Hooker Corporation Limited v the Commonwealth of Australia [1986] ACTSC 10 (28 February 1986)

SUPREME COURT OF THE ACT

HOOKER CORPORATION LIMITED v. THE COMMONWEALTH OF AUSTRALIA
S.C. No. 701 of 1984
Pleading

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Kelly J.(1)

CATCHWORDS

Pleading - Application to amend statement of claim - Implied term alleged - How to be pleaded - Estoppel by representation - Whether may be pleaded in statement of claim - Elements of estoppel to be pleaded.

Upton v. Chipman (1892) 13 ALT 239.

Burton v. Karbowski (1914) 14 SR (N.S.W.) 373.

Seton, Laing, & Co. v. Lafone (1887) 19 QBD 68.

Low v. Bouverie (1891) 3 Ch 82.

Re Ottos Kopje Diamond Mines, Ltd. (1893) 1 Ch 618.

Spencer Bower & Turner, Estoppel by Representation, 3rd edn. (1977), pp 4, 7, 117.

HEARING

CANBERRA
28:2:1986

ORDER

THE COURT ORDERS THAT the application for amendment of the statement of claim made by notice of motion dated 6 February 1986 be dismissed.

DECISION

This is an application that the plaintiff have leave to amend its statement of claim. I note that on 15 February 1985 leave was given to amend the statement of claim issued with the writ. The amendment appears not to have been made so that by 0.32, r.7 of the Rules of Court the order to amend has become ipso facto void.

2. The case the plaintiff seeks to make is discussed in Hooker Corporation Limited v. The Commonwealth of Australia (1985) 61 ACTR 37, where I dealt with an earlier interlocutory application in this matter. So far as is necessary and appropriate what I said there may be taken to be incorporated in these reasons.

3. I set out the substance of the proposed amendment:-

"5. The plaintiff alleges and the fact is

that for many years since the introduction of
the Building Ordinance 1972 the Commonwealth
has by administrative usage, custom,
procedure and practice granted approval to
lessees to make structural alterations to
buildings erected on land the subject of a
crown lease granted under the City (Area)
Leases Ordinance 1936 pursuant to the terms
of such leases in the following manner:-

(a) By permitting or requiring the lessee or
his agent to submit a set of building
plans in respect of such alterations to
the Building Controller for approval at
his office situated in North Building,
Civic, such office being within an area
occupied by the defendant.

(b) By the building plans being approved by
the Building Controller such approval
being signified by the plans being
stamped in or to the following effect:-

'Building work shall be constructed
in accordance with the approved plans
the Building Manual (A.C.T.), the
notations made on the plans and any
matters specified on the building
permit. The approval of plans or the
grant of a building permit does not
affect the operation of any other law
in the Territory, nor does it
authorise the use of the land
contrary to a provision, covenant or
condition of lease. Modifications if
applicable.'

and by the stamp of approval being
signed by the Building Controller or his
deputy.

(c) By the building plans being returned to
the lessee with the said approvals
marked thereon.

(d) By the issue of a building permit
pursuant to the Building Ordinance 1972
granting authorisation for the nominated
builder to proceed with the building
work in accordance with the approved
plans.

6. The plaintiff alleges and the fact is
that at all material times since the
introduction of the Building Ordinance 1972,
crown lessees upon return of plans duly
stamped with approvals as aforesaid and upon
the issue of a building permit have relied on
such plans and the said approvals thereon and
the issue of the said building permit as
constituting all necessary approvals,
including approval under the crown lease, to
permit the crown lessee to make structural
alterations to buildings erected on the said
land.

7. The plaintiff alleges and the fact is
that the return of the building plans
approved as aforesaid and the issue of the
said building permit has at all material
times been accepted by the Commonwealth as
meeting all requirements of the Commonwealth
under the Building Ordinance 1972 and the
crown lease for approvals to make structural
alterations to buildings erected on land.

8. Otherwise than by the usage, custom
procedure and practice set out above, the
Commonwealth has not, at any material time,
required crown lessees to make any further or
other application or request for approval to
make structural alterations to buildings
erected on land in or to the effect of the
terms of clause 1(c) of the crown lease of
that land.

9. In accordance with the usage, custom,
procedure and practice referred to above, the
plaintiff on or about 13 October 1983 by its
servant or agent caused plans for structural
alterations to the building erected on Block
8 Section 35 Division of City to be lodged
for approval.

10. On or about 6 December 1983 the
defendant, by its servant or agent the
Building Controller or his deputy, gave
approval to the plans and specifications, as
lodged, by endorsing the plans to the effect
set out in paragraph 5.

11. On 11 January 1984 the defendant by its
servant or agent the Building Controller or
his deputy issued a building permit for the
building work proposed in the said plans and
specifications in the following terms:-

'. . .

The building work shall be carried out
in accordance with the approved plans,
the Building Manual A.C.T., the
notations made on the plans and subject
to the provisions of the Building
Ordinance 1972. The approval of plans
or the grant of a building permit does
not affect the operation of any other
law in the Territory nor does it
authorise the use of the land contrary
to a provision, covenant or condition of
the Crown Lease.

. . .'

12. Upon return of the plans duly endorsed as
aforesaid and the issue of the building
permit, the plaintiff, in reliance upon those
approved plans and building permit as
constituting all necessary approvals
including approval under the crown lease
commenced to make structural alterations to
the buildings on the said Block 8 Section 35
Division of City and incurred cost and
expense in so doing.

13. It is alleged and the fact is that such
an approval to the building plans and issue
of a building permit constituted inter alia
an approval by the defendant or the Minister
on behalf of the defendant pursuant to clause
1(c) of the said crown lease."

4. The plaintiff's claim in the draft amended statement of claim is for:-

"(1) A declaration that the defendant by
itself or by the Minister for
Territories on behalf of the defendant
has given approval to the plaintiff to
make structural alterations to the
building erected on the land in
accordance with Clause 1(c) of the Crown
Lease.

(2) Further and in the alternative a
declaration that the defendant cannot
lawfully require the plaintiff to pay a
sum of money to the defendant as a
condition precedent to the defendant
granting approval to the plaintiff to
make structural alterations to the
building erected on the land.

(3) A declaration that the plaintiff is not
and has not at any time been in breach
of clause 1(c) of the crown lease.

(4) Costs."

5. The defendant opposes the application on two grounds. The first is that the statement of claim in the form proposed discloses no cause of action. The second is that in the exercise of the Court's discretion the application for amendment should be refused. I will deal with the second ground first.

6. By deed bearing date 21 August 1984 made by the parties it was agreed, inter alia, that the plaintiff would forthwith commence proceedings in this Court to obtain a determination as to the power of the defendant in the circumstances recited in the deed to require payment of a betterment charge or of any other sum of money. The plaintiff further agreed to take all reasonable steps to have the matter heard and determined as quickly as possible and the defendant agreed to cooperate for that purpose. The defendant now says that the plaintiff has failed to abide by that agreement and that accordingly the Court's discretion should be exercised against it.

7. The plaintiff had, however, issued its writ with statement of claim annexed on 31 July 1984. An appearance was entered to the writ on 13 August 1984 and a defence delivered on 24 August 1984. On 23 November 1984 the defendant delivered interrogatories to the plaintiff and on the same day filed its affidavit of discovery. On 13 December 1984 the plaintiff applied by notice of motion for further discovery. On 25 January 1985 an amended defence and counter-claim were delivered. On 1 February 1985 the plaintiff answered the defendant's interrogatories. On 15 February 1985 the motion for further discovery was argued and leave given to amend the statement of claim. On 26 February 1985 judgment dismissing the motion was handed down. By letter dated 8 May 1985 the plaintiff sought the defendant's consent to the delivery of the draft amended statement of claim which I am now considering. By letter dated 27 November 1985 the defendant refused the plaintiff's request for consent to its delivery and asked that any necessary application for leave to amend should be filed within the next two weeks so that it might be dealt with before the Court vacation. The notice of motion seeking leave to amend the statement of claim was filed on 6 February 1986.

8. Having regard to the matters raised in the judgment of 26 February 1985, I can well understand that the plaintiff should seek counsel's advice as to what it should do and that some appreciable time would be taken before that advice became available. In any event it does not seem to me that the period between 26 February 1985 and 8 May 1985 was unduly long and there was no evidence before me of any complaint made by the defendant that the plaintiff was to that point acting in a dilatory way. The delay by the plaintiff is to be compared to the delay by the defendant in responding to the plaintiff's solicitors' letter of 8 May 1985. Making every allowance for the difficulties which may have faced the defendant on receipt of the draft and having due regard to the solemn obligations which the parties entered into by their deed, I do not think that the defendant has made out a case arising out of the deed which would warrant the exercise of the Court's discretion against the plaintiff.

9. Counsel for the plaintiff submitted, as I understood him, that the proposed statement of claim disclosed a cause of action in two ways. The first was that it pleaded an implied term in the contract between the plaintiff and the defendant evidenced by the Crown Lease that the previous approval in writing of the Commonwealth or of the Minister on behalf of the Commonwealth referred to in clause 1(c) of the Crown Lease should be evidenced by the action of the Building Controller or his deputy authorised in that behalf in approving building plans and issuing a building permit in respect of a building to be erected upon or structural alteration to a building already erected upon land the subject of the Crown Lease. The second was that the defendant was estopped by its conduct more particularly described in the statement of claim from alleging that the previous approval in writing required by clause 1(c) of the Crown Lease had not been granted.

10. It is not suggested that the implied term is required to give efficacy to the contract evidenced by the Crown Lease and so the doctrine in The Moorcock (1889) 14 P.D.64 is not applicable. Nor is it so obvious a term that it is left to be implied and need not be expressed. The "officious bystander" has no part to play. Shirlaw v. Southern Foundries (1926) Ltd. (1939) 2 KB 206 at p 227 per MacKinnon LJ. Nor can the alleged term be said to be implied in the face of the rule of evidence that where a contract is reduced into writing and appears in the writing to be entire it is presumed that the writing contains all its terms. Mercantile Bank of Sydney v. Taylor (1891) 12 LR (NSW) 252 at p 262 per Long Innes J.

11. In my opinion the facts as pleaded do not give rise to the necessary implication contended for by the plaintiff. If such a term is to be implied in the contract the allegation of the implied term ought to be directly pleaded or sufficient circumstances should be set out to show of necessity an allegation that such an implied term formed part of that contract. See Upton v. Chipman (1892) 13 ALT 239 and Burton v. Karbowski (1914) 14 SR (NSW) 373. I think therefore that the plaintiff's first contention fails and to the extent that the plaintiff relies upon the alleged implied term the statement of claim proposed is defective.

12. I turn to the second basis of the plaintiff's claim, that is that the facts pleaded raise an estoppel against the defendant.

13. Estoppel by representation forms part of the law of evidence and, except as a bar to testimony, has no operation or efficacy whatever. Spencer Bower & Turner, Estoppel by Representation, 3rd edn. (1977) at p 7.

"An estoppel does not in itself give a cause
of action; it prevents a person from denying
a state of facts:"

Seton, Laing, & Co. v. Lafone (1887) 19 QBD 68 at p 70 per Lord Esher M.R.

". . . estoppel is not a cause of action - it
is a rule of evidence which precludes a
person from denying the truth of some
statement previously made by himself"

Low v. Bouverie (1891) 3 Ch 82, at p 101 per Lindley L.J.

"No cause of action arises upon an estoppel
itself. The court must look for the cause of
action elsewhere . . ."

In re Ottos Kopje Diamond Mines, Ltd. (1893) 1 Ch 618, at p 628 per Bowen LJ.

14. One would expect, therefore, to find estoppel pleaded in a defence or in a reply in response to a counter claim. See, for example, Bullen & Leake, Precedents of Pleading, 2nd edn. 1863, at pp 387, 392 & 393.

15. In Spicers & Detmold Ltd. v. Australian Automatic Cigarette Paper Company Pty. Ltd. (1942) VLR 97, Mann CJ held that a plea of estoppel ought not to appear in a statement of claim. However, I would not on that count alone in this case refuse leave to amend the statement of claim since the parties are well aware, having regard to the history of the matter, of the nature of the plaintiff's claim.

16. However, estoppel, if pleaded, ought to be pleaded with particularity. It is said in Stephen on Pleading, 7th edn. 1866, at p.293 that a pleading in estoppel -

"must be certain in every particular; (i.e.)
. . . that they must meet and remove by
anticipation every possible answer of the
adversary."

Nowadays one takes that to mean no more than that all the facts necessary to found the estoppel pleaded ought to be pleaded. On this latter basis the proposed amendment to the statement of claim seems to me to be defective in three respects.

17. The estoppel sought to be pleaded must necessarily be in respect of a representation to the public or to a large class of it within the Australian Capital Territory. In Spencer Bower & Turner, op.cit., at p.117, it is said that -

". . . anyone, though not capable of raising an
estoppel against himself in favour of the
public, or a class, in its entirety, can
address a representation to such public, or
class, which, if and when, but not unless and
until, acted upon to his prejudice by any
member of such body of undesignated persons,
may operate as an estoppel against himself in
favour of that individual."

If, therefore, such a representation as the plaintiff seeks to plead was in fact made to the members of the public or to a class of which it was a member, an estoppel may have arisen if the plaintiff acted to his prejudice as a result of the representation.

18. In Maclaine v. Gatty (1921) 1 AC 376 at p 386, Lord Birkenhead LC said:-

"Where A has by his words or conduct
justified B in believing that a certain state
of facts exists, and B has acted upon such
belief to his prejudice, A is not permitted
to affirm against B that a different state of
facts existed at the same time."

At p.4 of Spencer Bower & Turner's work, op.cit., it is said in a passage adopted as accurate by Sir Raymond Evershed MR in Hopgood v. Brown (1951) All ER 550 at p 559,

". . . where one person ('the representor') has
made a representation to another person ('the
representee') in words or by acts or conduct,
or (being under a duty to the representee to
speak or act) by silence or inaction, with
the intention (actual or presumptive), and
with the result, of inducing the representee
on the faith of such representation to alter
his position to his detriment, the
representor, in any litigation which may
afterwards take place between him and the
representee, is estopped, as against the
representee, from making, or attempting to
establish by evidence, any averment
substantially at variance with his former
representation, if the representee at the
proper time, and in the proper manner,
objects thereto."

19. In my opinion, it follows that a representation must be made to the representee by the person against whom the estoppel is set up. Unless it comes to his attention in some appropriate way there can be no representation. It follows, too, that it is essential that the representee -

(a) rely on the representation, and

(b) on the faith of it alter his position to his
detriment.

20. I do not think that the plaintiff has pleaded that the representation came to its attention nor do I think that it has pleaded reliance on any true representation, alleging merely in paragraph 12 of the draft that it relied on the approved plans and building permit. These were not the critical representation for they could only have the effect claimed because of it. Finally I do not think that the plaintiff alleged that it acted to its detriment in reliance upon the representation. It says merely that in reliance upon the approved plans and building permit as constituting all necessary approvals it incurred costs and expense in commencing to make structural alterations to the buildings on the land in question. These costs and expenses it may have incurred in any event.

21. As matters of particularity, the plaintiff ought to plead these three things.

22. The statement of claim proposed is defective. Leave to amend it is refused.