Supreme Court of WA|2001-01-25|Before: Anderson J

Webster & Anor v Banning Holdings Pty Ltd & Ors [2001] WASC 11 (25 January 2001)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : WEBSTER & ANOR -v- BANNING HOLDINGS PTY LTD & ORS [2001] WASC 11

Landlord and tenant - Lease of roadhouse - Default by lessees - Non-payment of rent - Service of notice by local authority that premises unfit for habitation - Termination of lease - Eviction - Whether wrongful

Police - Abuse of office - Policeman attending at time of eviction of tenant

Australian Consolidated Press Ltd v Uren [1966] HCA 37; (1968) 117 CLR 185

Capelinha v M & D Marchesi Holdings Pty Ltd (1995) 13 SR(WA) 261

Laurinda Pty Ltd v Capalba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623

Racz v Home Office [1994] 2 WLR 23

Sanders v Snell (1997) 143 ALR 426

1 ANDERSON J: This is an action by Mr and Mrs Webster against their former landlord, Banning Holdings Pty Ltd, and a police sergeant. The action arises out of the eviction of the Websters from the tenancy of the Yellowdine Roadhouse at Yellowdine on the Great Eastern Highway, some 32 kilometres east of Southern Cross, on 21 December 1988. The eviction is alleged to have been wrongful and substantial damages are claimed against Banning Holdings on that account and also for conversion or wrongful detention of a substantial quantity of plant, equipment and moveables. The Websters claim to have been dispossessed of these chattels at the time of the eviction.

2 The claim against the police officer, Sergeant Lampard, is based upon the tort of misfeasance in office. Broadly speaking, it is contended that Sergeant Lampard abused his office by actively assisting Banning Holdings to evict the Websters.

3 The lease was executed on 15 May 1986 and was for a period of three years commencing on 1 June 1986 with two successive options of renewal each of three years. The land and premises the subject of the demise was lot 22 Great Eastern Highway, Yellowdine, being the whole of the land comprised in certificate of title volume 1179, folio 221.

4 It is not in dispute that the premises were in a run-down condition at the commencement of the lease. Although it was described as a roadhouse, motel and caravan park, it really operated as a fuel stop. There was, in fact, no accommodation and the catering facilities were rudimentary.

5 The rental fixed by the lease was $500 per calendar month and in addition the lessees were obliged to pay a levy of six cents per litre of fuel supplied to the roadhouse by the nominated supplier, which was the Caltex distributor in Merredin, M J & T D Pustkuchen Pty Ltd, the proprietor of which was Mr Michael Pustkuchen. Under the lease the lessees covenanted "at the Lessees own expense throughout the said term ... at all times to keep and maintain in good and tenantable repair the leased premises ... ".

6 The proprietor of Banning Holdings was Mr Martin Banning and he and Mr Webster had met in early 1986 when Mr Webster advertised an early model car for sale which Mr Banning was interested in buying. The Websters had been involved in other roadhouses. In the discussions between Mr Webster and Mr Banning about the car, Mr Webster mentioned his experience with roadhouses and one or other of them mentioned the availability of the Yellowdine Roadhouse which was then for sale. An arrangement was made for Mr Webster to go to Yellowdine to inspect and to report on the condition of the roadhouse to see whether he would be prepared to take a lease of it if Mr Banning bought it. Mr Webster did travel to the roadhouse and he did make an inspection of it and, based on his report and willingness to take a lease, Mr Banning entered into successful negotiations to buy it.

7 He purchased the land and improvements and an agreement was made with the outgoing proprietor that certain plant, machinery and other implements of the business would be purchased by the Websters for the price of $25,000. Banning Holdings advanced the purchase price of $25,000 and the Websters granted a bill of sale to Banning Holdings over all of the chattels to secure repayment of the advance.

8 The tenancy got off to a bad start. In order to purchase the roadhouse, Mr Banning borrowed money from the National Australia Bank. He had an arrangement with the bank that repayments would be made from rentals received from the Websters. Pursuant to that arrangement, he directed the Websters to make payments of rental into a nominated account in his name at the St George's Terrace branch of the National Bank. The first rental payment was due on 1 June 1986 and thereafter on the first day of each succeeding month during the term of the lease. The rent due on 1 June was not paid and neither was the rent due on 1 July. Mr Banning made verbal demands of Mr Webster. Mr Webster's excuse was that he and Mrs Webster had engaged in heavy expenditure in upgrading the roadhouse. In a letter to Mr Banning, which is exhibit 27, dated 14 July the Websters said the following:

"Dear Martin

The writer and his wife are currently refurbishing and upgrading Yellowdine motel, it is anticipated by the end of this year the asking price for Yellowdine will be in the vicinity of $260,000, at the current rate of progress. If motel units are installed there is a demand for the accomadation and caravan park fircilities available the for sale value will be in the region of $400,000 plus stock.

To establish motel fercilities of good quality and carictor $25,000 is needed. The writer and his wife will try and meet this demand before the end of this year.

All of the above have been explained to you by myself on several occasions. Rental payments of $500 per month will be forwarded to you August 1st as we have already spent $8,700 on upgrading the fercilities, currently there is seating arrangments for 32 people, and as been completely decorated inside. Structural clading is currently being fitted on the outsides. Yellowdine will be the best Roadhouse, Motel on this highway when completed.

Cockalbiddy on the Eayre Highway are asking $750,000 plus stock, if wanted to buy now. Kumarina as you well know are asking $600,000 plus stock. All of the above and more have been managed by the writer and his wife.

I hope we can work together on these ventures like the abovementioned for a few many years to come, with honesty and understanding from both parties concerned.

Kind regards

A R & R Webster"

9 On that same date and crossing in the mail was a letter written by Mr Banning to the Websters in which Mr Banning said:

"You know what banks are and I must receive the rent on the 1st of each month. It is to be forwarded to 'the National Bank' 50 St Georges Terrace Perth, account no 95 667-9097. Please instruct your bank accordingly."

10 Recognising that his letter of demand crossed the Websters' letter to him, Mr Banning wrote to the Websters the next day saying:

"Our letters must have crossed in the mail, I admire what your doing, and when and if the site is sold you will reap benefits. You must remember that I have covered all costs including plant and equipment and made arrangements with the bank that on the 1st of every month starting 1st June 1986, $3,000 be deposited, to date not one cent has been forthcoming. The $3,000 is made up $500 from yourselves for rent $2,500 from Merredin for rebates. We can't even get rebates because your cheques have bounced. At the moment we are some $6,000 in arrears and the situation must be rectified immediately. We discussed all the details at length with you in the beginning, now we must adhere to those arrangements."

11 The reference to the "rebates" was a reference to the levy of six cents per litre which should have been paid for fuel sold to the roadhouse by Mr Pustkuchen's Caltex depot in Merredin. An arrangement had been made that the levy (or the "royalty" as it was called in the lease) would be rebated to Banning Holdings by Mr Pustkuchen on receipt of payment from the Websters. The evidence was that Mr Pustkuchen required the Websters' cheques to be cleared before he would rebate the royalties to Banning Holdings. The rebates were well in arrears either because Mr Pustkuchen was not receiving payment from the Websters or the Websters cheques were dishonoured.

12 I have set out this correspondence because it is relevant to a contention which was put forward by the Websters which I reject, namely, that at the time of entry into the lease an agreement was reached between the Websters and Banning Holdings that Banning Holdings would underwrite the cost of improving and refurbishing the roadhouse.

13 This arrangement finds expression in the statement of claim in the following paragraphs:

"7. The Plaintiffs entered into possession of the premises pursuant to the above arrangement and improved and added to the premises by bringing the existing building up to restaurant standard including the addition of all plumbing and electrical fittings and building a workshop area. Further, pursuant to the above arrangement, the Plaintiffs became the proprietors of and operated the business from and at the premises.

8. Such improvements and additions were carried out at a cost to the Plaintiffs of $30,000 or thereabouts in the period up to November 1988.

9. The First Defendant through Banning agreed that the cost of the improvements would be reimbursed to the Plaintiffs. The First Defendant has not reimbursed or rewarded the Plaintiffs."

14 This is, of course, a bad plea. On the face of it, there is no consideration for the promise alleged to have been made by Banning Holdings "that the cost of the improvements would be reimbursed to the Plaintiffs". For all that appears from the pleading, the promise was a gratuitous promise made after the lease had been entered into and unsupported by any consideration. It does not therefore disclose any cause of action: Bullen and Leake and Jacobs: Precedents of Pleadings, 12th ed, 345.

15 When this point was made to counsel for the plaintiffs, there was an application on the second day of the trial to amend the pleadings to attempt to plead a collateral contract. I disallowed the proposed amendment. As a plea of collateral contract, it was seriously deficient. I ruled that, anyway, it was simply too late to plead a distinct, new agreement for the first time. It seemed to me that quite apart from the ordinary problems of prejudice, even if the plaintiffs succeeded in getting the pleading into proper form, the cause of action on the collateral agreement would be barred by lapse of time.

16 Notwithstanding that the application for the amendment was disallowed, the issue as to whether or not there was in fact an arrangement between the parties to the effect that Banning Holdings would reimburse the costs of all the improvements which the Websters elected to carry out was fully ventilated as part of the contest between the parties on other matters. I accept Mr Banning's evidence that there was no such arrangement. The correspondence set out above, especially the Websters letter of 14 July 1986 (and, in particular the second paragraph) is quite inconsistent with any such arrangement. There is no evidence of the kind of dealings that one would expect if such an arrangement had been made. There are no records of any attempt by the Websters to obtain the prior approval of Banning Holdings for the works which they claimed to have undertaken or of the cost of doing the work. In fact, a good deal of such of the capital improvements as were carried out were carried out on adjoining land which was Crown land not the subject of the lease. Mr Banning is a businessman and it is altogether unlikely that he would have agreed to pay for improvements on land in which he had no interest.

17 I find that Mr Banning's letter to the Websters of 15 July 1986 reflected the true position; namely, that the Websters were obliged to comply with their basal obligations under the lease, including the payment of rent and keeping and maintaining the premises in good and tenantable repair, and it was up to them to what extent they spent their own money further improving the premises.

18 The Websters were in fact most unsatisfactory tenants. They were always behind with the rent and other outgoings. Municipal rates were never paid on time. Some rent was paid in the form of payments direct to Banning Holdings by customers of the roadhouse. See, for example, exhibit 29 which evidences a payment of $600 by "Charlie's Transport" and exhibit 30 which evidences payment of $1,450 by "Clifton Transport". The Websters were very poor business managers. Their rental defaults were part of a larger problem of general mismanagement. For example, they were constantly being dunned by their creditors. There is evidence that between early 1987 and December 1988 many people instituted legal proceedings against them. The Southern Cross bailiff's register was tendered in evidence (exhibit 108) and the following is a list extracted from the register of process of one kind or another served at the roadhouse on the dates indicated.

19 Some of these debts were accumulated over a long period. For example, the entry relating to the Water Authority on 20 December 1988 was in respect to a summons for amounts due for water consumption and water rates going back to February 1987 (exhibit 57). Most of the creditors were suppliers of goods and services to the roadhouse whose accounts had not been paid, or who had been paid with bad cheques. Many of the actions were for the amounts of dishonoured cheques written by the Websters. Peters WA Ltd, Dinnie Rundle Pty Ltd and Atco Industries are examples of trade creditors suing the Websters on cheques which had been dishonoured. In June 1987, the plaintiffs granted a bill of sale to the ANZ Bank to secure repayment of borrowings of $20,000. The assets over which the bill of sale was granted were the goodwill of the business plus:

"All that the stock in trade furniture fittings fixtures plant machinery engines electric and other motors tools appliances equipment motor and other vehicles goods chattels and effects of every description presently situate on or about the said premises and belonging to the mortgagor AND ALSO ALL AND SINGULAR the stock-in-trade furniture fittings fixtures plant machinery engines electric and other motors tools appliances equipment motor and other vehicles goods chattels and effects of every description which shall at any time or times hereafter during the continuance of this security be acquired by or belong to the Mortgagor and be or be brought or placed upon the said premises ... "

20 It may be observed that this bill of sale appears to mortgage the very same chattels which had been mortgaged to Banning Holdings under the bill of sale to secure repayment of the $25,000 advanced by Banning Holdings to enable the Websters to acquire the chattels and implements of the business at the time of the commencement of the lease.

21 In December 1987, the Websters were in arrears with respect to their fuel bills due to the fuel distributor, Pustkuchen, to the extent of some $55,000 and in order to keep supplies coming from him, the plaintiffs granted a bill of sale by way of security in the sum of $65,000 over the book debts and four transportable accommodation units and a transportable ablution block which the Websters had constructed on Crown land adjacent to the demised premises. Mr Pustkuchen gave evidence that the amount due to him was never paid and some time in 1988 he stopped dealing with the Websters altogether for a time. The Websters then dealt with Southern Cross Traders. That relationship ended with that fuel supplier suing them, as can be seen from the bailiff's register. The evidence is not very clear, but it would appear that Mr Pustkuchen resumed trading with the Websters later in 1988, strictly on a cash basis. I find that the Websters never fully complied with their fuel royalty obligations under the lease. Royalty payments to Banning Holdings ceased altogether when Mr Pustkuchen first stopped supplying the roadhouse and never resumed thereafter, not even when Mr Pustkuchen resumed supplies on a cash basis.

22 It is not in dispute that the plaintiffs paid no rent after February 1988. In their statement of claim, they plead that this was by an agreement for set-off. The agreement is said to have arisen out of an abortive attempt by the Websters to purchase the leased premises from Banning Holdings in October 1987.

23 Much time was taken up at trial on this question whether the Websters were entitled to set off their rental obligations against a deposit which they claimed to have paid to Banning Holdings for the purchase of the business and which they claimed had become refundable. It was a major part of the Websters' case that because they had paid that deposit and it had become refundable when the sale went off, they were not in default of their rental obligations at the time they were evicted. This aspect of the case must, therefore, be gone into in some detail.

24 The parties did indeed sign an offer and acceptance in October 1987, whereby the Websters offered to purchase the demised premises and also lot 24, on the other side of the highway, for the price of $250,000 on a deposit of $100,000. (Banning Holdings had earlier acquired lot 24 with a view to establishing a liquor outlet there.) The offer and acceptance, which is dated 23 October 1987 and is exhibit 6, acknowledged receipt by Banning Holdings of the deposit of $100,000, but it is common ground that this deposit was not, in fact, paid. Mr Banning's evidence was that the offer and acceptance, in which there was an acknowledge of receipt of the deposit, was signed by him on Mr Webster's assurance that he and his wife had the $100,000 and were in a position immediately to pay it. After the contract was signed, however, Mr Webster said he would need some time to get the deposit together. This is confirmed by exhibit 46, which is an undated note signed by Mr Webster in the following terms:

"In regards to our offer to purchase the freehold of lots 22 and 24 Great Eastern Highway Yellowdine plus Brimart International Corporation Pty Ltd for $250,000 we will pay the deposit of $100,000 in cash once various accounts owing to us are collected."

25 The plaintiffs' case is that they were able to accumulate $30,000 in trading receipts and, according to Mr Webster, this amount of cash was placed in a briefcase and delivered to Mr Banning. They claim he agreed to accept it in full satisfaction of the deposit.

26 It is the plaintiffs' case that the contract then failed because they were unable to raise finance. It is also their case that because the contract was subject to finance, Banning Holdings became obliged to refund the deposit; that is, the $30,000. The set-off is pleaded in the following terms:

(c) Such contract did not proceed for the reason that finance was not approved.

(d) The First Defendant neglected or refused to refund such deposit of $30,000 upon the contract not proceeding.

12. Upon the neglect or refusal of the First Defendant to refund such deposit it was agreed between the Plaintiffs and the First Defendant that the said sum of $30,000 would be a credit in respect of rent and royalty accruing as above referred to.

13. By reason of the credits due to the Plaintiffs by the First Defendant the Plaintiffs did not make any rent or royalty payments save as below set out subsequent to the month of February 1988.

14. The Plaintiffs obtained judgment against one M J Whiteman in the Local Court at Coolgardie in the month of May 1988 in the amount of $6,400 or thereabouts which sum was being paid on terms at the rate of $300 per month to the First Defendant on account of sums, if any, due by the Plaintiffs to the First Defendant."

27 This is a strange pleading. Paragraph 12 appears internally inconsistent in that it alleges both a "neglect or refusal" to refund the deposit and an agreement that the deposit would be refunded by a set-off against rent.

28 Mr Banning emphatically denied any such agreement for set-off and at trial there was no attempt on the part of the plaintiffs actually to prove a set-off agreement. Their case in the end was not that there was an agreement for set-off, but that because Banning Holdings refused to repay the deposit, they were entitled in law to withhold payment of rent pro tanto.

29 A complete answer to this would be they were not entitled to claim a set-off in satisfaction of their rental obligations. Pursuant to cl 1.01 of the lease, their obligation was to make the payment of rentals and royalties, "on the days and in the manner hereinbefore appointed for payment thereof without any deduction or abatement whatsoever ... ".

30 I say "would be" because I am not satisfied the Websters did actually pay the $30,000. Mr Banning denied that the payment was made. The plaintiffs were not able to produce any documentary evidence whatever in support of their claim that they did make the payment. They were not able to give even the approximate date on which the payment was made. There are no banking records showing a withdrawal of this amount of cash or, for that matter, any amount of cash from any account operated by the Websters. There is no account or record showing that the amount was in fact accumulated from receipts and there is no documentary evidence such as takings records or debtors' ledgers to show that such an amount could have been accumulated from receipts.

31 I found the Websters' evidence concerning the collection and actual payment of the $30,000 to Mr Banning to be most unsatisfactory. It was Mr Webster's evidence that, notwithstanding agreement had been reached upon $100,000 deposit and that he had signed a note (exhibit 46) to the effect that he would pay the $100,000 from trading receipts, Mr Banning invited him to pay only $30,000 (t/s 176). That, in itself, seems very unlikely in all the circumstances. There is no explanation for why Mr Banning might do so. Mr Webster gave evidence that he responded by telling Mr Banning, "Give me a month, 6 weeks, I will be able to do something" (t/s 177). That seems an unlikely response from a buyer who had just been told that he need only pay a third of an agreed deposit. Mr Webster said that he made an arrangement with his fuel supplier, Mr Pustkuchen, "that he would have to delay cheques off me for the fuel that he delivered as I wanted to come up with the deposit to get Mr Banning out of the way as he was just coming on a bit too strong at that time". He said that by not paying Pustkuchen's bills, he was able to accumulate $30,000 in cash in "about 6 weeks". That being the only way he was able to raise $30,000, it is a mystery how he was going to be able to pay the agreed deposit of $100,000. As to the payment of the cash to Banning Holdings, Mr Webster was asked the leading question: "Did you count it before you left Yellowdine?" He obediently responded, "Yes, I did." His evidence was that his wife was present when he counted it, that it was all $50 notes (t/s 178) and that he put it in a briefcase and brought it to Perth. Mrs Webster's evidence on the subject of the collection and placing of the money in the briefcase was rather different in point of detail and was also most unconvincing. She said they kept "most of our money" in an unlocked writing bureau in the manager's quarters. She said that one day, "Tony went back down to the roadhouse and got some more money from one of the tills and brought it back up and we counted the money, bundled it up ... " (t/s 453). She said it was made up into piles of $1,000 of "50s and 20s and 10s". This is, of course, different from Mr Webster's evidence that it was "all 50s". To this stage of the evidence, there was no suggestion that any other person was involved in putting together or counting of the money. However, when Mrs Webster was asked to continue with her story, she gave the following rather strange answer (t/s 455):

"Well, they decided to count the money on the bed and then I went back down to - sorry, Tony went back down and got some more money from the roadhouse and when he came back they were still counting and there was $30,000 there, Mr Duckham."

33 Mrs Webster then said that "we" put the money into a briefcase and "he" locked it. She then added:

"About 6.30 - no; later on that evening, I can't give a time, we recounted it and it was still there."

34 She could not remember exactly who was present on this second occasion nor could she give any sensible reason for why the briefcase was unlocked and the money counted again.

35 Mrs Webster was generally an unreliable witness. I do not take the time to go right through all her evidence to point out the many instances where she gave evidence that was inherently not credible. Some examples will suffice. After entering into occupation of the demised premises, the Websters purchased some transportable accommodation units and it is common ground that these units were placed on lot 25, which was Crown land. It must have been patently obvious to Mrs Webster that they were not on the roadhouse lot. However, Mrs Webster adamantly maintained in her evidence that the accommodation units were on the roadhouse lot.

36 Mrs Webster said she was unaware that she and her husband were being sued by suppliers. She must have been acutely aware of it. Many summonses, judgment summonses, and warrants of execution were served at the roadhouse when she was present. Yet, Mrs Webster denied that she ever discussed with Mr Webster that creditors were pursuing them. Her evidence was to the effect that there never was an opportunity to discuss such matters. She said that because of the hours that she worked at the roadhouse "we never had time together" (t/s 490). That is not credible. This was a small, remote roadhouse and they lived there together.

37 It appears from the bailiff's register that the bailiff, who was Sergeant Lampard or his delegate, visited the roadhouse to serve process upon the Websters on at least 35 occasions during the 30 months or so that the Websters were in occupation. Mrs Webster's evidence was that she remembered "the police coming a few times", but said that she had no understanding of the reason for their visit and never discussed it with her husband. This is impossible to believe.

38 Concerning their offer to purchase the roadhouse and the agreed deposit, Mrs Webster insisted that Mr Banning had given them "a false receipt for $100,000". Pressed, she said, "I saw a receipt for $100,000". In answer to a question from me as to where she saw it, her answer was "Mr Webster had it, your Honour". She said it "was placed into the bureau" at the roadhouse. This evidence could not be correct. In his evidence which I am about to recount Mr Webster said that he had not been given a receipt for $100,000. It need hardly be said that no such receipt was discovered.

39 Many other examples of serious difficulties with Mrs Webster's evidence may be given. Suffice it to say I found it impossible to rely on her evidence. I do not accept her evidence about the collecting and counting of the $30,000.

40 Mr Webster gave evidence that on arrival in Perth with the briefcase full of money, he stayed with a Mrs Shirley Pritchard, who he described as "a friend of the family". In response to the leading question, "Did you show her the money?" he said, "Yes, I did." His evidence was that Mrs Pritchard took the briefcase into her bedroom, presumably to secure it overnight. The following morning he telephoned Mr Banning to tell him "I had the money" and he arrived at Mr Banning's office "about 10, 11.30 or something". He said that Mr Banning had made an arrangement to introduce him to a finance broker, a Mr Verheyden. He was then asked by his counsel, "Did you show the money to Mr Verheyden?" to which he responded, obediently, "Yes, I did." His evidence was that after the meeting with Verheyden, he and Mr Banning returned to Mr Banning's office. He then gave the following evidence:

"Did you keep it [the briefcase] in your possession after you left Mr Verheyden?---I certainly did.

What happened then?---I took it to Banning's office.

What happened then?---He counted it along with me in his office.

Was anyone else there?---I believe his secretary was there but I'm not quite sure.

What happened then?---He took delivery of the money.

Did he keep your bag or did you keep it ?---I beg your pardon?

Did he keep your bag or - did you keep it, your briefcase, or did he keep it?---No, no, no. He took the money out of the briefcase.

It was counted there?---Yes.

What amount did you arrive at jointly?---30,000.

Why did you leave it with him?---He requested a deposit. He asked for 30 grand.

You're quite sure it was a deposit for a transaction?---Yes. He wouldn't have got it otherwise.

Subject to that offer and acceptance?---Yes.

Did you have any contact with Verheyden thereafter?---I rang him a couple of times.

What happened?---He said he was still waiting for Mr Banning for a deposit, acknowledgment of the deposit.

Pardon?---The acknowledgment of the receipt for the money and the accountancy figures."

41 All of Mr Webster's evidence on this subject was given in response to this kind of heavy prompting and it was given in a most unconvincing manner. I gained the distinct impression that he was not recounting events which he actually recalled. But, anyway, it is a curious and implausible story. If the agreement for a deposit of $100,000 was genuine (and it should be emphasised Mr Webster never suggested that it was not), it is highly unlikely, as I have already observed, that Mr Banning would simply have invited him, gratuitously, to pay only $30,000. Accepting that the offer and acceptance was genuine, I find this evidence incredible. There was no attempt to explain why Mr Banning should be so generous and I can think of none. The Websters' relations with Mr Banning were not particularly good at this time. Mr Banning had been pressing them hard for payment of arrears of rental and royalties and this was one of the reasons Mr Webster gave for trying to buy the roadhouse from Banning Holdings. His evidence was that he did not trust Mr Banning. The Websters' case was that, by this time, Banning Holdings actually owed the Websters at least $30,000 on account of the improvements they had made to the roadhouse which Mr Banning was refusing to pay. It is altogether unlikely in this atmosphere of disputation that Mr Banning would have gratuitously reduced the deposit from $100,000 to $30,000 or that Mr Webster would have handed over $30,000 in cash to Mr Banning without insisting on obtaining some form of receipt or acknowledgment of payment.

42 At one stage, Mr Webster tried to say that he did get a receipt, but his evidence was confused, to say the least. In the end, I was quite unsure what his evidence really was on the subject of a receipt. No document was put into evidence. At first, Mr Webster suggested that the matter of acknowledgment of payment of the $30,000 deposit was a matter which he left to the finance broker, Mr Verheyden (t/s 181). On further prompting (t/s 185), he said he got a "letter" from Mr Banning "to say I would be credited with that" (presumably the $30,000). Prompted further, he insisted "there was a written acknowledgment" and later "he definitely acknowledged the $30,000. That's why he kept the money".

43 Asked about the whereabouts of the letter of acknowledgment, his evidence was "it went missing".

44 Under cross-examination, in a rather confusing set of answers, Mr Webster initially said that Mr Banning had actually issued a receipt, not for $30,000, but for $100,000 and then admitted that he did not get a receipt for $100,000. The following is taken from page 307 of the transcript, which is an excerpt from Mr Webster's cross-examination by Mr O'Toole:

"You say he made a receipt out?---Yes.

Have you got the receipt?---He gave me a receipt for the 100 grand.

Where is the receipt, Mr Webster?---I think Mr Duckham may have a copy."

Mr Duckham informed the Court that he could not produce it.

"I just haven't followed something. I'm sorry. It's my fault. I should be following it more closely. Do you say you got a receipt for $100,000?---It certainly looked like $100,000, your Honour, on close examination, but that's the only receipt of Mr Banning other than the fact it was listed here [in the offer and acceptance] as 100 and I was amazed he put $100,000 down when only 30,000 was given.

I'm still not understanding. Is your evidence that you got a receipt for $100,000? That's all I want to know?---No, your Honour, I did not get a receipt for $100,000."

46 There was then a wholly unsuccessful attempt by Mr Webster and by his counsel on his behalf to resolve the intractable contradictions in Mr Webster's evidence by suggesting that all along Mr Webster had been referring only to the acknowledgment of receipt of deposit in the offer and acceptance. A glance at the transcript is enough to reveal that this is patently not so (t/s 179 - 181, 307 - 309).

47 This dissembling left me with the distinct impression that Mr Webster was making his evidence up as he went along. If a payment of $30,000 in cash had been made by him to Mr Banning as he claimed, he would have had a simple story to tell as to whether he had received a receipt for it or not and, if not, why not. Mr Webster could not explain why the plaintiffs had never listed a receipt amongst their discovery documents. Nor did he try to explain why he should have been given a receipt for $100,000 when he says he paid only $30,000. I would again emphasise that there was no suggestion that the offer and acceptance was a sham or that it did not set out the true agreement between the parties.

48 There are other reasons why I cannot accept that the payment was made. There is no credible evidence that prior to their eviction from the premises the Websters ever made a written demand for repayment of the $30,000, notwithstanding that Mr Banning was writing to them pressing them hard to bring their rental and royalty arrears up-to-date. No such demand was discovered or produced. At this time, Mr Banning was also pressing them for payment of the $25,000 which he had advanced to enable them to purchase chattels from the previous proprietor. There is no evidence in the documents that the Websters ever responded to these demands by claiming a set-off against $30,000 allegedly paid to Mr Banning. There is no reference to the $30,000 in the letters written by Mr Banning to the Websters outlining the state of accounts between them. On 5 January 1988, Banning Holdings Pty Ltd wrote to the Websters in the following terms (exhibit 39):

"We are not prepared to continue on any further under the present conditions and we hereby formally advise you that your failure to pay the following amount of money within 7 days will result in a District Court writ be issued immediately.

The rent was kept at $500 pcm on the strict basis that you would finalise all the work off at the Roadhouse and at Lot 24 an inspection will be carried out shortly to establish whether or not that work has in fact been done.

12 months at $500 per calendar month $ 6,000

5 months fuel rebates $12,500

10 days wasted on appointments never

kept or intended to be kept and phone

calls associated thereto $ 5,000

$23,500

This amount will increase by $3,000 per calendar month. You also agreed to pay for the plant and equipment at the end of the first 12 month period - $25,000. No more promises are acceptable whilst we are always approachable and you may telephone at any time, we are now only interested in hard cash. Mr O'Brien and Mr Brown have advised that they are no longer interested in purchasing the business and property. Before we assign any lease you must pay us all that is owing plus interest.

We have just found out that the business is under bill of sale to the ANZ Bank for $20,000, the units are under bill of sale to Caltex Merredin for $45,000 and you owe us approximately $40,000 plus what you owe everyone else, if you are earning so much money why don't you pay your debts?

Your threats have been noted concerning damaging the building and business and we advise that if any of these threats are carried out including damage or disposal of plant and equipment owned by this Company, legal action will be instituted immediately and the matter handed to the authorities.

Mr Denis Meagher has now been instructed on the matter and you are required to confirm [sic conform] to our demands within 7 days."

49 It is altogether unlikely that Mr Banning would have thought that he could get away with a letter in those terms if he was in fact holding $30,000 paid to him in cash by Mr Webster. And if such a payment had been made, Mr Webster would have immediately responded in writing and in the strongest terms referring to that payment, and requiring it to be brought to account. Less than three months later Banning Holdings wrote another very strong letter to the Websters complaining about many breaches of the lease agreement, including non-payment of rent and royalties. Again, there is no evidence that they responded to the effect that Mr Banning was holding $30,000 belonging to them.

50 Matters came to something of a head in May 1988. Mr Banning personally prepared a writ and managed to get it issued out of the District Court in which Banning Holdings Pty Ltd was plaintiff and the Websters were defendants, and in which there was an indorsement of claim in the following terms:

"Under the lease dated 1 June 1986 the defendants owe the plaintiff $50,000 for rent, royalties and interest up until May 1988 this claim will increase at 3,000 per month until paid."

51 Mr Banning visited Yellowdine for the very first time in May 1988 in order to serve this writ and he also took with him an accountant by the name of Campbell-Smith in the hope that he might persuade the Websters to accept Mr Campbell-Smith as an adviser to assist them to get their affairs in order. Mr Banning, Mr Campbell-Smith and Mr Webster met at the roadhouse. Mr Campbell-Smith gave evidence about this meeting. He gave his evidence in a forthright manner and there is no reason not to accept it as true. He gave evidence that in his presence the parties discussed the state of the roadhouse business and the amount owing by the Websters to Mr Banning and discussed what the Websters proposed to do about it. His evidence was that the Websters claimed to have spent all their money "developing the motel" and "had none left to pay arrears of rent". A tentative arrangement was made for Mr Webster to consult with him "to discuss what could be done about his financial situation" and meanwhile the Websters would pay $1,000 per month to Mr Banning. Asked in examination-in-chief whether anything was said about money owing by Mr Banning to the Websters his evidence was, "Nothing was said in that regard as far as I can recall". In cross-examination he repeated that evidence. He said, "I can't recall that Mr Webster said that Banning owed him anything". I am satisfied that Mr Webster did not do so and I am satisfied that he would have done so if he really had made the alleged payment. Mrs Webster did not participate in the discussion.

52 My finding is that Mr Webster's claim to have made a payment of $30,000 to Mr Banning in cash by way of a deposit in respect to the purchase of the demised premises must be rejected.

53 There is one other matter that ought to be mentioned with respect to this aspect of the Websters' claim. It is a matter which really only goes to the Websters' credibility, but it is a serious matter and should be mentioned. On 22 February 1990, Mr and Mrs Webster signed a notice under s 364 of the Companies (Western Australia) Code addressed to Banning Holdings Pty Ltd demanding payment of $100,000 "being moneys due by the company to the said Anthony Reginald Webster and Roslyn Webster in respect to the proposed sale of the Yellowdine Roadhouse". The basis of the statutory demand was the acknowledgment of receipt of the payment of a deposit of $100,000 in the offer and acceptance. Both Mr and Mrs Webster knew that they had not paid a deposit of $100,000. Yet, although they knew the statutory demand would be a false demand, they were prepared to go to the lengths of having it professionally prepared and served. This conduct shows them to be people who are quite capable of solemnly making false claims with respect to money.

54 I should mention also that evidence was led from Mr Verheyden and Mrs Pritchard to corroborate the evidence Mr Webster gave to the effect that he had put together $30,000 in cash and brought it to Perth in a briefcase. Their evidence was to the effect that they saw a large amount of cash in a briefcase which he was carrying. I should say why I do not accept this as proof of payment of $30,000 to Mr Banning.

55 Mrs Pritchard's evidence on this subject was to the effect that on one occasion Mr Webster arrived to stay with her carrying a briefcase which he opened and which she saw contained what she thought was a large quantity of money. She looked after the briefcase until the next morning when Mr Webster went off with it. Even if I was to accept this evidence, it does not establish that any money was actually delivered to Mr Banning on that occasion. However, I do not believe Mrs Pritchard saw anything like $30,000 in Mr Webster's briefcase.

56 Mrs Pritchard appears to have been a close family friend or, at any rate, a close friend of Mr Webster. She was giving evidence of events which had happened 12 years previously, yet she purported to have a very clear and detailed recollection of matters which assisted the plaintiffs' case. For example, (on another subject altogether) she gave emphatic evidence that on 21 December 1988 Mr Webster arrived at her home at Cannington at 5.10 pm with very few possessions. The purpose of this evidence was to support Mr Webster's evidence that he had been thrown out of the roadhouse that morning, with no opportunity to gather his personal property. However, Mrs Pritchard's adamant testimony that Mr Webster arrived at her Cannington home at 5.10 pm that day cannot be correct. Mr Webster could not have got to Cannington so soon. There was abundant evidence that after having received notice of eviction at about 11.30 am, Mr Webster spent some time collecting possessions and taking them to a caravan. There is clear evidence from several witnesses that he left the roadhouse for a time and then returned at least once in a four-wheel drive vehicle towing a large trailer and spent more time loading chattels and items of furniture into this vehicle and onto the trailer. I accept the evidence of Mr Banning and the evidence of the witness Brewer (who was there to do a stocktake) and of the witness Ries (who was there to take over the running of the premises) that Mr Webster did not finally leave the premises until about 4 pm, perhaps later than that, towing the fully-loaded trailer. The journey to Perth from Yellowdine is of about 400 kilometres by the shortest route. On Mr Webster's own evidence, he drove via Wongan Hills, and there is evidence that this adds another 170 kilometres to the journey.

57 Whilst I do not think that Mrs Pritchard would intentionally give untrue evidence, I am afraid that she could not be relied on to give an accurate narrative of events happening so long ago. It may well be that Mrs Pritchard was shown cash in a briefcase by Mr Webster. She probably was. There is evidence which I will refer to in a moment, which I accept, that on the day that Mr Banning and Mr Webster visited the finance broker, Mr Verheyden, Mr Webster did have a briefcase with him and it did contain cash. However, for reasons which I will explain, I find that the quantity of cash in the briefcase was nothing like $30,000 and whatever Mr Webster did with it, he did not give it to Mr Banning.

58 Mr Verheyden gave evidence that when Mr Banning and Mr Webster came to his office to discuss the proposal he was to put together to obtain finance for the Websters, Mr Webster opened a briefcase and he saw that it contained a large quantity of money. Once again, even if I were to accept this evidence, it would not establish that Mr Webster later handed any money to Mr Banning.

59 I do not accept that Mr Verheyden saw anything like $30,000 in cash in Mr Webster's briefcase. There were quite serious difficulties with Mr Verheyden's evidence generally. He said that after he had seen the money in Mr Webster's briefcase and had agreed to present a proposal for bank finance on behalf of Mr Webster, Mr Banning and Mr Webster left his office and later he received a receipt from Mr Banning for $100,000, which he said he attached to the finance application documents which were forwarded to the bank. As has already been observed, there is no credible evidence that Mr Banning or Banning Holdings ever made out a receipt for $100,000. No documents were proffered in support of Mr Verheyden's evidence.

60 Mr Banning's evidence was more credible and fitted in with other evidence. He said that on the day the contract was to be signed, Mrs Webster came into his office alone and signed the offer and acceptance for her part. She told Mr Banning that Mr Webster would come in later after he had picked up another car, which he intended to drive back to Yellowdine. When Mr Banning asked Mrs Webster about payment of the deposit stipulated in the offer and acceptance (that is, $100,000), she told him to speak to her husband about it. A short time later, Mr Webster rang from the home of a friend who Mr Banning recalled was a Mr Hodge, to say that he did not have a car yet and that he would like Mr Banning to bring the offer and acceptance to Mr Hodge's home for signature and then take him to the finance broker to enable him to instruct the finance broker as to the preparation of an application for finance. Mr Banning asked about the deposit. Mr Webster told him he did not have the deposit, but that he would be able to pay it "out of debts owing to me". Mr Banning gave evidence that on being told this he had exhibit 46 (set out above) typed up before he left his office, made it an annexure to the offer and acceptance, and took the documents to Mr Webster who signed them. It was too late to get Mrs Webster's signature to exhibit 46 as she had left Mr Banning's office before it was typed. He then gave Mr Webster a lift to Mr Verheyden's office. Mr Banning's evidence was that Mr Webster had a briefcase with him and did open it in Mr Verheyden's office. Mr Banning gave evidence that it contained documents and that Mr Webster took writing material from the briefcase on which he made some notes of the information which Mr Verheyden required in order to complete the finance application. Mr Banning's evidence was that there was some money in the briefcase, but it seemed to him to be only a few hundred dollars. Mr Banning than drove Mr Webster back to Mr Hodge's home, which he remembered as being in Como or South Perth. He received no payment from Mr Webster then or later on account of the deposit. He did not give Mr Webster or Mr Verheyden a receipt for $100,000, then or later.

61 This evidence is supported by the few objective facts that are available against which to test the evidence of these witnesses. It is a complete and logical explanation for the existence of exhibit 46 and for why that document was not signed by Mrs Webster. Mr Banning's evidence is also consistent with the absence of any receipt for $100,000 and with the absence of any record with respect to the alleged payment to him of $30,000.

62 I now turn to the plaintiffs' case for wrongful termination.

63 As has already been noted, there is no dispute that the plaintiffs had paid no rent since February 1988. There is ample evidence that Banning Holdings was continually demanding that the plaintiffs comply with their rental obligation. I find that as at 21 December 1988, the plaintiffs had been in occupation of the roadhouse for 30 months in respect to which they should have paid a total of $15,000 in rent. On the evidence as a whole, I find that they had paid not more than $3,950 as to which I shall go into a little more detail when dealing with the counterclaim.

"If the said rental hereby reserved ... or any part thereof shall at any time be in arrear or unpaid for 7 days after the same shall have become due ... then it shall be lawful for the Lessor at any time thereafter to re-enter upon the leased premises and the term hereby created shall thereupon determine ... "

65 If the lease remained on foot as at 21 December 1988, it was lawfully determined on that date by re-entry for non-payment of rent.

66 In truth, the lease had already determined. By cl 2.05 of the lease it is provided that:

"Should any competent authority declare the leased premises as being unfit for occupation ... then the tenancy hereby created shall be determined as from the date such declaration or order shall take effect ... "

67 There is a long history of disputation between the local authority, which was the Yilgarn Shire, and the Websters concerning the condition of the premises and the carrying out of works for which no permission had been given. It is not necessary to go too far into this history. It is sufficient to say that for some time prior to November 1988 the health and building surveyor employed by the Shire, Mr G B Houston, had been trying to get what he regarded as very serious violations of the various codes, building by-laws and health regulations remedied. No permission had been obtained to install the transportable accommodation units on the adjoining site. The effluent disposal system did not comply with the health regulations. (I find that effluent was being drained by open drains into an open pit on an adjoining vacant lot.) There were inadequate toilet facilities for the motel area and the septic system was quite inadequate. It was Mr Houston's opinion that food preparation areas were not in compliance with the food hygiene regulations and that the buildings were generally substandard. He gave evidence that he made several inspections and found the premises to be very unhygienic. He described the kitchen areas as dilapidated. He found the kitchen to be filthy and the storeroom adjacent to the kitchen to be also filthy. There was animal (dog) faeces in the storeroom and rodent faeces in the cupboards. The premises were not vermin-proof or fly-proof. I accept Mr Houston's evidence. Eventually, on 18 November 1988, he prepared and sent to Banning Holdings a notice under the Health Act described as an "Unfit for Human Habitation Order". That notice was in the following terms:

"TAKE NOTICE that under and by virtue of the powers conferred by the Health Act 1911 (as amended), the Yilgarn Shire Council, being the duly constituted Health Authority, in and for the District of Yilgarn in which Lots 22 and 25 Great Eastern Highway Yellowdine (known as the Yellowdine Roadhouse) is situated, has under the provision of section 135 of the Health Act, 1911 (as amended) declared the structure erected on the aforementioned lots to be UNFIT FOR HUMAN HABITATION.

Therefore, no person shall inhabit or occupy or suffer another to inhabit or occupy; nor offer for sale any type of food substance from the said structure or any part thereof as from two weeks of the date of service of this Notice or the 2nd December, 1988, whichever is sooner.

PLEASE NOTE that failure to comply with this notice will render you liable to penalty of $1,000 and a minimum daily penalty of $50."

68 This notice was sent together with a letter of the same date specifying works required to be completed within the 14 days. There were nine items on the schedule as follows:

"1. All plumbing to be upgraded to comply with Plumbing Codes.

2. Septic tanks to be installed to Health Surveyors requirements.

3. Effluent disposal system to be installed as per the Regulations.

4. All substandard buildings to be demolished, or brought into compliance with the Uniform Building Bylaws.

5. All food preparation areas to be brought into compliance with the Food Hygiene Regulations.

6. Male and Female toilets to be provided to motel area, in compliance with regulations.

7. Laundry facilities to be upgraded to cater for motel site.

8. Caravan facility to be removed or upgraded to comply with Caravan Park and Camping Regulations.

9. Plans and specifications for the total development and additions or alterations to same to be submitted to this Council before work can commence."

69 It is not in dispute that a copy of the "Unfit for Habitation Order" was fixed to the front door of the roadhouse.

70 Mr Houston's evidence was that in discussions with Mr Webster the Websters were given time to "trade out" of their stock over the Christmas period before the roadhouse was actually closed down. Mr Houston's evidence was that in follow-up inspection in mid to late December, little or none of the work had been done. I find that the roadhouse would have been closed down immediately after the Christmas/New Year period if Mr Banning had not stepped in.

71 In fact, the roadhouse was never actually closed down. The Shire agreed to give Banning Holdings time to carry out the remedial work. After the eviction of the Websters on 21 December, Mr Brewer, who has trade qualifications, attended at the premises and worked full-time for quite some time, carrying out remedial works and it would appear that the roadhouse was allowed to continue to operate under new management until this work was finished.

72 The question which arises is whether the declaration by the Shire that the leased premises were unfit for occupation determined the tenancy pursuant to cl 2.05 on a date prior to 21 December 1988. If so, there is no basis on which the plaintiffs can claim they were wrongfully evicted on 21 December. This question, in turn, depends upon what is meant by the phrase "as from the date such declaration or order shall take effect" in cl 2.05 of the lease. The plaintiffs' contention is that the order never took effect because the premises were never actually closed down. In my opinion, that is not how the phrase is to be understood. It could not have been intended by the parties at the time of execution of the lease that the lease would not determine unless and until governmental authorities actually closed the operation down or demolished the buildings. That would give the landlord no opportunity whatever to re-enter and carry out remedial works in accordance with the notice. In my opinion, the reference to the date on which the declaration or order "shall take effect" is a reference to the date on which the declaration or notice becomes effective as a coercive instrument under s 135 of the Health Act, that is, the date of service of the notice declaring the leased premises to be unfit for occupation or the date of service of the order requiring the premises to be demolished.

73 Mr Houston's evidence is that the notice was served by sending it by registered post to Banning Holdings and affixing it to the premises on 18 November 1988. In my opinion, the lease determined on that date and the plaintiffs' claim based upon wrongful termination of the lease must fail.

74 I turn now to the claim for detinue and conversion.

75 This claim is for return of chattels or their value and damages for conversion. The chattels are particularised in par 21 of the statement of claim and as so particularised they comprised furniture, appliances, electrical equipment and one or two personal items such as a camera, a set of encyclopaedias, some videotapes and the like. When the plaintiffs delivered particulars of the value of these chattels, in December 1993, some four or five years after the action had been commenced, they added other chattels comprising personal items of special value, such as jewellery, watches and the like. Thus, some four or five years after the action had commenced, the plaintiffs, for the first time, made a claim to the effect that Banning Holdings had taken possession of and converted to its own use, items such as, for example, Mrs Webster's mother's gold wedding band, which she valued at $875 and Mr Webster's ruby gold ring, valued at $600 and so on.

76 I should say at once that I do not believe that the Websters left any such items behind at the roadhouse. I accept the evidence of Mr Banning, Mr Brewer and Mr Ries that Mr Webster spent a number of hours on 21 December storing things in a caravan and loading moveables into a vehicle and trailer. Although Mr Webster was very upset at being evicted, he is not the kind of person who would have left the roadhouse without making sure that he had recovered all his moveable property of any value at all. There is abundant evidence that he was given as much latitude as he required to recover his personal chattels. The police left long before Mr Webster left and no-one stopped him from taking anything. There is evidence that Mrs Webster returned to the roadhouse some few days later to collect her pet dogs which apparently were being looked after by a friend of the Websters who occupied the caravan into which articles had been put by Mr Webster. Mrs Webster attended with one of her sons and both admitted that neither of them made any request of anyone that they be permitted to retrieve any personal items from the roadhouse premises or the accommodation units. Mrs Webster was unable to give any satisfactory explanation for why she did not do so, if, as she testified, many valuable personal items still remained in the premises. I find that she did not do so because nothing had been left behind of any value. Mr Webster would not have been content to leave any moveables behind of any value. If anything had been left behind inadvertently, he would have gone back for it and there is no suggestion that he would have been prevented from doing so.

77 I think it likely that some chattels of little or no worth were left behind. The evidence as to what they were, what happened to them and what their value was is quite unsatisfactory. The claim in detinue and conversion with respect to the chattels particularised in par 21 of the statement of claim and in par 4 and par 5 of the particulars of plaintiffs' loss filed 15 December 1993 as amended fails.

78 There is, in the particulars of plaintiffs' loss, a claim for the loss of a "cash float" amounting to $700.

79 There is evidence that Mr Webster took cash from the cash drawer of the till on 21 December 1988. There is no acceptable evidence that any cash was left behind. The claim for the cash float fails.

80 Tacked on to the particulars of plaintiffs' loss of 15 December 1993 is the following particular:

"8. The six motel units and two toilet blocks referred to in par 10 of the statement of claim (as valued by Mr G MacEwan) $25,000."

"Further and pursuant to such arrangement the Plaintiffs installed six motel accommodation units and two toilet blocks on the premises at a cost of $90,000 the same being retained by the Plaintiffs as their property."

82 These are the transportable units to which reference has already been made. It is, I think, hardly in dispute that these units were not situated on the premises. It cannot therefore be the case that in re-entering on 21 December 1988 Banning Holdings took possession of this property. So far as appears from the evidence, these transportable units remained on Crown land adjacent to the premises. There is no evidence as to what became of them. Mr Banning denied that Banning Holdings took possession of them in any formal sense or sold them. There is no evidence that they were ever sold or moved or that the Websters were ever denied access to them or prevented from taking them away. There is some evidence that the transportable units, or some of them, were put to use by the people who took over the management of the roadhouse and that some electrical repairs were done to one of them. Exactly what use was made of which units is unclear. There is no claim of trespass to goods or anything of that kind in relation to these units. There is evidence that Mr Banning took an assignment of the bill of sale over the units which had been granted to Mr Pustkuchen. Mr Duckham sought to contend that Banning Holdings were therefore obliged, as mortgagee in possession, to account to the Websters with respect to the units. But there is no plea of any material fact, such as that Banning Holdings entered into possession of the units as mortgagee, which would entitle the Websters to a mortgagees' account. The only basis that is pleaded in support of the claim with respect to the accommodation units is the re-entry under the lease. As has been said, these units were not part of the demised premises.

83 It was a feature of the case that the Websters produced no records whatever either in the form of vouchers and receipts, cheque butts or bank statements, or in the form of books of account or statements of account touching their business affairs, so as to prove such things as the cost of equipment, the payment of rent and so on.

84 Mr Webster gave evidence that the reason for the absence of basic documentation was that on two occasions police executed search warrants at the roadhouse and on both occasions took away a large quantity of material, including all of his primary accounting records. I do not believe him. To the extent that this evidence was corroborated by his son and his wife, I do not believe them either. Having heard the evidence of the police officers who executed these warrants, I am satisfied that they took very few documents and no accounting records at all relating to the ordinary business of the roadhouse.

85 I infer that such records as may have come into existence in respect to the management and running of the roadhouse have always been in the possession, power and control of Mr and Mrs Webster and have not been discovered or produced in these proceedings because they reveal nothing which would assist the Websters in their claims.

86 I now turn to the first defendant's counterclaim. It is for arrears of rent and royalties, arrears of rates, Water Authority rates and charges and rectification of electrical works.

87 Dealing first with rent, the first defendant allowed the arrangements with regard to rent to become informal, to say the least. As has been mentioned already, the first defendant accepted some set-offs in satisfaction of the plaintiffs' rental obligations and the evidence as to exactly how much was involved in this and the details of the transactions concerned are very unclear. In exhibit 31, a letter written by the first defendant to the plaintiffs on 14 November 1986, there is an acknowledgment of a payment of $2,000 in rent against arrears of $3,000. How and in what manner this was paid does not appear. It is, however, a clear admission that the first defendant had received to that date that sum by way of rent. Earlier, on 29 August 1986, the first defendant wrote to the plaintiffs as follows:

"On 1 September 1986 $500 is due for the month plus $50 owing on the balance of Clifton Transport.

Clifton paid $1,450 which covered June, July and August, with $50 outstanding.

Yours sincerely."

88 The details of this transaction were never clearly explained, but I gather that Clifton Transport was somehow indebted to the plaintiffs and the plaintiffs instructed that firm to pay to the first defendant the amount owed to the plaintiffs and in this way discharged the plaintiffs' rental obligations to the extent of $1,450. Whether this payment is included in the $2,000 referred to in exhibit 31, I do not really know. As the onus is upon the first defendant, I will infer that the $1,450 is in addition to the $2,000.

89 There is evidence that the Websters instituted legal proceedings against a debtor by the name of Whiteman and obtained an order for payment by instalments and made arrangements for payments received into court to be forwarded to Banning Holdings in discharge of the Websters' rental obligations to Banning Holdings. According to exhibit 56, a letter from the Clerk of Courts, Coolgardie, a total of $500 was paid to Banning Holdings on this account.

90 Mrs Webster gave evidence that she made some payments of $500 in cash to Mr Banning by way of rent. There are no records to support this claim. She produced no receipts and her evidence was denied by Mr Banning. Nevertheless, there is the enigmatic acknowledgment by Mr Banning in his letter, exhibit 31, of the receipt of $2,000 which he really was not able to explain in his evidence and it may be that part or all of this was cash paid by Mrs Webster.

91 In short, the evidence concerning the actual amount paid by way of rent is most unsatisfactory and surprisingly so, if I may say so. Any landlord seeking to recover arrears of rental from a tenant ought to be in a position to prove his claim to the hilt by reference to appropriate records.

92 I will base my judgment with respect to arrears of rent upon the admission by the plaintiffs that they paid no rent after February 1988. They remained in the premises for at least another nine full months, for which their rental obligation at the rate of $500 per month was $4,500. There was a payment of $500 received in the form of remissions from the Coolgardie Local Court on account of Whiteman and, after bringing that to account, I find that the plaintiffs are indebted to the first defendant in the sum of at least $4,000 for rental.

93 I am satisfied that Banning Holdings paid the Shire of Yilgarn rates amounting to $319.77 and the Water Authority rates and charges amounting to $5,903.88. These were amounts which the Websters were obliged to pay under the lease and Banning Holdings is entitled to judgment for those sums, either as money paid to the use of the Websters or as damages for breach of the lease.

94 The first defendant also claims $8,678 for rectification of electrical works. I am not satisfied that all of this work was to remedy breaches of the lease. The electrician, Mr Blacklock, gave evidence some of the work done by him was to rectify faulty electrical work in the accommodation units which were not part of the leased premises. I am not able to make any finding as to what proportion of his charges related to breaches of the lease.

95 I would therefore allow the counterclaim in the following amounts: Rent, $4,000; Shire rates, $319.77; Water Authority charges, $5,903.88.

96 The first defendant is entitled to interest on these sums pursuant to cl 2.11 of the lease at the rate of one and one-quarter per cent per month from the date or dates upon which the sums became due. No-one has attempted to make a calculation of interest and the evidence as to when the first defendant paid the Shire of Yilgarn rates and the Water Authority charges is unclear. I am not therefore able to quantify the claim for interest. If no agreement can be reached between the parties as to the quantum of interest, I will receive further submissions.

97 At a late stage of the trial, I allowed the first defendant to amend its counterclaim to include a claim for royalties. This amendment arose out of the evidence of Mr Pustkuchen that after ceasing to supply fuel to the roadhouse for some time, he resumed supplies and continued supplies on a cash payment basis until the Websters were evicted, or until shortly before their eviction in December 1988. That being so, Banning Holdings now claims to be entitled to six cents per litre of fuel delivered to the roadhouse by Mr Pustkuchen's firm in this period.

98 Whilst I accept that fuel deliveries were made to the roadhouse, I am unable on the evidence to find how much was delivered. Mr Pustkuchen's rather vague estimate was that he supplied 30,000 to 40,000 litres per month until December 1988. No records were produced. I do not accept Mr Pustkuchen's evidence as a reliable estimate. The evidence is not of sufficient quality to enable me to calculate with any confidence the amount of the unpaid royalties and I decline to attempt to do so. The claim by the first defendant under this head has not been proved.

99 The first defendant claims exemplary damages for breach of the lease. Exemplary damages will be awarded where a defendant's conduct has been wilful, outrageous, reprehensible, wanton, insulting or reckless: XL Petroleum (NSW) Pty Ltd v Caltex Oil (Aust) Pty Ltd [1985] HCA 12; (1985) 155 CLR 448. Exemplary damages may also be awarded to demonstrate the Court's disapproval of the defendant's conduct and to defer the defendant and others from similar behaviour: Uren v John Fairfax & Sons Ltd [1966] HCA 40; (1966) 117 CLR 118 per Windeyer J at 149.

100 The particular conduct relied on by the first defendant is the conduct of the plaintiffs in seriously disregarding the requirements of the statutory authorities leading to the threatened closure of the roadhouse and the plaintiffs' conduct in making unlawful use of adjoining lots to establish the accommodation aspect of their business.

101 Suffice it to say that I am not persuaded that the first defendant has established an entitlement to exemplary damages and I decline to award exemplary damages. My reasons are that, in my opinion, the first defendant seemed content to let the plaintiffs do whatever they liked concerning the use of adjoining land. Anyway, I do not see how misuse of adjoining land could be a contumelious breach of the lease causative of damage to Banning Holdings such as to give rise to a claim for exemplary damages. Although Mr Banning sent some fairly strong letters of complaint to the Websters with respect to their breaches of the lease, he does seem to have been rather tolerant for a long time with respect to their manner of operation of the roadhouse. There seems to have been no landlord inspections to ensure compliance with the tenants' covenants as to health regulations and by-laws and so on and, as has already been noted, Mr Banning did not visit the premises until some time in May 1988. The condition of the premises, the location of the accommodation units and the like must have been obvious to him at that time. He took no firm action.

102 I think it must be a rare case when a landlord is able to persuade a Court to award exemplary damages for breach of lease covenants by a tenant. This is not such a case.

103 In my opinion, the Websters' action against Sergeant Lampard entirely lacks a factual foundation.

104 Although the cause of action which is pleaded against the second defendant is not explicitly the tort of misfeasance in public office, it was made clear by Mr Duckham in opening that it was this tort which was alleged. That being so, it was for the plaintiffs to prove that there was an intention on the part of Sergeant Lampard to cause harm to the Websters or that he knowingly acted in excess of his power: Northern Territory of Australia v Mengel (1995) 185 CLR 307 at 345; Murcia Holdings Pty Ltd v City of Nedlands [1999] WASC 241; (1999) 22 WAR 1 at 37 to 42. Furthermore, the plaintiffs had to prove that the actions of Sergeant Lampard actually did cause harm.

105 It was not submitted on behalf of the plaintiffs that, even if the first defendant was entitled to re-enter and take possession of the premises on 21 December 1988, the plaintiffs nevertheless suffered harm by the conduct of the second defendant. I have held that the first defendant was entitled to re-enter and that the plaintiffs were properly evicted. If and insofar as the conduct of the second defendant caused the plaintiffs actually to go out of possession on the day in question, the plaintiffs cannot be heard to say that they thereby suffered financial loss. They were simply not entitled to stay in the premises. No other kind of harm is alleged. There is no allegation that Sergeant Lampard caused physical harm to Mr or Mrs Webster or their property. The action of misfeasance in public office would therefore fail for want of proof of this essential element.

106 In my opinion, it fails on other grounds as I shall now try to explain.

107 Mr Banning decided to request the assistance of police in connection with the eviction of the Websters. On the way to Yellowdine, he therefore attended at the police station where he found Sergeant Lampard on duty. This was coincidental. There had been some contact between the two men on a couple of occasions concerning the activities at the roadhouse, but they had not previously met and the meeting between them on 21 December at the Southern Cross police station was not by pre-arrangement. Mr Banning simply wanted police to be present in case of trouble and it was no concern to him whether the escort included Sergeant Lampard or not. As to the reasonableness of the request for a police presence, I accept Mr Banning's evidence that in an altercation with Mr Webster at an earlier time during the tenancy, Mr Webster had threatened to bulldoze or set fire to the roadhouse if the first defendant tried to evict him and his wife. There was evidence also that Mr Webster had spoken to Mr Banning about acquiring a firearm. It is therefore not surprising that Mr Banning should take the precaution of having police present on the occasion of the eviction.

108 I accept the evidence of Mr Banning and Sergeant Lampard that when Mr Banning attended at the police station and advised Sergeant Lampard of his intentions and requested a police presence, Sergeant Lampard took a number of steps to satisfy himself that Mr Banning was apparently entitled to do what he was intending to do and that the request for a police presence was reasonable. I find that Mr Banning informed Sergeant Lampard that he was the owner of the premises and intended to evict the Websters on the ground that they were in default of their rental obligations under the lease and that, in effect, the lease was terminated because notices had been served on the premises by the Yilgarn Shire in effect condemning the premises.

109 Of course, it was Banning Holdings rather than Mr Banning who was the landlord, but nothing turns on that.

110 I find that Mr Banning informed Sergeant Lampard that Mr Webster had previously threatened to destroy the premises if there was an attempt to evict him. Mr Banning showed Sergeant Lampard the lease and copies of the Yilgarn Shire notices condemning the premises. I accept Sergeant Lampard's evidence that he then went into another room and telephoned the Shire of Yilgarn and spoke to Shire officials, including Mr Houston and was told things which to his mind confirmed what Sergeant Lampard had been told by Mr Banning concerning ownership of the premises and the service of notices with respect to the premises. I find that Sergeant Lampard honestly believed (as was the fact) that an eviction would be lawful and decided to accede to Mr Banning's request to accompany him to the roadhouse and that he did so for the purpose of keeping the peace and with the intention of intervening only if a breach of the peace was likely to occur. As it happened, Sergeant Lampard, in his capacity as Local Court bailiff, had a warrant of execution to be served on the Websters at the roadhouse. His attendance at the roadhouse was necessary for that purpose and this was an additional reason why he decided to accede to Mr Banning's request.

111 Sergeant Lampard instructed a Constable Elkes to accompany him and he also instructed a Constable Weatherald, who was conducting patrol duties on that day, to be in the vicinity of the roadhouse in case he should be required.

112 I find that Sergeant Lampard and Constable Elkes arrived at the roadhouse at about 11.30 am. Mr Banning and his party followed closely behind. On arrival at the roadhouse, Sergeant Lampard saw Mr Webster in the vicinity of the petrol bowsers and approached him. He served Mr Webster with one copy of the warrant of execution and inquired about the presence of Mrs Webster. Mr Webster told Sergeant Lampard that Mrs Webster was in Perth shopping and Sergeant Lampard thereupon handed him the other service copy of the warrant of execution. Having done that, he informed Mr Webster that Mr Banning had come to the roadhouse to evict him and that the police were there "in case there's any trouble, any violence" (AB 962). At this moment, Mr Banning approached Mr Webster and told him that the Websters were evicted and that it was time for them to go and that new managers were to be installed. He indicated Mr Ries, who was present, would be the new manager and told Mr Webster that Mr Brewer, also present, was there to conduct a stocktake. During the exchange between Mr Banning and Mr Webster I find that Sergeant Lampard and Constable Elkes were standing away from them. I find that Mr Webster became very upset and agitated, accused Mr Banning of trespassing and demanded that Sergeant Lampard arrest Mr Banning for trespass. I find that Mr Webster approached Mr Banning in an aggressive and threatening manner and Mr Banning stepped back. I find that Sergeant Lampard then intervened. He told Mr Webster that he had satisfied himself that Mr Banning was the owner of the premises and he said to Mr Webster words to the effect that if Mr Webster did not comply with Mr Banning's request to leave the premises, it would be he who may be committing the offence of trespass and that it was he who might be subject to arrest. I find that Mr Webster then went to one of the roadhouse tills and took money from it and then began to collect other belongings.

113 Mr Brewer asked him to stay while the stocktake was completed and a record made of the stock, but Mr Webster refused. When Mr Brewer persisted, Mr Webster threatened to strike him. I find that Sergeant Lampard then went outside with Constable Elkes.

114 Sergeant Lampard attempted to proceed with the execution of the Local Court warrant. He attempted to levy execution on a motorcycle and for this purpose inquired of Mr Webster who it belonged to and Mr Webster told Sergeant Lampard that the motorcycle did not belong to him but to his son. I find that Sergeant Lampard and Constable Elkes commenced to note down serial numbers of some of the motorcycles that were present on the premises. At about this time, Constable Weatherald arrived and a short time later all three policeman left. Sergeant Lampard and Constable Elkes drove back to Southern Cross and resumed other duties.

115 When the policemen left the roadhouse, Mr Banning and his party and Mr Webster were still present. Sergeant Lampard had nothing more to do with the matter.

116 Sergeant Lampard was subjected to a long cross-examination. It is obvious that this long drawn-out action has taken its toll upon him and at times he became emotional and angry and tended to over-express himself. I do not find this in the least surprising and it did not reflect on his credit to any significant extent. He was a truthful and reliable witness as to all matters of importance. Much of his evidence was supported by documents and confirmed by other witnesses whom I considered to be reliable.

117 They are my primary findings of fact and it follows from them that Sergeant Lampard never had an intention to inflict harm upon the Websters. His principal purpose in attending at the premises on the occasion of the eviction was to ensure that there was no breach of the peace. It was proper and reasonable to believe there might be a breach of the peace. I think it is very likely that, had Sergeant Lampard and Constable Elkes not been present, there would have been a breach of the peace. I am not persuaded that Sergeant Lampard acted otherwise than in good faith.

118 As to whether Sergeant Lampard acted beyond his power, it is necessary to identify the harmful act which is said to have been done by him, in order to determine whether it was or was not beyond power. It was plainly within his power as a policeman and bailiff to attend at a scene at which there was likely to be a breach of the peace and to serve legal process, and I do not understand the plaintiffs to contend that Sergeant Lampard's attendance at the roadhouse for those purposes would have been an abuse of office. Their case is that he attended "for the purpose of evicting" them, and that he actually did evict them, and it was this conduct which was abuse of office. Their case is pleaded in the following terms in the statement of claim:

"15A The Second Defendant accompanied Banning to the premises for the purpose of evicting the Plaintiffs.

15AA The male Plaintiff was on such occasion informed by the Second Defendant that if he did not co-operate with the request to physically leave the premises forthwith the male Plaintiff would be subject to immediate arrest on unspecified charges.

15B ...

15C The Second Defendant had no authority in law to accompany Banning to the premises for the purpose of evicting the Plaintiffs.

15D ...

15E ...

15EA The Second Defendant also required the male Plaintiff on the said morning of the 21st December 1988 to physically leave the premises such requirement being made known after the male Plaintiff had informed Banning and those accompanying him that they were trespassing on the premises.

15F The Second Defendant had no authority in law to require the male Plaintiff to physically leave the premises of which the male Plaintiff was the co-leaseholder. Alternatively the Second Defendant acted in reckless disregard of the limits of his authority in so acting.

15G The action of the Second Defendant in requiring the male Plaintiff to physically leave the premises on the 21st December, 1988 was motivated by malice."

119 As appears from the findings that I have made, at no stage did Sergeant Lampard order Mr Webster from the premises or, to use the language of the pleadings, "require the male plaintiff to physically leave the premises" on pain of "immediate arrest on unspecified charges". Nor did Sergeant Lampard "accompany Banning to the premises for the purpose of evicting the plaintiffs". Sergeant Lampard accompanied Mr Banning and his party to the premises for the purposes of preventing a breach of the peace and serving legal process. The advice given by Sergeant Lampard to Mr Webster that if he did not comply with Mr Banning's demand to leave, it was Mr Webster who might be trespassing and Mr Webster who might be liable to arrest did not amount to a requirement or an order that Mr Webster leave the premises. The advice was given in response to Mr Webster's aggressive reaction to the notice of eviction, to his persistent claims that Mr Banning was a trespasser and to his angry demands that Sergeant Lampard arrest Mr Banning for trespass. It was given at the moment when Mr Webster appeared to be about to strike Mr Banning and its purpose was to stop that happening. Sergeant Lampard and the other officers left the scene as soon as the risk of a breach of the peace appeared to have subsided. At that time, Mr Webster was still at the premises. He was collecting belongings and preparing to leave, and in so doing he was responding to Mr Banning's eviction notice and not to any requirement of Sergeant Lampard, or to any threat that unless he did so he would be "subject to immediate arrest on unspecified charges".

120 The plaintiffs' action against the second defendant fails and must be dismissed.

Webster & Anor v Banning Holdings Pty Ltd & Ors [2001] WASC 11

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (151 paragraphs)

Webster & Anor v Banning Holdings Pty Ltd & Ors [2001] WASC 11 (25 January 2001)

Parties

Cases Cited (8)