Whitehaven Coal Mining Limited v Tomaska

Supreme Court of NSW|2012-08-02|Before: Hislop J, Johnson J

INTRODUCTION 1In January 2007 the defendant contracted for the sale to the plaintiff of a rural property known as "Stratford" near Gunnedah, NSW. The sale price was $2.2 million. On 6 March 2007 the sale was completed. Thereafter the plaintiff was registered as the proprietor of the property. The proceeds of the sale were held by Ms Boyce, as the solicitor for the defendant, in a controlled moneys account until July 2010 when they were transferred to the defendant. 2The Contract for the sale of the property contained an additional provision in the following terms: "44. It is hereby agreed that the Vendor may remain in occupation of the property for a period not exceeding one (1) calendar year from the date of completion, upon the following terms and conditions: (a) There will be no occupation fee. (b)The Vendor will maintain Public Liability insurance for the property for an amount of no less than $10,000,000.00. (c)The Vendor's such use and occupation of the property will be at his own risk. (d) The Vendor will continue to pay all electricity and telephone expenses arising out of their use and occupation of the property. (e) The Vendor will operate, keep and maintain the property in accordance with the rules of good husbandry." 3Notwithstanding the expiry on 6 March 2008 of the licence granted by cl 44 the defendant has remained in occupation of the property or part thereof to the present time. He has refused requests by the plaintiff to leave. He has paid no occupation fee. 4The plaintiff has brought these proceedings against the defendant seeking judgment for possession of the property and damages. The defendant, who acted for himself in the proceedings, disputed the plaintiff's claim. The original defence filed by him was struck out as embarrassing by Johnson J who granted liberty for the defendant to file an amended defence. The defendant has filed two amended defences. They are also objectionable but in the interests of the matter proceeding the plaintiff did not seek to strike them out and the hearing proceeded on a "modified defence statement dated 24 April 2012".

Background facts 5The following facts are agreed or not the subject of serious contest: (a) The defendant owned and lived on the property from 1996 to 6 March 2007. He raised livestock and crops there. (b) The plaintiff is a mining company. It wished to lease land on "Stratford" for use as a haul road for its mining operations. (c) The defendant did not have a telephone and contacting him was difficult. (d) Mr Hewitt, a director of Garvin Cousens, auctioneers, stock, property and real estate agents of Gunnedah, knew both the defendant and Mr Jones, the plaintiff's community liaison officer. He drove Mr Jones to "Stratford" and introduced him to the defendant. The meeting was for the purpose of Mr Jones discussing the obtaining of a lease for the haul road from the defendant. The property was not, at that time, on the market. (e) The defendant indicated to Mr Jones he did not wish to lease part of the property for a haul road and would rather sell the whole property to the plaintiff. (f) The plaintiff offered $1.8 million to purchase the property. This was rejected as was an offer of $2 million. The parties ultimately agreed on the figure of $2.2 million. The defendant, Mr Jones and Mr Hewitt were involved in the negotiations, though the role of Mr Hewitt was the subject of some dispute. There is a major dispute as to whether cl 44 was agreed by the parties. (g) Ms Boyce acted as solicitor for the defendant on the sale. Ms Boyce also acted for the plaintiff on the purchase. (h) Contracts were exchanged on 22 January 2007 and the sale was completed on 6 March 2007. (i) No steps were taken to require the defendant to vacate the property between 6 March 2008 and April 2009. (j) In May 2009 the plaintiff sought expressions of interest in relation to a lease of the property to commence on 1 August 2009 for a period of three years with an option to renew for a further three years. The closing date for lodging the expressions of interest was 12 May 2009. (k) A number of expressions of interest were lodged by 12 May 2009. The highest offer was a rental of $70,000 per annum from the Gardner Partnership. The property was leased to the partnership. The lease was dated 23 July 2009 and commenced on 1 August 2009. The lease expressly excluded the Stratford residence and surrounding curtilage. On 25 January 2010 Mr Jones, by letter, advised the partnership: "I hereby confirm that your lease of the property Stratford includes the right to occupy the cottage on the property when it is vacated by Mr Tomas Tomaska at the end of July 2010. The lease of the cottage is included in your current lease at no additional charge for the duration of the lease and any options... A copy of this letter has been forwarded to the company's agent Mr Bert Hewitt of Garvin and Cousens - Gunnedah." (l) An expression of interest by the defendant dated 13 May 2009 offering a rental of $30,000 per annum was unsuccessful. In July 2009 the defendant removed his cattle from the property and sold them through the agency of Mr Hewitt. Thereafter he effectively confined his occupation to the residence on the property. (m) On 14 April 2010 the plaintiff served on the defendant a notice to quit by 31 May 2010. The notice provided: "You are hereby given notice to vacate the premises on the property 'Stratford' Wean Road, Gunnedah on or before 31 May 2010 at 4.00 pm. Failure to comply with this Notice may result in legal action being taken against you..." It is clear from subsequent correspondence that the parties treated the notice as extending to the whole of the property. (n) The defendant responded with two letters each dated 29 April 2010. The letters were addressed to the managing director and chairman of the plaintiff with copies to Messrs Muldoon and Hewitt and Ms Boyce. One letter stated, inter alia: "I have been advised by Whitehaven of their requirements and these are not within the scope of our arrangements which were established in Autumn 2006 at the Stratford Woolshed in a lengthy conversation ... What you delivered in the past years is not what was agreed to. I request and require you to fulfil your obligations as originally determined and summarized in a separate document also included..." The other letter set out the alleged terms as follows: "The terms established by Tomas Tomaska and the Whitehaven Coal Limited in 2006 are as follows: Perpetual lease of the Stratford property 3000 acres. (Originally Tomaska Family Property) At no cost to the previous owner, and arranged as part of the purchase terms by Whitehaven Coal Limited and Tomas Tomaska. The purpose, to continue with current activities, uninterrupted by the Mining Operation. Lease by establishment of additional 2500 acres. (Originally Roger Family Property.) To permit the expansion of the operation with charges to be determined..." (o) A copy of each of the letters was sent by the defendant to Ms Boyce. She responded by letter to the defendant dated 14 May 2010, inter alia: "...As advised to you at our first meeting, when a person enters into a Contract for the Sale of Land (the Contract) the terms and conditions stated in that Contract are the only terms and conditions relevant to the sale. You attended our office on 19 January 2007, and we went through the Contract at length. Each of the terms and conditions were discussed, and you were informed that you had twelve months to remain on the property and after that time you would be required to leave. You indicated that you had already spoken to your agent Bert Hewitt and he was seeking another property for you to purchase. The information in your letter regarding a Perpetual lease for the 'Stratford' property and lease for the Rodger's property were never discussed nor formed part of the terms and conditions of the Contract... Under the Contract you had the right to remain on the property, under licence, for no more than one calendar year. Whitehaven have allowed that time to be exceeded by over 2 years. The licence has now been revoked, and you cannot remain on the property. You have to leave the property by 31 May, 2010 at 4.00pm." (p) On 20 May 2010 the plaintiff handed to the defendant a letter dated 17 May 2010 from the plaintiff to the defendant which was in the following terms: "We have your letter of 29 April 2010, but do not agree with the matters raised in that letter. We entered into negotiations for the purchase of your property 'Stratford' in late 2006. At no time did we have an agent acting on our behalf. You requested your agent, Bert Hewitt who assisted you with stock matters, to assist you in relation to this matter. The lease arrangements referred to in your letter were never discussed by us, let alone agreed. They are not contained in the Contract for the Sale of Land. The only arrangement we made with you was that you would be able to remain on the property for no more than 12 months after settlement to enable you to locate another property you could move to. Due to our business requirements, we allowed you to stay on the property for longer than one year. There was no formal extension of the time you could remain on the property, but we allowed you to stay. You were only on the property with our agreement. We no longer agree for you to remain on the property and require you to vacate. We paid the purchase price for your property and now we are the owners of that property. We now require you to vacate the property. We have explained to you that you are required to vacate the property. As you were not making any attempt to vacate the property, we saw no option other than to hand you formal notice that your licence is terminated and that you are required to vacate the property as of 31 May 2010 by 4pm, as per the notice to quit, copy enclosed. Failure by you to vacate the property by that time will result in you being a trespasser on the property. We have had a good working relationship with you for a number of years, and we do not want to cause any further distress to you, however we require the land for the purposes of our business and you are required to vacate the property. Should you not vacate the property by 31 May 2010, 4pm we will have no option than to approach the Court for an Order for your removal from the property and all the costs that will incur in that process we will be asking for you to be held liable to pay. We therefore ask you to remove yourself from the property and avoid unnecessary expensive legal action." (q) On 24 May 2010 the defendant sent a letter addressed to the Managing Director and Chairman of the plaintiff with copies to Messrs Muldoon and Hewitt and Ms Boyce stating: "...Lorraine Boyce Solicitors acted in the sale of this property only on my behalf. The sale 'Lease Document' was for Whitehaven's purpose of taxation relief only. I have never received a lease document from the mine but did request one frequently. My occupation is on verbal arrangements and is a mandatory part of the sale conditions. Tony Jones of Whitehaven and I determined these as conditions of this sale. As the vendor I understood and still understand that my conditions would be met. The sale terms included my ongoing primary production and property sale. Garvin and Cousens are stock agents representing my stock sales for many loyal years. As in my previous correspondence I have agreed upon the sale only with the understanding that I would continue to operate this property as before the sale. I was approached by Whitehaven, the property was not listed. And as incentive additional land was discussed and could be made available..." (r) On 28 May 2010 Mr Muldoon, who had taken over Mr Jones' role as community liaison officer for the plaintiff, attended with Mr Hewitt upon the defendant and at that meeting offered to grant the defendant a one month extension of time to vacate the property, together with a contribution of up to $4000 toward removal expenses. Mr Hewitt also offered to assist the defendant in any way he could to locate alternative accommodation and advised the defendant that he was in the process of arranging a clearance sale and could assist the defendant to sell any equipment if he wanted. The plaintiff's offer was reduced to writing but was not accepted by the defendant. The defendant did include a number of items in the clearance sale arranged by Mr Hewitt. (s) On 23 June 2010 Messrs Muldoon and Hewitt met with the defendant at Mr Hewitt's office. Mr Muldoon inquired of the defendant if he was interested in taking up a six month licence to occupy the residence. Pursuant to that conversation the plaintiff, on 7 July 2010, forwarded a licence agreement in respect of the residence to the defendant. The offer to take up the licence was not accepted by the defendant and on 24 August 2010 the offer was formally withdrawn. (t) On 10 September 2010 a notice of termination of periodic tenancy was served on the defendant by the plaintiff. It required delivery up of vacant possession by no later than 10 November 2010. (u) On 18 November 2010 the plaintiff made application to the CTTT for an order for possession of the land and residence. The application failed on jurisdictional grounds.

The submissions 6The plaintiff submitted, in short, that it was the registered proprietor of the property. It had granted the defendant a licence to occupy the property for one year only. The licence had been reduced to writing and was part of the Contract for sale signed by the defendant. The Contract for sale superseded any previous negotiations between the parties. The period of the licence had expired. The plaintiff had not agreed to give the defendant a perpetual lease over the property. The defendant had no right to occupy the property, or any part thereof. The plaintiff was entitled to the orders sought. 7The defendant essentially submitted that Mr Jones had agreed the defendant should have a perpetual lease over the property at no rental. It had been further agreed the defendant would be given the opportunity to obtain additional land from the plaintiff. The licence referred to in cl 44 of the Contract for sale was not operative, it was merely a device used by the plaintiff to ensure GST was not payable. He was entitled to remain in occupation of the property pursuant to the lease he had agreed with Mr Jones.

Consideration 8The defendant gave evidence in narrative form. He called no witnesses. The plaintiff called Messrs Jones, Muldoon and Hewitt and Ms Boyce. There was significant conflict in the evidence given on behalf of the plaintiff and given by the defendant relating to a number of factual issues. The determination of the proceedings depends largely upon the determination of those issues.

The plaintiff's case 9Evidence was adduced on behalf of the plaintiff which, if accepted, established that the only agreement for the occupation of the property made by the plaintiff with the defendant in 2006/2007 was one which permitted the occupation of the property by the defendant for one year from the date of completion. This agreement was reduced to writing and formed part of the Contract for sale. 10That evidence and relevant principles included: (a) the Contract for sale of the property (Exhibit A) which the defendant admitted was signed by him and which included cl 44; (b) the general principle that a person who signs a document which it is apparent is intended to have legal consequences will be bound by its terms. That is whether or not he or she has read the document or is relying on another for his or her understanding of the document - Gallie v Lee [1969] 2 Ch 17 at 36-7; (c) the evidence of Messrs Jones and Hewitt as to the negotiations leading to the asserted agreement; (d) the evidence of Ms Boyce, solicitor, that she read and explained the contract, and in particular cl 44, to the defendant who acknowledged that he understood each clause of the contract and that he was happy with it; (e) the evidence of Ms Boyce that she explained the effect of cl 44 as giving the defendant a right of occupancy for one year only from completion and that the defendant acknowledged the clause and made no objection to it; (f) the participation by the defendant in the 2009 tender process for the lease of the property and the subsequent sale of his herd (which he said was irreplaceable on this continent and represented his life's work) rather than asserting, by legal action if necessary, his alleged entitlement to a perpetual or other lease; (g) the terms of cl 50(1) of the Contract for sale, there being no other provision for the occupancy of the property contained in the Contract for sale.

The defendant's case 11The defendant sought to answer the plaintiff's case by asserting that in 2006 the plaintiff had, through Mr Jones, agreed to give him a perpetual lease over the property at nil rental. He did not seek to rely on the Agricultural Tenancies Act 1999. He submitted the plaintiff's case was the result of collusion on the part of the plaintiff's witnesses, each of whom did "bear false witness". Further, Mr Hewitt and Ms Boyce were frequently engaged by the plaintiff and thus had reason to support the plaintiff's claim. Mr Jones had retired from the plaintiff's employment.

The agreement - Mr Jones 12The defendant gave evidence that Mr Jones made it clear that the plaintiff had no interest in agriculture as a main concern. If the coal mining requirements were met, the plaintiff did not want to know anything else about the property and the practice was to return the property back to the operators, owners who were there before. Based on his conversations with Mr Jones, the defendant believed he was entitled to stay on the property and to continue his farming activities, including running stock and that was why he relinquished the title. He understood he was going to achieve a lease. The plaintiff had not moved to bring his occupancy to an end on 6 March 2008. 13Thus, the defendant and the plaintiff accepted there was agreement for the defendant's occupation of the property after the sale. The conflict was in respect of the type and duration of the agreement. 14In the latter respect the defendant's case was unclear. In his second letter dated 29 April 2010 he had asserted the term established in 2006 was a "perpetual lease". This was not true. As the defendant later admitted, the words "perpetual lease" were first introduced by him in 2010. Elsewhere, in cross examining the plaintiff's witnesses, he suggested the term was "forever", "for life", "for the life of the mine". It seems to me improbable the plaintiff would bind itself to a lease for an indeterminate, potentially lengthy, period. In cross examining Mr Jones, the defendant put that Mr Jones had offered the defendant a stay "with an undisclosed number of months" and said that "probably twelve months was kicked around". 15Mr Jones gave evidence he agreed that the plaintiff had no ambition to operate the land as a pastoral company and did not require Stratford to be an ongoing agricultural operation. He also agreed that the 12 month licence did not preclude future negotiation which remained open. 16Mr Jones gave evidence he never offered the defendant a perpetual lease over the property nor did he agree to the defendant staying on the property for more than 12 months. He described the defendant's assertion he was granted a perpetual lease over the land as "absolutely not true". He said he had never agreed with the defendant or even discussed with the defendant anything about a perpetual lease over the land, additional property or the property across the road. He was not questioned about the alleged practice of leasing back purchased properties to former owners. Mr Jones also denied that he had agreed to the defendant occupying the property "forever", "for life", or "for the life of the mine". 17Mr Hewitt denied he had said the defendant's stay would be "forever" and stated he had never heard a perpetual lease mentioned. He was not asked if he had told the defendant he could continue his stay indefinitely and I do not accept that he did so. 18The defendant asserted that he understood he was going to receive a lease pursuant to the agreement as alleged by him and he had accordingly chased up Messrs Jones and Hewitt on a number of occasions seeking that document. Mr Jones gave evidence he had no recollection of the defendant asking for lease documents. Mr Hewitt was not asked as to his recollection in cross examination. I conclude the defendant did not request lease documents from Mr Hewitt or Mr Jones.

Agency of Mr Hewitt 19The plaintiff asserted Mr Hewitt was the defendant's agent. The defendant denied this though he conceded Mr Hewitt did claim that he should be financially reimbursed by the defendant. 20Mr Jones gave evidence that: (a) after the defendant rejected his suggestion as to the possible lease of part of the property for the haul road all negotiations were conducted through Mr Hewitt, who was the defendant's agent at the time; (b) he understood Mr Hewitt was the agent of the defendant because he knew that Mr Hewitt was the defendant's agent in the sale of livestock so he assumed that he was his agent for the purposes of the sale of the property. He did not directly ask Mr Hewitt if he was the agent of the defendant nor did he check with the defendant in this regard. However, he was present when Mr Hewitt advised the defendant that there would be commission to be paid on the sale and the defendant indicated that he understood and agreed that that was so; (c) Mr Hewitt is the plaintiff's agent now and has been for the past four, five or six years, subsequent to the Stratford sale. 21Mr Hewitt gave evidence: (a) he agreed he was engaged by Mr Burgess, the plaintiff's area manager, as the plaintiff's representative and that he said to Mr Jones that he would take him out and introduce him to the defendant because the plaintiff wanted to put a road through Stratford; (b) he believed he became a real estate agent for this property when the defendant said he would rather sell the property than lease the roadway as it was at that time Mr Hewitt started negotiations. He said he became the agent for Stratford and that relationship was established in the conversations he and the defendant had about what money the defendant would take and whether Mr Hewitt was going to be an agent. He took an agency agreement to the defendant's property on one occasion and the defendant negotiated the commission from 2½ percent to 2 percent. However the defendant did not sign the agreement and eventually Mr Hewitt ceased seeking payment; (c) he was probably working for both parties. 22The Contract for sale contained an additional provision in the following terms: "32. The Purchaser warrants that it has not been introduced to the property by any Real Estate Agent or Agents other than herein before set out..." 23The first page of the Contract for sale states "Vendor's Agent" and there was then typed "without the intervention of an agent". 24It may well be that Mr Hewitt was assisting both parties. However, determination of the agency question would only be of relevance if Mr Hewitt had failed to comply with a request to pass on a relevant communication between the parties. Though the defendant referred to the possibility of a problem in this regard, no particular failure was evidenced and Mr Hewitt gave evidence that all relevant communications were passed on by him as directed.

The contract - instructions to act on sale 25The defendant gave evidence that: (a) at no time was he made aware that Ms Boyce had been engaged to act for the plaintiff on the sale; (b) he did not know how he came to see Ms Boyce. 26Ms Boyce gave evidence: (a) she was initially instructed by the plaintiff to act for it on the purchase; (b) the Contract for sale was prepared by her based on instructions from the plaintiff. The contract was prepared before she met the defendant. A copy of the contract was sent to Mr Beer, solicitor, as she had been told he was acting for the defendant, a fact which Mr Beer had confirmed. Subsequently Mr Beer advised her that he no longer held instructions for the defendant and would return the contract; (c) she met the defendant at her office on 19 January 2007. The defendant said he wanted her to advise him in relation to the Contract for sale. The appointment had been made as a result of telephone calls from Mr Jones and Mr Hewitt. At that time she made it very clear to the defendant that she was acting on behalf of the plaintiff and had prepared the contract on its behalf; (d) she told the defendant that she had received instructions from the plaintiff which had no objection to her acting for the defendant. She said she told the defendant that he was to tell her then if there were any problems with her acting for both parties. No concern was raised by the defendant. 27The defendant's assertions contrasted with Mr Hewitt's evidence that an appointment was made with Mr Beer but when Mr Hewitt drove out to the property to pick up the defendant, the defendant said he wanted to see the same solicitor as the plaintiff to make it easier. The appointment with Mr Beer was cancelled and an appointment was made for the defendant to see Ms Boyce - see also para 31 hereof.

The contract - explanation and signing 28The defendant, in his evidence, said he understood the law very well and read the law. In response to the question: "Are you in the habit of reading all the documents that are given to you in any situation?", he replied: "I read anything that moves in front of me, indeed, yes sir." 29In answer to the question "Would it be fair to say she [Ms Boyce] went through the entire document [the Contract for sale]?", the defendant replied: "No, that isn't correct. When you say 'entire' Ms Boyce read those things she believed were relevant. We didn't look at every single page and identify any items in every single page. She read those sections that were relevant, highlighted them to me and there was no disagreement. We just proceeded onto the sections she believed were relevant. I am familiar with contracts. I have been involved with many properties. I saw this as a routine interview. Q. You followed your usual practice of reading the document [the Contract for Sale] before you signed it, didn't you? A. Yes. I did but may I explain. Ms Boyce's office has no windows. I requested Ms Boyce to read the small writing because in a dark office, my sight wasn't working very well. So while I had her deliberate and why it took a little longer. She did explain it was a two hour meeting because the office had no natural light. It had weak light and I was having difficulty seeing the small writing so I went through the document that way but I was aware that what was in the document and I was satisfied. Q. On the third page of the document, there are a list of improvements and inclusions, do you see those? A. Yes I do indeed. Q. You gave some evidence earlier today, that not all the inclusions were there? A. That's correct. Q. Am I to understand that you read the contract and you at least identified that something on this page was incomplete? A. That's correct. Q. Notwithstanding that it was incomplete you were nevertheless satisfied not to make any alterations to the document? A. ...I wasn't concerned because I believed those items are perishables and they didn't have a lot of life so I left them out believing there was no benefit of mentioning an item which would, in a matter of years, be removable." 30The defendant did not put to Ms Boyce that the lighting in her office was poor or that he had complained to her of the lighting. 31In cross examination on 18 July 2012 the defendant's attention was directed to the front page of the Contract for sale just above where the defendant signed the contract, where it stated: "Purchaser Whitehaven Coal Mining Pty Limited ABN 65086426253 Ground Floor 895 Ann Street FORTITUDE VALLEY BC QLD 4006 Purchaser's Solicitor Lorraine Boyce Solicitors 239 Conadilly Street DX 6207 GUNNEDAH, NSW 2380" The following evidence was then given: "Q. Then do you see in the middle of the page a box in rather bold script, immediately above your signature, do you see that? A. Yes. Q. In the middle of that document, can you see the words 'Purchaser: Whitehaven Coal Mining Pty Limited'? A. Yes, I see the purchaser, yes. Q. Below that 'Purchaser's Solicitor: Lorraine Boyce', do you see that? A. Yes, I see that. Q. If you had followed, and I suggest you did follow your usual practice of reading this document before you signed it, it would have been apparent to you that Ms Boyce was acting on behalf of Whitehaven Coal as well as yourself? A. Not correct. There is nothing to say this material was there at the time. There is nothing to say that I didn't simply sign this page with that material being omitted, there is nothing to say that Miss Boyce had highlighted to me all that I would read or be alerted to the fact that the solicitor is purchaser's, nor am I aware even to date that it is the purchaser's solicitor. The fact I read the document, yes I am aware of the document. The fact it was read out to me, yes it was. At no stage would I be aware that the purchaser's solicitor was here as Lorraine Boyce. I cannot comment why but I am aware of no such thing, and there is nothing to say this wasn't added subsequently..." This explanation is implausible. 32On 2 August 2012, following adjournment of the hearing from 18 July 2012, the defendant gave evidence that he experienced: "...from time to time visual impairment in dull, poorly lit areas. If I have a very bright, strong light, my vision is normal, I can see 3 kilometres away and I can hear very well but at times on the conditions of the light I do not. The charge that's holding my body is much higher than it was 10 years ago and it appears as time progresses it has caused erosion. This is an electrical activity behaviour. The human body is supported in the atmosphere by electrical activity." 33The defendant also gave the following evidence: "Q. Mr Tomaska, do I understand that what you're saying is that on 19 January 2007 you could not read the contract for sale before you signed it and that is why Ms Boyce read parts of it to you? A. No, read all of it to me, not parts. And no, I didn't have total vision inability, I couldn't see the small writing which the contract was full of. So I was a little frustrated I asked Ms Boyce if she would mind and she did indeed not mind and she took me through the whole document. Q. To be fair to you, do I understand you to say today that you did or did not read the contract before you signed it because of your eyesight? A. I did not read the contract. Ms Boyce read it to me and at the end of our conclusion of the reading, she asked me to sign it, and I believe on the front page, and right through the documents there were these tags that she used to identify the pages but I have read it only this way and she would place her finger where I would sign and I would sign that. There was no more given by me." 34Ms Boyce described in her statement of evidence what she said occurred: "12. On that day [19 January 2007] I sat with the Defendant for over two hours and went through every term and condition in the contract of sale with him in detail, explaining each clause in layman's terms. ... 15. Once I had gone through the entire contract of sale with the Defendant, he acknowledged that he understood each clause of the contract of sale and that he was happy with it. 16. The Defendant then signed the contract of sale in my presence. 17. No-one else was present when the Defendant signed the contract of sale and the Defendant signed the contract of sale willingly." 35Ms Boyce explained in cross examination that: "A. The process was that I went through the front page and the terms and conditions there, the inclusions and improvements to the property and then went through the special provisions of the contract. Q. When you say 'I went' can you explain what you mean? A. I had the contract in front of me and I am saying-- Q. You are reading it? A. I am reading it. ... A. We discussed the whole contract provision by provision, detail by detail. Q. There were no objections? A. I am sorry, could you repeat that? Q. There was no objection to this particular document being included in the contract? A. It is the contract. It was the term of the contract and there was no objection from you. You acknowledged it. Q. So you are quite firm that there as no objection from Tomas Tomaska? A. Yes, definitely. Q. So the description of the occupation and terms and conditions there was no objection at all from Tomas Tomaska? A. Absolutely not." 36Ms Boyce, in her statement of evidence, referred specifically to cl 44 as follows: "13. When I was explaining the effect of clause 44 of the Additional Provisions of the contract of sale I made sure that the Defendant understood that he was required to vacate the Land 12 months after settlement and the defendant confirmed that he understood that. 14. The Defendant also confirmed his intention to look for another property in the next 12 months and told me that Hewitt was looking for another property for him already. ... 36. At no time did the Defendant represent to me that he thought he had a perpetual lease over the land or that he did not intend to leave the land as agreed." 37Ms Boyce's contemporaneous file note recorded, inter alia: "Tomas Tomaska 19/1/07 Attend on you x 2.20 Re discussion of contract Explain terms and conditions Confirm intention to look for another property in the next 12 months while remaining at 'Stratford'. Bert Hewitt is looking for property..." 38The defendant gave evidence that: (a) during the course of examining the Contract for sale: "There is an introduction of a lease document...I do not want this in the contract at all. I made that clear. Little upset but I'm very firm...it evolved nicely in the sense that Ms Boyce explains that the purchaser is searching for tax relief on the property and that tax relief is understood to be that the property must continue with the rural operation. I understand that is how it is going to be." (b) "To me these are just terms to meet the requirements of the authorities to satisfy themselves that the property is going to have an ongoing use as agricultural purpose. That is how I understood this particular inclusion." 39Ms Boyce answered in the negative the question: "Q. Do you recollect during this discussion of a contract referring to the fact that the occupation was to support the fact that the property would not attract GST tax?" 40There is no apparent reason why a lease for a period such as the defendant contended for would not have performed the same role as the licence if required for GST purposes as the defendant suggested. 41In her statement of evidence Ms Boyce said: "20. In or about February 2010 Jones told me that the Defendant had not moved off the Land as agreed and that the Plaintiff was having problems getting him to move. Jones said to me that the Plaintiff needed the Defendant to move off the Land now and that they had tried to be as nice as they could to the Defendant but it was not working. 21. This was the first I knew that the Defendant had failed to move off the Land as agreed between the parties." The defendant contended this evidence was false as Ms Boyce was forwarding monthly statements addressed to the defendant at Stratford in respect of the controlled moneys account and must have known that the defendant had failed to move off the land as agreed between the parties. The defendant submitted this deliberate falsehood was sufficient to destroy the whole of Ms Boyce's evidence. The defendant conceded he and Ms Boyce were "not obviously in dialogue" but he relied on the monthly statements. 42Ms Boyce's response was that she was not consciously aware that the defendant had failed to move off the land as agreed between the parties. She explained: "At the end of the sale of your property you asked me to hold your money pending your purchase of your other property. It was placed under controlled moneys and under requirements of the legislation notification has to be given to you in relation to that money. They are the notifications. I had no further contact with you or with Whitehaven regarding your occupation or otherwise of the property. I knew nothing of any arrangement of your occupation of that property from then on. From my requirements I had to tell you I continued to hold the money." 43I am satisfied by Ms Boyce's explanation. There was no apparent cause for her to turn her mind to the question of whether the defendant had failed to move off the land as agreed prior to the contact from Mr Jones or to lie in this regard. The compliance with the notification requirements of the legislation concerning controlled moneys would be mechanical and possibly attended to by members of Ms Boyce's staff. I do not consider this matter is such as to adversely impact upon Ms Boyce's evidence, much less completely destroy it. 44Ms Boyce said she made it very clear to the defendant she was acting on behalf of the plaintiff and had prepared the contract on its behalf. The defendant disputed Ms Boyce had made these matters clear to him. He observed that although Ms Boyce gave oral evidence in this regard, it was not mentioned in her statement of evidence. The defendant did not seek to test the situation by cross examination and, in my opinion, this matter does not reflect adversely on Ms Boyce's credibility.

The tender 45The defendant gave evidence that: (a) in 2009 Mr Hewitt was asked by the plaintiff to formalise a lease of the property by use of a tender process; (b) the defendant objected to this to Mr Jones and explained to him that he had an understanding which the parties had never endeavoured to document; (c) Mr Jones made a special arrangement for him as far as the tender went. The defendant believed that a market value was to be assessed on the submissions of the tenderers. He was to be given a chance to bid and given an insight into what he should be bidding when the tender was closed; (d) on the 13th he was visited by Mr Hewitt. Mr Hewitt and the defendant discussed an amount that they believed was a reasonable assessment of market value. Mr Hewitt accepted the defendant's expression of interest. 46Mr Hewitt gave evidence that he had gone to the property on Wednesday 13th and obtained the expression of interest from the defendant. He had been busy with other matters on the preceding days and had not got to the defendant. 47Mr Jones gave evidence: (a) that he could not recollect any special arrangements being made with the defendant in respect of the tender process; (b) however he was not in a position to allow a counter-bid as these were public tenders to a public company which had a responsibility to ethics and the law to keep those in a box and open them on the appointed day; (c) the defendant failed because his offer was too low. The tender was awarded to the highest bidder, the Gardner Partnership; (d) if the defendant had offered a reasonable and commercial rate to lease the land then the plaintiff would have given the lease to the defendant and he could have stayed there. However the defendant only offered the plaintiff $30,000 per year which was way below market value so the plaintiff could not commercially accept that offer; (e) after the tender was awarded, Mr Jones asked Mr Hewitt to tell the defendant that he had to take his stock off the land because the land had been leased to another; (f) Mr Jones gave a direction to Mr Hewitt to destock the property as the new lease was going to start. The cattle were sold and much of the equipment was sold at a clearance sale organised by Mr Hewitt. The defendant cooperated in this regard. 48The defendant gave evidence that prior to the disposal of the cattle he had asked Mr Hewitt if he could acquire a leasehold to hold some of the stock or all of the stock temporarily while the situation unfolded itself. Mr Hewitt was unsuccessful. I am unable to make a finding as to the accuracy of this evidence as it was not put to Mr Hewitt. 49Mr Hewitt, in para [52] of his statement of evidence dated 7 November 2011, said: "On 13 May 2009, Jones gave to me an expression of interest he had received from the Defendant submitting a tender to lease the Land for the sum of $30,000 per annum..." 50When Mr Hewitt was called to give evidence, plaintiff's counsel led from him that para [52] did not properly reflect the truth. He was asked by plaintiff's counsel: "Q. Can you please tell his Honour what in fact the true position is about what I have just read? A. What happened was I went out to Stratford to see Tomas about the lease of Stratford for him, so I discussed the lease with Tomas. He wrote his lease form out, gave it to me and then I put all the lease forms together because I was the agent and gave them to Tony Jones at Whitehaven and then, you know, they sort them out and tell me what they accept and then give them back to me. I actually went out and got the lease off Tomas and discussed with him there and then." 51The defendant submitted that as to para [52]: "...Mr Hewitt changes the story after speaking clearly to Mr Jones outside, so the witnesses had time to combine their notes. The scam's up. You best tell the truth. Mr Hewitt didn't tell the truth about the fact that the tender of 2009 was arranged by Mr Jones and the purpose was to seek market value. Mr Hewitt confirms that Tomaska offered market value." 52There is no evidence that Messrs Jones and Hewitt were parties to a scam which led to Mr Hewitt changing his evidence. I do not accept that a scam has occurred. 53The only explanation put by the defendant for participating in the tender process appears to be that he had a special arrangement with Mr Jones whereby the defendant would be given inside information so that he could obtain the lease. This however fails to explain why the defendant would have been prepared to agree to taking a lease for three years at $30,000 per year if, as he claims, he was entitled to a perpetual lease at nil rental. It would also be unlikely that if the special arrangement alleged was in place, the defendant's expression of interest would not have been dated 12 March 2009 or earlier to give the impression of regularity. However I do not understand the defendant to allege that Mr Hewitt or Mr Jones breached confidentiality in respect of the earlier expressions of interest. I do not accept that Mr Jones proposed or was a party to dishonest behaviour in relation to the tender.

Clause 50 54Clause 50 of the Contract for sale provides: "(i) This Contract constitutes the entire agreement for the sale of the property between the Vendor and the Purchaser. (ii) The Purchaser acknowledges that in entering into this Contract, the Purchaser has not relied on any conduct, statement, representation or warranty performed, made or given by or on behalf of the Vendor other than: (a) those set out in this Contract; and (b) those implied by Section 52A of the Conveyancing Act, 1919." 55Contracts for the sale of land must be evidenced in writing - s 54A(1) Conveyancing Act 1919. 56The general principle is that when a contract is required to be evidenced in writing, the writing must contain all the terms - Tallerman & Co Pty Limited v Nathan's Merchandise (Victoria) Pty Limited (1957) 98 CLR 93 at 113. The defendant submitted that the perpetual lease was separate and distinct from the Contract for sale which was just that, a sales contract nothing else. However, this contradicts the assertion in the defendant's second letter dated 29 April 2010 that the perpetual lease was "arranged as part of the purchase terms by Whitehaven Coal Limited and Tomas Tomaska". It also contradicts his letter dated 24 May 2010 in which he stated his "occupation was a mandatory part of the sale conditions". This is consistent with the evidence of Mr Hewitt that the defendant required the occupation agreement to be part of the sale conditions.

General 57The defendant gave evidence he had experienced a difficult period in his life leading up to the sale. His partner died in 1997, in 2001 the activities of mining arrived in the district and caused uncertainty to the rural landholders and a cessation of expansion. Difficult climate conditions were experienced between 2002 and 2005, resulting in the stock being reduced to half. The defendant was in dispute with the GIO re an alleged debt which caused his company to be placed in or threatened with liquidation. He had difficulty with the police and his telephone was disconnected. Mr Hewitt gave evidence that he had known the defendant for approximately ten years although he had only met him about six years previously when, in approximately April 2006, the defendant's sister approached him about assisting the defendant to get the land and stock back in order. The property and stock were not being properly maintained at that time. When Mr Jones arrived the season was better but because of the bankruptcy he could not turn to cultivation as he could not hire contractors. The defendant, in his submissions, said he "is a leper in the district now". 58The plaintiff submits that these are circumstances which make it likely that the defendant would have wished to leave the district. This may be so and it may have been the case in 2006/07. However, the fact the defendant has remained in the area to the present time suggests otherwise and I do not think any inference can be safely drawn from the circumstances. 59The defendant suggested on a number of occasions that Mr Burgess, the plaintiff's area manager, should have been called by the plaintiff to give evidence. I do not agree. Mr Burgess may have been the source of instructions but the persons who implemented those instructions were those who gave evidence and it is their evidence which is to be weighed.

Browne v Dunn 60Counsel for the plaintiff took Browne v Dunn objections to some of the evidence given by the defendant. Plaintiff's counsel stated: "...I am not objecting to him giving his version of events. What I am objecting to is him asserting that other witnesses whom he has cross examined have said things when he did not suggest to them that they said those things when he was cross examining them..." 61The evidence objected to was not clearly identified by plaintiff's counsel and the issue was deferred to enable the passages objected to to be located and identified. These were identified in a document filed in court on 2 August 2012. 62At one stage counsel for the plaintiff stated: "You could always approach the evidence this way; having received submissions you could admit it but discount its weight. The plaintiff would be happy for you to proceed that way rather than incurring another day of court time and recalling the witnesses concerned who are Mr Hewitt and Mr Jones." 63The defendant said: "I do not have concern accepting your approach." 64In my opinion, this is an appropriate way to deal with the issue. Accordingly, where a breach of the rule has occurred, I admit the evidence objected to on this basis.

Conclusion 65I have considered the evidence in this matter and have had the benefit of observing the witnesses. Overall, I prefer the evidence for the plaintiff. In my opinion the evidence for the plaintiff was generally consistent and accorded with the objective facts. I reject the submission that the plaintiff's witnesses colluded to give false evidence. I found the defendant's evidence unpersuasive. In my opinion, it is more likely than not that the agreement of the parties was that contended for by the plaintiff and contained in cl 44 of the Contract for the sale of land. 66The one year period in cl 44 expired on 6 March 2008. The letter from the plaintiff to the defendant dated 17 May 2010 sets out what then occurred: "...we allowed you to stay on the property for longer than one year. There was no formal extension of the time you could remain on the property, but we allowed you to stay. You were only on the property with our agreement. We no longer agree for you to remain on the property and require you to vacate. ... ...As you were not making any attempt to vacate the property, we saw no option other than to hand you formal notice that your licence is terminated and that you are required to vacate the property as of 31 May 2010 by 4pm, as per the notice to quit, copy enclosed." 67The plaintiff offered an extension of one month to vacate the property. It also offered a six months licence. These offers were conditional and were refused by the defendant. In my opinion, they do not affect the plaintiff's entitlement to possession. 68The defendant gave evidence that at about the time of the lease to the Gardner Partnership Mr Hewitt, on behalf of the defendant, spoke to [the plaintiff] and the defendant was "told I can continue residing at the homestead..." and Mr Hewitt "assured me that there is no concern about me staying on and that I can continue my stay indefinitely." 69However, Mr Hewitt in his statement of evidence said: "55. I then went out to the Land again to help the Defendant with his stock. At the time I explained to the Defendant that he was no longer able to occupy the Land because the Gardner Partnership had leased the Land. I told the Defendant that he could stay in the residence on the Land for now but that really his time was up and that he would have to start thinking of moving out of the residence very soon. 56. The Defendant said to me words to the following effect: Defendant said: 'Fair enough.'" I prefer the evidence of Mr Hewitt on this issue. 70The defendant has no right to occupy any part of the property. In my opinion, the plaintiff is entitled to possession of the property (subject to the rights of the Gardner Partnership).

Damages 71The plaintiff claims damages in respect of the period 7 March 2008 to 2 August 2012 and continuing until an order for possession is made. 72The basis of the claim was outlined by plaintiff's counsel as follows: "...After 12 months following the completion, Mr Tomaska had no long a right to occupy the land and he was a trespasser, and in those circumstances the plaintiff is entitled to damages for trespass. The quantum of those damages is based on the market rent that could have been obtained (mesne profits) or alternatively the use to which the purchase moneys could have been applied (Hungerford damages) had Mr Tomaska not been in occupation..." 73The alternative methods of calculation to the hearing date proposed, were: (a) Hungerford damages $303,012.33 Mesne profits $39,178.57 $342,190.90 (b) Mesne profits $98,191.78 Mesne profits $39,178.57 $137,370.35 74The first method involved the calculation of Hungerford damages until the commencement of the lease to the Gardner Partnership on 1 August 2009 and thereafter mesne profits calculated using the second method. 75The second method involved the calculation of mesne profits for the whole of the period calculated at $70,000 per annum (being the amount of rental obtained from the Gardner Partnership) to the commencement of the lease to the Gardner Partnership on 1 August 2009 and thereafter at $250 per week, being the market rent suggested by Mr Hewitt as the top of the reasonable range for the residence and curtilage. 76"A claim pursuant to Hungerford principles arises out a party's deprivation of money which would have been available to it and utilised for commercial purposes (such as an investment with interest or to reduce existing indebtedness) but for the wrongful act of the other party..." - Balanced Securities Limited v Bianco (No 2) [2010] VSC 201. 77The Hungerford damages claim was described by plaintiff's counsel as follows: "...Mr Tomaska received $2.2 million. He has had the benefit of the property and the money until such time as the grazing lease was entered into, and that money could have been applied by the plaintiff for other purposes..." 78In my opinion, Hungerford damages are not applicable in this case. The plaintiff had purchased the property for the purpose of building and using a haul road. This it had done. The plaintiff had received the benefit which it sought from the purchase price. 79In Lollis v Loulatzis [2007] VSC 547 Kaye J held at [219]: "Damages awarded for trespass to land are sometimes described as 'mesne' profits. The usual measure of such damages is constituted by the value of the market rent for the premises which the trespasser should have paid during the period of the trespasser's occupation of the premises. In order to prove an entitlement to such damages, it is not necessary for the plaintiff to establish that the property has been damaged, or that the plaintiff would have been able, or indeed willing, to lease the premises during the period of the trespass." 80The Gardner Partnership still wishes to include the residence in the lease and is ready to move in as soon as the chance is available. The residence would be part of their lease so no additional moneys would be charged. 81Mr Hewitt gave evidence that the residence would have commanded a rent of between $200-250 per week. 82It is apparent from the letter dated 17 May 2010 from the plaintiff to the defendant that the plaintiff allowed the defendant to stay to 31 May 2010 and did not regard him as a trespasser during that period. Nor did it seek any occupation fee of him during that period. In these circumstances the plaintiff in my opinion is entitled to recover mesne profits from 31 May 2010 to the date of this judgment calculated at $200 per week being the weekly amount offered by the plaintiff in its letter to the defendant dated 7 July 2010, ie $26,000.

Orders 83The Court makes the following orders:

Judgment for the plaintiff for possession of the land comprised in: (a) Lot 32 in Deposited Plan 754950, Folio 32/754950; (b) Lot 41 in Deposited Plan 754950, Folio 41/754950; (c) Lot 2 in Deposited Plan 219923, Folio 2/219923; (d) Lot 3 in Deposited Plan 219923, Folio 3/219923; and (e) Lot 23 in Deposited Plan 754929, Folio 23/754929 being the land known as "Stratford", Wean Road, Gunnedah, NSW.
Grant leave to the plaintiff to issue a writ of possession in respect of the said land noting the plaintiff does not seek to disturb the Gardner Partnership's occupation of the land in any way.
Stay execution of the writ of possession until 18 January 2013.
Judgment for the plaintiff in the sum of $26,000.
The defendant to pay the plaintiff's costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 December 2012

At a glance

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Judgment (18 paragraphs)

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Cases Cited (3)