Agricultural Holdings Act 1941, are applicable to tenancies as affected by s.19 of the Agricultural Tenancies Act 1990, particularly the observation "The Agricultural Holdings Act 1941 was not designed to affect the status of a share-farmer, as such, or to confer upon him an estate in possession as against the owner, unless such a right could be spelled out of the agreement itself." In my opinion s.19 where applicable to a tenancy as defined has the same effect as the legislation considered in Dudgeon v. Chie: the term of the deemed tenancy is affected by limiting the manner of its termination, but the nature of the rights conferred by the parties' agreement is not affected. If the deemed tenancy does not according to its terms confer an exclusive right of possession or any right which will protect the tenant from ejectment, s.19 has no impact on the deemed tenant's protection from ejectment. The basis of this view is that neither in s.19 nor elsewhere in the Agricultural Tenancies Act 1990 is there any provision protecting a deemed tenant's occupation in any way other than by providing for periods of notice as stated by s.19.
109 In my opinion the Agricultural Tenancies Act 1990 does not afford any protection to the defendants' occupation. The provisions of s.19 of the Agricultural Tenancies Act 1990 relating to notice of termination do not apply having regard to provisions of subs.(5). If that were not so the notice given was for longer than one month and complied with para 19(4)(b). The pleaded defence relates only to subpara 19(4)(a) and has not been made out.
110 Termination of the Licence. Notice of Termination of Contract dated 23 December 1997 directed by Salienta and Mr Forsyth's executors to Mr Clancy and Rosefarms stated that it terminated the Contract dated March 1995, and the grounds recited were defaults in payments of principal and interest under the Contract and the denial of the letter of 25 August 1997 Document 60 that the Contract was binding on Mr Clancy. In my finding these grounds were well based, there were further grounds and circumstances from which repudiation of the Contract by Mr Clancy was clear, it was open to Salienta and the executors to accept that repudiation and terminate the Contract, and that notice was effective. The Licence was terminated on 23 December 1997 having regard to sub-paragraphs 2.4(a)(ii) and (iii) of the Licence. I find that the Contract dated March 1995 was repudiated by Mr Clancy and Rosefarms in August and September 1997 and that the Notice of Termination operated to accept the repudiation and terminate the Contract.
111 The Notice of Termination conferred permission on Mr Clancy, Rosefarms and any sub-licensees to enter upon the land until 30 June 1998 for the purpose of the rights specified in cl.2.4(b). Subject to this permission the Notice of Termination was effective to bring the licence to an end.
112 In my opinion Salienta is entitled to recover damages for mesne profits against Mr Clancy and Rosefarms in respect of the period commencing 26 October 1998, when the claim for possession was first made in the Statement of Claim.
113 The claim against Mr Clancy personally for damages under the Contract dated March 1995 was not pressed (t229). The improvements effected by the defendants even after 23 December 1997 will make proof of actual loss and the assessment of quantum quite difficult.
114 ORDERS