William Hollier & Anor v The Australian Maritime Safety Authority [1998] FCA 176 (6 March 1998)

Last Updated: 10 March 1998

FEDERAL COURT OF AUSTRALIA

REAL PROPERTY - Acquisition of title - Proprietary estoppel - Equity of acquiescence - Twelve months lease of island - Negotiations for continued occupation upon expiration of lease - Whether owner encouraged lessee to believe he had or would obtain permanent occupancy - Constructive trust - Whether unconscionable for owner to insist on legal rights.

ESTOPPEL - Proprietary estoppel - Twelve months lease of island - Negotiations for continued occupation upon expiration of lease - Whether owner encouraged lessee to believe he had or would obtain permanent occupancy.

Dillwyn v Llewelyn [1862] EngR 908; (1862) 4 De G F & J 517 applied

Ramsden v Dyson (1866) LR 1 HL 129 applied

Plimmer v Wellington Corporation (1884) 9 App Cas 699 applied

Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387 considered

Raffaele v Raffaele [1962] WAR 238 mentioned

Ward v Kirkland [1967] Ch 194 mentioned

Inwards v Baker [1965] 2 QB 29 mentioned

Attorney-General v Baliol College, Oxford (1744) 9 Mod 407 mentioned

Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 applied

Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137 applied

WILLIAM HOLLIER, THE ENGEN INSTITUTE (ARBN: A25398A) v THE AUSTRALIAN MARITIME SAFETY AUTHORITY, THE STATE OF TASMANIA and THE MINISTER FOR WORKPLACE RELATIONS

VG 667 OF 1997

SUNDBERG J

6 MARCH 1998

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 667 of 1997

BETWEEN:	william hollier First Applicant the engen institute (arbn: a25398a) Second Applicant
AND:	the australian maritime safety authority First Respondent the state of tasmania Second Respondent the minister for workplace relations Third Respondent

JUDGE:	SUNDBERG J
DATE OF ORDER:	6 MARCH 1998
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

. The application be dismissed.

. The applicants pay the respondents' taxed costs of the application.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 667 of 1997

BETWEEN:	william hollier First Applicant the engen institute (arbn: a25398a) Second Applicant
AND:	the australian maritime safety authority First Respondent the state of tasmania Second Respondent the minister for workplace relations Third Respondent

JUDGE:	SUNDBERG J
DATE:	6 MARCH 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

DEAL ISLAND

Deal Island ("the Island") is part of the Kent Group of Islands in Bass Strait. It lies about half way between Wilson's Promontory in Victoria and Flinders Island. Descriptions of the Island do not paint it as an enticing destination. In 1798 Matthew Flinders described it as "having an extreme degree of sterility" and "shunned by almost every kind of animated being". In 1848 a lighthouse and associated buildings were completed on the Island as a joint project by Victoria, New South Wales and Tasmania. The lighthouse was manned until March 1992 when it was shut down. The Island was owned by the Commonwealth until October 1991, when it was transferred to the first respondent ("AMSA"). AMSA was established by the Australian Maritime Safety Authority Act 1996 (Cth). Its functions include combating pollution in the marine environment, providing a search and rescue service, and providing services to the maritime industry on a commercial basis. AMSA proposes to transfer the Island to the State of Tasmania, the second respondent. The principal question in the case is whether the applicants have or either of them has acquired against AMSA a right of occupancy over the Island which will bind the State upon transfer.

MR HOLLIER AND ENGEN

I will call the first applicant "Mr Hollier" and the second applicant "Engen". Mr Hollier is a physicist with expertise in systems theory especially as applied to total systems design and causally-closed systems design. Engen is the trustee of the Engen Trust, a perpetual trust for research and education, which was established by Mr Hollier in 1992.

THE FACTS

(a) May 1989 to January 1992

On 31 May 1989 Mr Hollier wrote to the Commonwealth Department of Transport and Communications expressing interest in obtaining a long-term lease of the Island with a view to operating a stone masonry business there. On 13 June the Department wrote to Mr Hollier informing him that it was not in a position to initiate or recommend arrangements for the leasing of property on the Island. Any such arrangements were the responsibility of the Department of Administrative Services which handled all Federal Government property disposal and leasing. On 24 July 1991 Engen wrote to AMSA confirming its interest in the purchase or lease of the Island when it became available as a consequence of the decommissioning of the light station. On 18 October, shortly after the Island had been transferred to AMSA, Mr Hollier wrote to Mr Banks, AMSA's Southern Regional Manager, asking AMSA to accept Engen's offer for the purchase or lease of the Island, preferably the purchase. By letter to AMSA of 31 January 1992 Engen offered to purchase the Island for $800,000.

(b) Meetings with AMSA between February and June 1992

Mr Hollier claims to have met with AMSA officers, principally Mr Banks and Mr Oxley on dates in February, March and June 1992 at which he was told that

* there can "only be one outcome", and that although the Island would remain in government ownership, provided Mr Hollier satisfactorily fulfilled a number of conditions during a twelve month trial period, he would obtain permanent and exclusive occupancy rights to the Island and could establish a research institute there

* he was the selected tenderer for a twelve month trial period of occupancy and this would lead to the next stage of a permanent occupancy

* if Mr Hollier established a track record, his right of occupancy would have priority over government associated research organisations

* if Mr Hollier satisfied AMSA's requirements he would have permanent occupancy to provide the same "sea-safety" presence as a lighthouse keeper with the same rights as a lighthouse keeper, together with the right to use the Island for research and non-commercial activities

* AMSA would make every effort to conclude the process within twelve months or soon thereafter, and would act in good faith.

Mr Banks agrees that he met Mr Hollier four times between February and June, and Mr Oxley agrees that he met Mr Hollier twice between those dates. Both deny informing Mr Hollier that he or Engen would obtain any permanent, long-term or indefinite right to occupy the Island, that the lease was a trial to gauge whether Mr Hollier could satisfactorily occupy and maintain the Island, that if he passed the test he would obtain a right to permanent and exclusive occupancy of the Island for a research institute, or that the lease would lead to a further stage of permanent occupancy.

Mr Banks' evidence was that in 1991 AMSA concluded that certain lighthouse sites, including the one on the Island, no longer required a manned presence for navigational safety, and decided to dispose of them. Its policy was to offer the Island for sale or transfer to Tasmania. If Tasmania did not want it, the Island would be offered to relevant local government authorities for sale or transfer. If those authorities did not want it, the Island would be offered to the public for sale or long-term lease by tender. Throughout the negotiations for the transfer of the Island Mr Banks expected that Tasmania would accept the transfer. At no time did he believe that the Island would be made available to the public for sale or long-term lease. When tenders for short-term occupancy were sought in April 1992, Mr Banks believed that negotiations for the sale to Tasmania would be finalised within about twelve months. Mr Banks said that in his meetings with Mr Hollier he made clear AMSA's policy, and told him that he doubted whether the Island would be made available to the public because he believed it would be transferred to Tasmania. Mr Oxley's evidence was to the same effect as Mr Banks'.

(c) Other events between April and July 1992

By letter dated 10 April 1992 Mr Banks invited Mr Hollier to tender for a twelve month lease of the Island together with all buildings and improvements thereon. The letter stated that the "successful tenderer will have the opportunity to bid for long-term lease or ownership of the Island at a future date but will have no implied rights of preference by virtue of this lease agreement". On 23 April Engen tendered for a twelve month lease of the Island for use as a research institute. The letter stated that if the lease were granted "we [would] have no implied rights or preference by virtue of this lease agreement but will have the opportunity to bid for long-term lease or ownership of the Island at a future date". On 4 May AMSA informed Mr Hollier that his tender had not mentioned the payment of any rent. Engen responded on 5 May offering to pay $300 per week. On the same day Engen wrote to AMSA offering to carry out certain conservation, safety and security related work on the Island "as payment for the 12 month lease". On 3 June Mr Hollier was told his tender had been successful, and on 16 June Mr Hollier and AMSA executed a document headed "Acknowledgment of Agreement". By the document Mr Hollier acknowledged that he would occupy a residence on the Island for twelve months from 16 June at the annual rental of $1.00 in consideration of which he agreed, amongst other things, to keep a continuing manned presence on the Island for the duration of the agreement and to carry out the maintenance specified in a schedule. Clause 8 of the agreement provided that "If the agreement should continue beyond twelve months AMSA may review the rental at the end of that period and agreement shall be on a monthly basis thereafter".

(d) The year of the lease

On 19 June 1992 AMSA's Board adopted a long-term strategy for the disposal of surplus land, including the Island. The land would be offered to the relevant State, and then to the relevant local government body. If neither was interested, AMSA would consider whether the property would be offered to the general public as a commercial disposal. On 25 November Engen wrote to the Tasmanian Department of Parks, Wildlife and Heritage ("Tasmania Parks") to confirm its ongoing interest in the Island as a research institute. The letter stated that the twelve month lease allowed Engen to demonstrate its ability to provide a permanent manned presence, and to satisfy itself as to the suitability of the Island as a site for further research. Engen proposed to establish a conservation trust to manage the Island. According to the letter Engen was pleased to have discovered, as the result of a meeting with officers of Tasmania Parks, that a number of sites in Tasmania with conservation value were managed via long-term leases to conservation trusts, and that it was proposed to manage the Island in the same manner. On the assumption that the Island was transferred to Tasmania, Engen looked forward to having a long-term lease, and was "heartened to find that the conservation trust that we are proposing would be considered a suitable lessee". On 21 December Engen wrote to Australian National Parks and Wildlife referring to the "interim agreement with AMSA to be caretakers" of the Island, and stating that Tasmania Parks was "favourably disposed to further consider as an appropriate management mechanism a long-term lease to a Conservation and Research Trust", and that Engen had been invited to "suggest for their further consideration detailed aspects of a lease and the establishment and operation of the trust".

The twelve month term expired on 15 June 1993. Mr Hollier remained on the Island as a monthly tenant pursuant to clause 8 of the lease. On 21 July AMSA wrote to Mr Hollier agreeing to his request that the "term of notice of termination" be varied from one month to three months.

(e) December 1993 to May 1996

On 23 December 1993 Mr Hollier wrote to Tasmania Parks saying that in accordance with advice from AMSA and Tasmania Parks that conservation areas in Tasmania had previously been managed via long-term leases to conservation trusts, he had established a trust called The Lighthouse Trust. On 15 April 1994 Mr Hollier wrote again to Tasmania Parks stating that The Lighthouse Trust was prepared to manage the light station "under a long-term lease and management plan bearing all costs for the long-term maintenance of the property". Mr Hollier said he anticipated that the sale of the light station would be completed by 30 June, "when the new owner could notify us that we can continue the caretaking and occupancy of Deal Island Lightstation pending completion of longer term arrangements". He enclosed draft appendices to a long-term lease. In an appendix dealing with the occupancy agreement, Mr Hollier described the agreement as "for an indefinite term but to be vacated on three months notice". He said it was his understanding that the agreement was an "interim arrangement", and that the twelve months occupancy would allow him to confirm that the site and facilities were appropriate for research. He recorded his understanding that whilst it was beyond AMSA's power to guarantee his continued occupancy, he would "have the option of continuing occupancy and use of the facilities under one arrangement or another". It was his belief that the most likely outcome of AMSA's transfer proposals was that the Island would be a Commonwealth or State conservation property, and that as a manned presence was required and a full-time ranger was not justified, he would be offered a long-term lease.

In another letter to Tasmania Parks on 30 November Mr Hollier said that Engen, as trustee of The Lighthouse Trust, was willing to accept the ongoing maintenance and insurance costs of the station in return for a long-term lease of the buildings on the Island. The letter acknowledged that AMSA had "previously advised us that they could not enter into a long term lease as this would encumber the sale of Deal Island". He went on to ask Tasmania Parks to write to AMSA stating that Tasmania Parks had no objection to AMSA entering into a long-term lease with the Trust.

On 30 April 1995 Engen wrote to Neil O'Keefe MP, Parliamentary Secretary Transport, asking him to recommend to the Australian Nature Conservation Agency that Engen be the preferred long-term lessee of the light station. Amongst other things the letter stated that AMSA had said it would do all it could, within its province, to assist Engen in finalising a long-term lease. On 28 May Mr O'Keefe announced that AMSA would shortly transfer about 100 surplus lighthouses to the States. On the next day AMSA wrote to Mr Hollier enclosing a copy of the announcement, and informing him that the Island was to be transferred to Tasmania. The letter gave him three months notice of termination of the tenancy. The letter went on to say that if Mr Hollier were able to come to some arrangement with Tasmania Parks (Mr Bosworth) for his continued occupancy of the premises, AMSA would not require the premises to be vacated "on production of a copy of correspondence from them agreeing to your continued occupation no later than 10 days prior to the termination date".

On 17 July Mr Bosworth of Tasmania Parks wrote to Mr Hollier informing him that Tasmania Parks was happy for him to remain a tenant of the light station on a monthly basis following any transfer of the Island to Tasmania. On 26 July AMSA wrote to Mr Hollier acknowledging receipt of advice from Mr Bosworth that agreement had been reached for Mr Hollier to remain on the Island on this basis. AMSA said that as a result of the agreement Mr Hollier could continue on the Island pending transfer on a monthly basis subject to his presentation, within seven days, of a waste disposal plan which he was required by the lease to provide. If this condition were not complied with, the previously advised termination date (29 August) would be effective. No plan was produced as required, and AMSA informed Mr Hollier that his monthly tenancy would be "seriously jeopardised" if he did not present a plan. Correspondence was exchanged relating to a waste disposal plan. In one of the letters Mr Hollier said he had offered to maintain the historic stone buildings on the Island in return for a ninety-nine year lease. In reply AMSA said that any such lease would be dependent on the wishes of Tasmania as the prospective owner. In another letter to Mr Hollier AMSA said it was prepared "to stall the termination of your occupancy agreement for a short while", but that a satisfactory waste plan must be concluded soon.

By letter of 30 August Mr Bosworth wrote to AMSA in response to a query raised in an AMSA letter which is not in evidence. Mr Bosworth confirmed that neither Tasmania Parks nor, so far as he knew, the Tasmanian government, had ever requested Engen to bear the cost of providing a manned presence at the Island, to operate and maintain the facility, or to bear the cost of restoring buildings in return for a long-term lease. Mr Bosworth said "we could never have offered such an arrangement as we do not own the property". He concluded by saying that Tasmania Parks had agreed that Mr Hollier could continue on the Island on a monthly tenancy basis following transfer, pending resolution of the future management of the Island.

On 8 May 1996 Mr Hollier wrote to the Minister for Transport stating, amongst other things, that the twelve months lease was a temporary measure "in the expectation that a permanent long-term agreement would be established within twelve months", and that he and his family had made a significant commitment in both career and family life to provide a continuous presence on the Island "on advice from AMSA ... that a secure and permanent situation would result".

(f) October to December 1997

By letter of 24 October 1997 AMSA advised Mr Hollier that the Island would be transferred to Tasmania on 1 December, and gave him thirty days notice of termination under clause 8 of the lease. On 27 October AMSA offered to meet the cost of a barge to transport Mr Hollier's goods and chattels to the mainland in the last week in November. On 3 November Mr Hollier complained that he was entitled to ninety days notice as a result of the variation made in July 1993. On 28 November Mr Hollier and Engen commenced the present proceeding. On 12 December AMSA served on Mr Hollier a ninety day notice to quit effective on or about 12 March 1998.

THE PROCEEDING

In their Application Mr Hollier and Engen claim an interest in the Island on four alternative bases:

. A proprietary interest based on proprietary estoppel, in that between 1990 and 1997 AMSA and Tasmania requested or allowed them to expend money and otherwise act to their detriment under an expectation created or encouraged by AMSA and Tasmania that the applicants would be permitted to stay on the Island.

. An equitable proprietary interest in the Island under a constructive trust, in that it was the parties' common intention that the applicants would acquire an interest in the Island, on the basis of which the applicants acted to their detriment, so that it would be a fraud to defeat their expectation.

. A specifically enforceable contract with AMSA pursuant to which the applicants are entitled to permanent, or indefinite, or a reasonable period of occupancy of the Island for the purpose of conducting scientific research.

. A remedy on the ground that the applicants acted to their detriment on the basis of a mistaken belief or assumption that AMSA would enter into a formal and binding agreement conferring on them a right to permanent occupancy of the Island, in circumstances where AMSA was aware of the existence of the mistaken belief or assumption and of what the applicants were doing on the basis of the mistaken belief or assumption.

The applicants also claim damages said to have been suffered as a result of untrue representations made by AMSA and Tasmania that if the applicants fulfilled certain conditions they would be granted permanent occupancy of the Island. No relief is sought against the third respondent. Mr Hollier and Engen have commenced another proceeding against the third respondent which raises similar issues to those in question in the present case. By consent the third respondent was joined as a party to the present case so that any relevant findings of fact would bind him in the other case.

THE CASE AGAINST AMSA

(1) Proprietary estoppel

If the owner of land requests or allows another to incur expenditure or otherwise prejudice himself under an expectation created or encouraged by the owner that he will obtain an interest in the land, that raises an equity in the other which will be satisfied in whatever is the most appropriate way. The best known of the cases illustrating this proposition are Dillwyn v Llewelyn [1862] EngR 908; (1862) 4 De G F & J 517, Ramsden v Dyson (1866) LR 1 HL 129 and Plimmer v Wellington Corporation (1884) 9 App Cas 699. The nature of proprietary estoppel, and its relationship with other estoppels, was examined by the High Court in Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387 at 403-404 per Mason CJ and Wilson J and at 416-417 and 419-420 per Brennan J. There are three conditions which a claimant must satisfy. The first is that he believed that he would obtain an interest in the land. The second is that that belief must have been encouraged by the owner, either actively or passively. The third is that the claimant must have acted in reliance on the encouragement, so that were the owner to insist on his strict legal rights, the claimant would suffer detriment. The extent of the equity is to have made good the expectation which the owner has encouraged. If the equity is established, effect is given to it in whatever is the most appropriate way: Waltons Stores at 419. Sometimes it will be sufficient to dismiss the owner's action to enforce his legal rights. In other cases the owner may be restrained from asserting his rights. The claimant's reward may be a lien on the property for his expenditure or for the value of any improvements: Raffaele v Raffaele [1962] WAR 238. In some cases the appropriate remedy is the grant of the interest the claimant believed he would obtain, such as a perpetual easement or a licence to use the land as his home for as long as he desires. See, for example, Ward v Kirkland [1967] Ch 194 and Inwards v Baker [1965] 2 QB 29. Or it may appear that the claimant has already had sufficient satisfaction for his expenditure, and so is entitled to no relief: Attorney-General v Baliol College, Oxford (1744) 9 Mod 407 at 412. The range of relief that may be granted is expounded in Snell's Equity 29th ed (1990) 577-578. See also Waltons Stores at 419.

The applicants contend that they believed that provided they satisfied certain conditions during the twelve month period of the lease they would obtain permanent occupancy rights to the Island. On their account that belief was engendered by representations to that effect made by Mr Banks and Mr Oxley at meetings in early 1992. In reliance on these representations the applicants incurred expenditure in moving to the Island and establishing a presence there. They will suffer detriment if AMSA is allowed to assert its rights under the holding over clause. Mr Banks and Mr Oxley deny having made the representations alleged. They were cross-examined by Mr Hollier, but not on this point. However, I attach no importance to this omission since Mr Hollier is not a lawyer, and was unrepresented. There are several factors that have led me to prefer the accounts given by Mr Banks and Mr Oxley.

(a) The "early 1992" meetings at which Mr Hollier says the representations were made will have been those he said took place on 6 February and 30 March. Mr Banks' letter to Mr Hollier of 10 April, inviting Mr Hollier to tender for a twelve month lease, said that the successful tenderer would have the opportunity to bid for a long-term lease or ownership of the Island at a future date, but would have no "implied rights of preference" by virtue of the lease. That is quite inconsistent with Mr Banks, at a meeting only ten days earlier, having said that Mr Hollier would obtain permanent occupancy if his twelve month occupancy was satisfactory to AMSA. Mr Banks' statement that there would be "no implied rights of preference" by virtue of the lease cried out for challenge if he or Mr Oxley had made the representations alleged. Mr Hollier's response of 23 April does not refute Mr Banks' statement. Instead it recites Mr Banks' formulation - "were we granted a 12 month lease ... we have no implied rights or preference by virtue of this lease agreement but will have the opportunity to bid for long-term lease or ownership of the Island at a future date".

(b) Towards the end of 1992, by which time Mr Hollier had become aware that the Island would probably be transferred to Tasmania, he began negotiations with Tasmania Parks about obtaining long-term occupancy rights. That itself casts doubt on his claim that AMSA had already promised him long-term occupancy. It is however entirely consistent with an awareness on Mr Hollier's part that, because it was intending to dispose of the Island, AMSA did not wish to encumber it, so that any long-term occupancy would have to be negotiated with Tasmania. Further, in his extended and detailed negotiations with Tasmania Parks he did not once assert that he had anything other than a twelve month lease from AMSA. In his letter of 25 November he said he had a twelve month lease "pending a decision on the long-term future of the Island", that the twelve month term would enable the applicants to satisfy themselves as to the suitability of the Island as a site for further research, and that because of the long-term nature of the research they would like a long-term lease from the State. If AMSA had already promised Mr Hollier permanent occupancy rights if he performed satisfactorily during the term of the lease, it is highly unlikely that he would have written as he did to Tasmania Parks.

(c) The twelve month term expired on 16 June 1993. Some time after this Mr Hollier sought an extension of the period of notice from thirty days to ninety days, which was granted. The whole notion of vacating the Island, whether on thirty or ninety days notice, is inconsistent with a belief based on AMSA's alleged representations that Mr Hollier had been promised permanent occupancy.

(d) At all material times AMSA intended to transfer the land to Tasmania or some other entity, and did not want to commit itself to a long-term occupancy as this would encumber the title and make the Island less attractive to a purchaser or transferee. In those circumstances it is improbable that AMSA would in fact encumber the title by representing to Mr Hollier that he would have long-term occupancy rights.

(e) Mr Hollier was aware that AMSA was not in a position to commit itself to long-term occupancy. In his letter to Tasmania Parks of 30 November 1994 he said that AMSA had told him it could not enter into a long-term lease as this would encumber the sale of the Island. In a document headed "Summary of Events Relating to Agreement with AMSA" prepared by Mr Hollier in late 1995 or early 1996, he said that AMSA's "principal requirement by Cabinet was to realise an asset from the sale", and that although his occupancy of the Island reduced AMSA's costs and potentially those of a transferee government department, AMSA "would not guarantee occupancy in order to offer unencumbered sale". AMSA would, however, act in good faith to assist Mr Hollier wherever possible to obtain permanent occupancy. For instance, AMSA had introduced him to Tasmania Parks. Despite this knowledge of AMSA's position, on four occasions in the course of his cross-examination Mr Hollier expressly denied that he knew that AMSA was not in a position to encumber its title by a long-term occupancy. Given the conflict between Mr Hollier on the one hand and Mr Banks and Mr Oxley on the other as to whether the long-term occupancy representations were in fact made, Mr Hollier's awareness of AMSA's attitude to encumbering its title was an important matter. Mr Hollier's denial that he knew of AMSA's attitude, when his own correspondence disclosed that he did have this knowledge, detracts from the credibility of his evidence.

(f) On 29 May 1995 Mr Hollier received from AMSA notice of termination of the tenancy. It is true that the letter stated that AMSA would not require Mr Hollier to vacate if he were able to persuade Tasmania Parks to allow him to continue in occupation. Nevertheless one would have expected Mr Hollier to protest that he could not be required to vacate because he was on a promise to be allowed to stay on the Island as a permanent occupant. Mr Hollier made no protest.

(g) Mr Hollier took up the lifeline in AMSA's letter of 29 May 1995 and requested and obtained Tasmania Parks' agreement that he remain on the Island as a monthly tenant following the transfer to the State. This does not sit happily with a belief that Mr Hollier had an arrangement with AMSA for permanent occupancy of the Island.

(h) On 24 October 1997 Mr Hollier received a thirty day notice to quit. On 27 October the practical significance of this was underlined by a letter notifying him of arrangements for the transportation of his goods and chattels to the mainland. Instead of denying any obligation to vacate based on AMSA's promise of permanent occupancy, he merely complained that he was entitled to ninety days and not thirty days notice.

(i) Mr Hollier is a prolific correspondent. During the period in question he wrote numerous letters to AMSA and Tasmania Parks about the Island and his research plans. But there is not one that supports his version of events. At the outset of his cross-examination he agreed that it was his practice to confirm by letter any representations made to him by AMSA. He then changed his story by saying that he would not have sent such a letter as it would have drawn an adverse reaction from AMSA. That explanation is both unconvincing and damaging to his case that the representations were in fact made. The only letter which supports his case is that written to the Minister for Transport in May 1996 in which he referred to "advice from AMSA ... that a secure and permanent situation would result". What is striking, however, is the absence of any correspondence directed to those who, on his account, had given that advice.

(j) Mr Hollier made many overtures to AMSA and Tasmania Parks as to long-term occupancy of the Island. None of them was successful. But the fact that they were made in the way they were (ie without any assertion that he had been promised long-term occupancy anyway), throws doubt on his claim to that effect.

Mr Hollier was an unsatisfactory witness. This contributed to my preference for Mr Banks' and Mr Oxley's evidence over that of Mr Hollier. He was evasive in his answers to questions. He delivered long speeches instead of answering simple questions. When he could see where certain questions were leading, he would answer non-responsively. At times he would tell counsel that he knew where a line of questioning was leading. At other times he simply assumed that a question was a trap, and declined to answer it, responding instead with a speech about some other aspect of the case. Three examples will suffice. The first arose out of AMSA's letter giving Mr Hollier three months notice of termination. He was shown the letter, which he agreed caused him considerable concern. He was asked whether he had sent a letter to AMSA saying it had no right to give him notice because he had been promised long-term occupancy. The question was repeated several times because counsel was not satisfied with the responses, which were as follows:

"There was a whole heap of correspondence after this."

...

"Is there a particular letter you are referring to?"

...

"Are you saying that the only avenue I could take to protest this was inappropriate [was] via correspondence to Mr Northmore."

...

"I don't know."

...

"It could be 12 months later after this."

...

"Well, it didn't proceed."

...

"I was quite active in asserting that this was inappropriate and subsequently the government concurred with that and we were not required to vacate the property."

When it was pointed out to him that on the day he received the letter he didn't know the threat wouldn't be carried out, his response was "I don't have a crystal ball - do you?". He then said he thought he probably wrote several letters on the subject, and asked if he could consult his files. He was requested to do that over the adjournment and produce any letter on the subject. None was ever produced. Of course the answer to the question was that he had never sent such a letter. He knew that was the true answer, but refused to give it, resorting instead to the devices I have recorded.

The second example occurred when Mr Hollier was shown his letter to Tasmania Parks of 25 November 1992 in which he said he "would look towards having a long-term lease" on the assumption that the Island was transferred to Tasmania. It was put to him that the letter was written with a view to convincing Tasmania to give him a long-term lease in the event that Tasmania became the owner. The question was asked several times, and elicited the following responses:

"We'd entered into this arrangement whereby we were talking about occupancy and the occupancy had to be relating to the actual title and ownership of the land."

...

"If in fact that was the arrangement that was reached."

...

"What's the question?"

...

"The arrangements that had been established with AMSA created a situation where there was obligations to us."

...

"It wasn't my first choice that we'd go to Tasmania."

...

"Essentially I understood that it would all be determined, that there would be negotiation, there would be some agreement."

On this occasion the true answer to the question was "Yes", and Mr Hollier knew it. But there was no way he was going to give that answer, and his pitiful attempts to avoid giving it, or indeed any other responsive answer, showed him as a witness who was not prepared to be frank with the Court.

The third example related to the document headed "Summary of Events Relating to Agreement with AMSA", in which Mr Hollier had said that AMSA "would not guarantee occupancy in order to offer unencumbered sale". He was asked whether or not it was his understanding at the time that AMSA would not guarantee occupancy in order to be able to offer unencumbered sale. The question was repeated several times, and the responses were as follows:

"AMSA's principal requirement by Cabinet was to realise an asset value on the sale."

...

"Yes, because - no."

...

"Up to this point in time that AMSA would - can you repeat it again?"

...

"I was still believing this to be the case."

...

"It doesn't make much sense, the question, to me, but I think the answer to that is no."

...

They had basically told us that we would have occupancy. They had to put the other pieces of the agreement in place before ...."

...

"My understanding was that they had a constraint; they couldn't commit to deliver the documentation until all the pieces were in place."

...

"It never had been the case."

...

"I may well have pursued the matter much more vigorously had I not been erroneously informed about the constraints that AMSA were working under."

...

"I think I have explained the situation quite clearly."

Mr Hollier had an intimate knowledge of the detail of the correspondence in evidence. He knew that in several documents he had recorded AMSA's requirement of an unencumbered title, yet he was aware of the significance of this knowledge to the resolution of the conflict between his and Mr Banks' and Mr Oxley's evidence about the alleged representations. In view of the conflict between the "Summary" document and his earlier denials of any awareness of AMSA's attitude, he decided it was best to prevaricate, even though he knew the answer to the oft-repeated question was that he was aware that AMSA would not guarantee occupancy in order to offer an unencumbered title. It was another instance of his refusal to be frank with the Court on what was an important aspect of the case.

Mr Hollier is a man of considerable intelligence, and I am unable to accept that his frequent non-responsive answers were due to his failure to understand the questions. I do not think he was intentionally giving false evidence about his conversations with Mr Banks and Mr Oxley. He is an enthusiastic and hyperactive man, terribly wrapped up in, and almost consumed by, his activities on and connected with the Island. I have come to the conclusion that this enthusiasm led him over the course of time to view as a promise what had been held out to him as no more than an opportunity to bid for a long-term lease at a future date. I say "over the course of time", because he made no claim to an entitlement until long after it was appropriate, on his account, to have done so. The only evidence relied on by the applicants to support their claim that AMSA encouraged them to believe that they had or would obtain a right to occupy the land permanently is Mr Hollier's evidence that AMSA's officers made representations to that effect. Since I have concluded that the alleged representations were not made, any belief that Mr Hollier and thus Engen may have had was not encouraged by AMSA The claim based on proprietary estoppel fails.

(2) Constructive trust

The applicants assert a right of permanent occupancy arising out of a constructive trust based on the parties' common intention that the applicants would acquire that interest in the Island. It follows from my finding that AMSA's officers did not make the representations alleged by the applicants, that it was not AMSA's intention that the applicants would be given permanent occupancy of the Island. Looking at the matter more broadly than the way it is put in the pleadings, a constructive trust serves as a remedy which equity imposes regardless of actual or presumed agreement or intention, "to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle": Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 at 614. The "equitable principle" referred to is that equity will not permit a person to assert or retain the benefit of property if it would be unconscionable for him to do so: at 616, 620. See also Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137 at 148, 152. Since I have found that AMSA's officers did not represent to Mr Hollier that he would obtain a right of permanent occupancy, and there being no other evidence that they encouraged him to think that he would, it is not unconscionable for AMSA to assert its legal title to the Island and to rely on the terms of the lease.

(3) Mistake

Assuming that the applicants laboured under the mistaken belief that AMSA would confer on them a right of permanent occupancy, Mr Hollier's evidence about the representations, if accepted, might have established that AMSA was aware of the mistake. But I have rejected that evidence, and there is no other evidence that AMSA was aware of it. The basis of the grant of relief in cases of unilateral mistake is unconscionable conduct on the part of the other party. There is no such conduct here.

(4) Specifically enforceable contract

There is no evidence to support the claim that AMSA and the applicants entered into a specifically enforceable contract under which the applicants are entitled to "permanent, or indefinite, or a reasonable period of occupancy" of the Island.

(5) Damages

The claim for damages fails because the representations relied on were not made.

THE CASE AGAINST TASMANIA

Only three claims are made against Tasmania: proprietary estoppel, constructive trust and damages for false representations. The only evidence to support the claims is unsatisfactory. It is this passage from Mr Hollier's principal affidavit:

Mr Bosworth also stated that only if agreeing to a permanent, exclusive occupancy was a condition of transfer of title to Deal Island would such occupancy be secure. He also advised me that Tasmania would discharge any responsibility for having advised us that we would have secure occupancy by requiring the Commonwealth to settle the matter with us either by providing secure occupancy or payment for services.

The meaning of the first sentence is unclear. However it is probably intended to convey that Mr Bosworth had said that the applicants would obtain a right to permanent occupancy only if the transfer of the Island to Tasmania was made subject to that right. The second sentence is not direct evidence that Mr Bosworth or any other representative of Tasmania said that the applicants would have secure occupancy of the Island. It assumes that someone had in the past made such a representation. No conversation in which the representation was made is deposed to. No document is produced to support it. No date is assigned to the representation. Even the conversation with Mr Bosworth is not given a date. From the surrounding paragraphs of the affidavit it appears to have occurred between June 1994 and May 1995. This scant material does not satisfy me that any Tasmanian officer represented to the applicants that they "would have secure occupancy". The true position is that when Mr Hollier was unable to obtain what he wanted from AMSA, because AMSA wanted to dispose of the Island and was not prepared to encumber it, Mr Hollier sought to persuade Tasmania Parks to give him a long lease. He was unsuccessful. With the exception of the unsatisfactory evidence I have described, all the material, whether emanating from Mr Hollier or Tasmania Parks, shows no more than that Tasmania Parks was responding to Mr Hollier's overtures. It was negotiating, not representing. In all the letters Mr Hollier wrote to Tasmania Parks, there is not one that supports the view that any Tasmania Parks officer made the representation alleged. Even the letter to the Minister of Transport does not allege any advice given to Mr Hollier by Tasmania Parks.

For the avoidance of doubt I should mention the statement in an earlier paragraph of Mr Hollier's affidavit that "Mr Bosworth advised me that had the title to Deal Island been transferred to Tasmania the long-term lease we had been offered would `not be worth the paper it was written on' ...". The context provided by the affidavit as a whole shows that the alleged offer was made by AMSA and not by Tasmania.

CONCLUSION

The applicants have not made out any of their claims to relief, and the application is dismissed with costs.

I certify that this and the preceding fourteen (14) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg

Associate:

Dated: 6 March 1998

The first applicant appeared for himself and the second applicant

Counsel for the first Respondent:	J Beach
Solicitors for the first Respondent:	Minter Ellison
Counsel for the second Respondent:	W C R Bale QC, Solicitor-General for the State of Tasmania
Solicitor for the second Respondent:	Crown-Solicitor for the State of Tasmania
Counsel for the third Respondent:	W Harris
Solicitor for the third Respondent:	Australian Government Solicitor
Date of Hearing:	23-26 February 1998