case_text: Significantly MMLIC did not appoint a receiver and manager. If such had been the case, the receiver would have received the rents and managed the property as agent for the mortgagor: cf Conveyancing Act 1919 (NSW) s 115(2) ; see also Visbord v Federal Commissioner of Taxation [1943] HCA 4 ; (1943) 68 CLR 354; and would have been required to apply all money received by him in accordance with s 115(8) which includes (subcl (d)) "payment of the interest due and unpaid ... in respect of any principal money due under the mortgage": see generally Butt, Land Law , 18118 ff (5 th ed, 2006). 172 MMLIC was acting primarily for its own benefit. There was nothing fiduciary in the powers it was exercising. It was not acting as Chapel Road's agent: cf Ferguson v Federal Commissioner of Taxation (1979) 26 ALR 307 at 319; see also Federal Commissioner of Taxation v Walker (1984) 2 FCR 283. It was not providing services to Chapel Road: National Bank of Australia v Sproule , above, at 510. If MMLIC's primary purpose in carrying on the business was, in all probability, to preserve the value of the property pending its sale, it nonetheless was conferring an incidental benefit on Chapel Road. It did not have a free hand in dealing with the rents received by its agent. It was constrained by the mortgage itself and by its position as mortgagee in possession. In reality its position differed little, in my view, from that of a receiver under the Conveyancing Act at least in respect of the application of the rents received. The rental income had to be accounted for to Chapel Road. What this meant in practical terms was, first, that it was to be applied in payment of outgoings. The net income was then to be applied "on account of some liability under the mortgage": cf Visbord v Federal Commissioner of Taxation at 370; and in the circumstances this was Chapel Road's monthly rental liability: see Fisher and Lightwood's Law of Mortgage , at 19.33, 39.24 ff; In re Morley's Estate; Hollenden v Morley [1937] Ch 491 at 496. The rental income never being in surplus over what was required for interest, MMLIC was never, and never likely to be, in the position of having to elect whether to apply it in reduction of the principal sum as such or to hand it over to Chapel Road because it did not wish the capital to be repaid by "driblets": Nelson v Booth (1858) 3 De G & J 119 at 122. Put shortly, though MMLIC received the rents, the manner of their application was preordained by the mortgage and its legal consequences.


case_outcome: applied

case_text: Rather MMLIC elected to go into possession itself and to receive the rents, to manage the property and to carry on the rental business itself, through its agent JLW. It can be inferred that it took this course for the purpose of preserving its security by enhancing the prospects of the building's sale as tenanted, i.e. as a "going concern". It is improbable in my view that having entered into possession, MMLIC would not have wished to carry on the business. It may well have been to its disadvantage in preserving its security if it had failed to do so: cf County of Gloucester Bank v Rudry Merthyr Steam & House Coal Colliery Co (1895) 1 Ch 629 at 638.


case_text: In Evans v Federal Commissioner of Taxation (1989) 20 ATR 922 at 939 Hill J commented: "The question of whether a particular activity constitutes a business is often a difficult one involving as it does questions of fact and degree. Although both parties referred me to comments made in decided cases, each of the cases depends upon its own facts and in the ultimate is unhelpful in the resolution of some other and different fact situation. There is no one factor that is decisive of whether a particular activity constitutes a business. As Jessel MR said in the famous dictum in Ericsen v Last (1881) 8 QBD 414 at p 416: 'There is not, I think, any principle of law which lays down what carrying on trade is. There are a multitude of things which together make up the carrying on of trade.' Profit motive (but see cf Inland Revenue Commissioners v Incorporated Council of Law Reporting (1888) 22 QBD 279), scale of activity, whether ordinary commercial principles are applied characteristic of the line of business in which the venture is carried on ( Inland Revenue Commissioners v Livingston (1927) 11 TC 538), repetition and a permanent character, continuity ( Hope v Bathurst City Council [1980] HCA 16 ; (1980) 144 CLR 1 at 9; Ferguson v Federal Commissioner of Taxation (1979) 79 ATC 4261, 4264), and system ( Newton v Pyke (1908) 25 TLR 127) are all indicia to be considered as a whole, although the absence of any one will not necessarily result in the conclusion that no business is carried on." 172 MMLIC was acting primarily for its own benefit. There was nothing fiduciary in the powers it was exercising. It was not acting as Chapel Road's agent: cf Ferguson v Federal Commissioner of Taxation (1979) 26 ALR 307 at 319; see also Federal Commissioner of Taxation v Walker (1984) 2 FCR 283. It was not providing services to Chapel Road: National Bank of Australia v Sproule , above, at 510. If MMLIC's primary purpose in carrying on the business was, in all probability, to preserve the value of the property pending its sale, it nonetheless was conferring an incidental benefit on Chapel Road. It did not have a free hand in dealing with the rents received by its agent. It was constrained by the mortgage itself and by its position as mortgagee in possession. In reality its position differed little, in my view, from that of a receiver under the Conveyancing Act at least in respect of the application of the rents received. The rental income had to be accounted for to Chapel Road. What this meant in practical terms was, first, that it was to be applied in payment of outgoings. The net income was then to be applied "on account of some liability under the mortgage": cf Visbord v Federal Commissioner of Taxation at 370; and in the circumstances this was Chapel Road's monthly rental liability: see Fisher and Lightwood's Law of Mortgage , at 19.33, 39.24 ff; In re Morley's Estate; Hollenden v Morley [1937] Ch 491 at 496. The rental income never being in surplus over what was required for interest, MMLIC was never, and never likely to be, in the position of having to elect whether to apply it in reduction of the principal sum as such or to hand it over to Chapel Road because it did not wish the capital to be repaid by "driblets": Nelson v Booth (1858) 3 De G & J 119 at 122. Put shortly, though MMLIC received the rents, the manner of their application was preordained by the mortgage and its legal consequences.


case_outcome: cited

case_text: MMLIC was acting primarily for its own benefit. There was nothing fiduciary in the powers it was exercising. It was not acting as Chapel Road's agent: cf Ferguson v Federal Commissioner of Taxation (1979) 26 ALR 307 at 319; see also Federal Commissioner of Taxation v Walker (1984) 2 FCR 283. It was not providing services to Chapel Road: National Bank of Australia v Sproule , above, at 510. If MMLIC's primary purpose in carrying on the business was, in all probability, to preserve the value of the property pending its sale, it nonetheless was conferring an incidental benefit on Chapel Road. It did not have a free hand in dealing with the rents received by its agent. It was constrained by the mortgage itself and by its position as mortgagee in possession. In reality its position differed little, in my view, from that of a receiver under the Conveyancing Act at least in respect of the application of the rents received. The rental income had to be accounted for to Chapel Road. What this meant in practical terms was, first, that it was to be applied in payment of outgoings. The net income was then to be applied "on account of some liability under the mortgage": cf Visbord v Federal Commissioner of Taxation at 370; and in the circumstances this was Chapel Road's monthly rental liability: see Fisher and Lightwood's Law of Mortgage , at 19.33, 39.24 ff; In re Morley's Estate; Hollenden v Morley [1937] Ch 491 at 496. The rental income never being in surplus over what was required for interest, MMLIC was never, and never likely to be, in the position of having to elect whether to apply it in reduction of the principal sum as such or to hand it over to Chapel Road because it did not wish the capital to be repaid by "driblets": Nelson v Booth (1858) 3 De G & J 119 at 122. Put shortly, though MMLIC received the rents, the manner of their application was preordained by the mortgage and its legal consequences.


case_title: In re Morley's Estate; Hollenden v Morley [1937] Ch 491


case_title: Nelson v Booth (1858) 3 De G & J 119


case_text: It is a question of fact whether or not, throughout the relevant test period, Chapel Road carried on a business at all let alone "the same business" as it may claim to have carried on immediately before the test time. In my view, it did not carry on a business at all in the relevant periods on the Chapel Road site. MMLIC did. Chapel Road had no access to business assets. I would add that while it could, in a sense, be said that Chapel Road's assets were being put to gainful use: cf American Leaf Blending Co Sdn. Bhd v Director-General of Inland Revenue [1979] AC 677 at 684; it was not Chapel Road that was doing this. It was MMLIC. 174 Accordingly I am satisfied that the same business test of s 165- 210 of the 1997 Act was not satisfied and, in consequence, that neither the losses claimed to be transferred in both the 1998 and 1999 income years were deductible to R & D Holdings. 175 There is a seeming anomaly in this conclusion, especially given my earlier finding that the monthly interest liabilities were allowable deductions giving rise, in the circumstances, to significant tax losses. However, the conclusion itself, when considered in light of the "same business" test for loss transfer purposes, is the inexorable consequence of MMLIC having entered into possession as a mortgagee with all that that entailed.


case_text: Insofar as concerns the requirement of "recklessness", it is sufficient to refer to the observations of Hill and Hely JJ in Hart v Commissioner of Taxation [2003] FCAFC 105 ; (2003) 131 FCR 203 at [43] - [44] : "Recklessness is a concept well known to the law, particularly in the fields of tort and criminal law. In those fields, recklessness will usually be found to have been established if the person's conduct shows disregard of, or indifference to, consequences foreseeable by a reasonable person. In some contexts a subjective test is applied, but in others the test is objective. In BRK (Bris) Pty Ltd v Commissioner of Taxation (2001) 46 ATR 347 at 364 Cooper J made the following observations in relation to recklessness in the context of s 226H: Recklessness in this context means to include in a tax statement material upon which the Act or regulations are to operate, knowing that there is a real, as opposed to a fanciful risk, that the material may be incorrect, or be grossly indifferent as to whether or not the material is true and correct, and that a reasonable person in the position of the statement-maker would see there was a real risk that the Act and regulations may not operate correctly to lead to the assessment of the proper tax payable because of the content of the tax statement. So understood, the proscribed conduct is more than mere negligence and must amount to gross carelessness. There is a line between recklessness and dishonesty, and as the Explanatory Memorandum for the Taxation Laws Amendment (Self Assessment) Bill 1992 (Cth) (at p 89) confirms, a finding of dishonesty is not necessary for a taxpayer to be subject to a s 226H penalty. Wherever a tax return includes deductions that are not allowable, a foreseeable consequence is that there will be a tax shortfall, particularly in a system of self assessment. But, in the ordinary case, the mere fact that a tax return includes a deduction which is not allowable is not of itself sufficient to expose the taxpayer to a penalty. Negligence, at least must be established although there are some sections (e.g. s 226K) which impose a liability in particular circumstances even if the taxpayer has not been negligent. The context makes it clear that recklessness means something more than failure to exercise reasonable care (s 226G), but less than an intentional disregard of the Act (s 226J)." 181 The "not reasonably arguable" requirement of s 226K is elaborated in a definition in s 222C(1) of the 1936 Act . It provides: " 222C(1) [Regard to relevant authorities] For the purposes of this Part: (a) the correctness of the treatment of the application of a law; or (b) another matter; Is reasonably arguable if, having regard to the relevant authorities and the matter in relation to which the law is applied or the other matter, it would be concluded that what is argued for is about as likely as not correct." The word "authority" is defined to include the relevant income tax Act, intrinsic material of which account can be taken in interpreting that Act, the decisions of a court, Tribunal or board of review and public rulings.


case_text: The above subsection was analysed in some detail by Hill J for the purposes of s 226K in Walstern Pty Ltd v Commissioner of Taxation [2003] FCA 1428 ; (2003) 138 FCR 1 at [105] ff. I will not reiterate what was said there other than to note that his Honour indicated that an argument could not be as likely as not correct if there was a failure on the part of the taxpayer to exercise reasonable care in making it, although reasonable care alone would not result in an argument being, objectively, "about as likely as not correct". I agree with this view. I would add that encompassed in what constitutes reasonable care in this context is the need for the taxpayer, or its advisers who are reasonably relied upon, positively to advert to the applicability of the law in question to the taxpayer's circumstances and actually to form a reasoned view on the matter. 183 The material before the court is slight which deals with the bases on which the taxpayer considered it could recoup in the 1998 and 1999 income years the tax losses purportedly assigned to it by Chapel Road. There is some evidence that Mr Richardson took advice from his own tax agents on the matter and that advice was taken from an external adviser. Though the advice related to whether Chapel Road's losses could be transferred to R & D Holdings, the focus of that advice was on the question whether, because of its interest liability, Chapel Road had allowable deductions. It seems to have been assumed for the most part that if there were allowable deductions generating tax losses, these were transferable. 184 The only evidence put forward to indicate advice was given on the question of satisfying the conditions for a transfer of tax losses was contained in a facsimile from Mr Bobb, R & D Holdings' accountant, to Mr Richardson in April 1996 prior to Mudipo's sale of its interest in R & D Holdings. Mr Bobb noted that that sale would breach s 80A of the 1936 Act ("continuity of beneficial ownership"). He went on to indicate that R & D Holdings would, nonetheless, continue to satisfy the "same business" test. And he then observed: "Compliance with section 80E must also apply to 410 Chapel Road Pty Ltd, after the transfer of shares from MPL to AJR in R&D. We believe section 80E will not be breached by 410 Chapel Road Pty Ltd after the share transfer in R&D. Therefore, we expect domestic revenue losses incurred by 410 Chapel Pty Ltd will still be capable of being transferred to R&D."


case_text: The notes then referred to discussion at the meeting about the implications and the possibility of the AR terminal being designated as rail corridor or commercial corridor land under s 215 of the Transport Infrastructure Act . The notes record the following:- "QT apparently consider they have the power to designate such a facility as of strategic importance to the State and effectively take control of it. This was clearly not the intent of this section of the Transport Infrastructure Act . QR would argue that the terminal was not of strategic importance to the State as part of a transport corridor. This is because it is non corridor. QR is also unaware of it being in a transport infrastructure strategy. If QT pursued this avenue they would also end up with ownership of a terminal and potential responsibility for reimbursing NRC for their $17m improvements. If this avenue is not pursued by QT, Government (via Treasury) have the power to declare the terminal under the QCA Regulations. As such, QR is vulnerable to QT taking direct action contrary to QR's commercial interests." 453 The notes went on to record that it was decided the best way forward would be to maintain QR's stance that the terminal was non-corridor and:- " Resolutely refuse to have the terminal declared or made a common user facility and therefore no appeal processes if capacity not available to a third party using reciprocity and our need to have easy access to our own terminal as a rationale." (emphasis added) 454 The notes concluded by stating that QR may not need to brief the Minister if an agreement could not be reached because Queensland Transport was "giving precedence to their regulatory role over their shareholding role". 712 Even if Recital B(a)(ii) has the meaning suggested by Mr Graham's evidence, it would be wrong to construe the recital as over-riding the operative provisions of cl 5(6)(a): Ansett Transport Industries (Operations) Pty Limited v Commonwealth [1977] HCA 71 ; (1977) 139 CLR 54 at 73. 713 Mr Graham's evidence of his understanding of the EA, to the extent that it was inconsistent with the proper construction, was not reasonable and could not found an estoppel. 714 Clause 5(6)(a) makes it plain that it was for NRC to identify particular assets, as it did in relation to the AR terminal, and that the State of Queensland had a discretion as to the form of property rights to be granted. It could choose between ownership, lease or access. It was then for the parties to negotiate commercial terms and conditions for the grant of those rights. The grant of rights could not be complete until the negotiations were completed.


case_outcome: referred to

case_text: I will enumerate the propositions as follows:- (1) The object of estoppel in pais is to prevent an unjust or unconscionable departure by one person from an assumption adopted by another as the basis of an act or omission which, unless the assumption is adhered to, would operate to the other's detriment: Thompson v Palmer [1933] HCA 61 ; (1933) 49 CLR 507 (" Thompson ") at 547 per Dixon J; Grundt v Great Boulder Pty Limited (1937) 59 CLR 640 (" Grundt ") at 674 per Dixon J; Legione at 430 431; Waltons at 413 per Brennan J; Verwayen at 409 per Mason CJ and at 500 per McHugh J. (2) Whether a departure from an assumption is unjust depends upon the part taken by the person sought to be estopped in occasioning the adoption by the other party of the assumption: Thompson at 547 per Dixon J; Grundt at 675-676; Legione at 431 432; Waltons at 404 per Mason CJ, Wilson J; Verwayen at 444 per Deane J and at 500 per McHugh J. (3) Accordingly, the reference to an "unjust" departure is not a charter for idiosyncratic concepts of justice and fairness: Legione at 431. That is to say, it requires the party asserting the estoppel to prove that the other party caused him or her to adopt the assumption. (4) The party asserting an estoppel must establish that he or she has relied upon the assumption and that detriment flows from the reliance; that is to say, if the assumption were not adhered to: Grundt at 674 675; Waltons at 413 and Verwayen at 415. (5) It may be possible to divide detriment into the "narrower" and "broader" sense, although this approach, which was stated by Mason CJ in Verwayen at 415, really points to the distinction between reliance and detriment. The narrower sense is reliance on the assumption, whilst the broader sense is the detriment which flows from reliance on the deserted assumption. It is avoidance of the broader or "real detriment" flowing from reliance, from which the law seeks to protect the party who has changed his or her position: Grundt at 674 per Dixon J; Verwayen at 415 per Mason CJ. (6) It is only when the party sought to be estopped wishes to disavow the assumption that an estoppel arises and the question of detriment then falls to be considered: see P Feltham et al (2004) Spencer Bower's Law Relating to Estoppel by Representation (4 th ed) Butterworths, London at [V5.9] and Grundt at 674-675. (7) Although detriment in the broad sense is required to found an estoppel, the remedy the law provides will often be closer in scope to the detriment suffered in the narrower sense, that is to say, reliance: Verwayen at 415 416 per Mason CJ. (8) Avoidance of the detriment may require the party estopped to make good the assumption but this will depend on all the circumstances including the consideration that no more may be required than is necessary to avoid the detriment: see the discussion of Verwayen in Giumelli at [40] [48]. (9) The burden of proof of reliance and detriment lies upon the person asserting an estoppel: Thompson at 549 per Dixon CJ and Verwayen at 416 per Mason CJ. Dixon J's reference in Thompson at 549 to the shift of the burden of proof cannot have been intended to negate the principle stated by his Honour later in that paragraph, ie that the burden lies with the plaintiff. It can only have been intended to be a reference to the shifting evidentiary burden once some evidence of detriment is established: see J D Heydon (2004) Cross on Evidence (7 th ed) LexisNexis Butterworth, Sydney at [7205], [7225]. (10) Estoppel by convention requires proof of an assumption adopted by the parties as the conventional basis of their relationship: Thompson at 547; Con-Stan Industries of Australia Pty Limited v Norwich Winterthur Insurance (Australia) Limited [1986] HCA 14 ; (1986) 160 CLR 226 (" Con-Stan ") at 244. (11) The proposition that the necessary foundation for an estoppel by convention must be an assumed state of facts presently in existence, as stated by the High Court in Con-Stan at 244 245, has been qualified by later authority. The assumed state of affairs may extend to an assumption of law: Eslea Holdings Limited v Butts (1986) 6 NSWLR 175 at 186-189 per Samuels JA; Waltons at 415 and Verwayen at 413 per Dixon J, 445 per Deane J, and at 501 per McHugh J. (12) An estoppel by convention, unlike estoppel by representation, depends upon mutual assumptions. It is consensual in nature and is founded upon an agreed or mutually assumed state of facts (or law): Con-Stan at 244. (13) Conventional estoppel does not extend to assumptions concerning future matters. But an assumption as to a future right may found an equitable estoppel, in particular a promissory estoppel: Waltons at 398 399 per Mason CJ and Wilson J and 459 per Gaudron J and Verwayen at 499 500 per McHugh J. (14) The necessary elements of equitable or promissory estoppel are stated in the following passage from the judgment of Brennan J in Waltons at 428 429:- "In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise." (15) In order to found an estoppel between parties who are in contractual negotiations, it is necessary for the party asserting the estoppel to prove that the other party induced him or her to believe that the other's freedom to withdraw has gone; that is to say, there must be an expectation that the other party is bound to proceed. This is reflected in the first of the six principles stated by Brennan J above and in the decision of the Privy Council in Attorney-General (Hong Kong) v Humphreys Estate (Queen's Gardens) Limited [1987] 1 AC 114 (" Humphreys "). (16) The adoption of any assumption or expectation by the party asserting the estoppel must be reasonable in all the circumstances: Waltons at 406 per Mason CJ and Wilson J, Verwayen at 414 per Mason CJ and at 445 per Deane J and Standard Chartered Bank Aust Limited v Bank of China (1991) 23 NSWLR 164 at 180 per Giles J. (17) A representation or conduct relied upon as founding an estoppel must be clear and unambiguous: Legione at 435 437, Foran v Wight [1989] HCA 51 ; (1989) 168 CLR 385 at 410 411 per Mason J, and Mobil Oil Australia Limited v Wellcome International Pty Limited (1998) 81 FCR 475 (" Mobil Oil ") at 513 per Lockhart, Lindgren and Tamberlin JJ; see also Spencer Bower's Law Relating to Estoppel by Representation at [V111.4.1]. (18) A corollary of the requirement of certainty is that it is a necessary element of the principle that the defendant has created or encouraged an assumption that "a particular legal relationship" or "interest" would arise or be granted: Mobil Oil at 513. (19) A pre-existing contractual relationship is not, under Australian law, a prerequisite to the application of the doctrine of promissory estoppel: Waltons at 399 403 per Mason CJ and Wilson J and 428 429 per Brennan J and Verwayen at 455 per Dawson J. (20) A person who is led to believe that he or she will be granted an interest in land and who acts to his or her detriment in that belief will be entitled to an interest in the land in accordance with the following statement of principle enunciated by Lord Kingsdown in his dissenting judgment in Ramsden v Dyson at 170:- "If a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation created or encouraged by the landlord that he shall have a certain interest, takes possession of such land with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation." (21) Lord Kingsdown's statement of principle was approved by the Privy Council in Plimmer v Mayor of Wellington (1884) 9 AC 699 (" Plimmer") at 710 and again in Humphreys at 121: see also the analysis of the authorities by Priestley JA in Austotel Pty Limited v Franklins Selfserve Pty Limited (1989) 16 NSWLR 582 (" Austotel ") at 604 610. Priestley JA's distillation of the principles has been accepted as cogent: Mobil Oil at 512. (22) Subject to a qualification stated below, it is not necessary that the interest to the secured under the Ramsden v Dyson or Plimmer principle be expressly stated or that the terms of the arrangement or understanding to secure that interest be sufficiently certain to be enforceable as a contract. The Court must look at the circumstances of each case to determine the form of relief: Plimmer at 713 714, Inwards v Baker [1965] 2 QB 29 at 37, and Austotel at 607 610 per Priestley JA. (23) The qualification is that where the parties have not reached agreement as to the contractual terms necessary to establish the interest in the land, the Court will exercise caution in coming to a conclusion that it would be unconscionable to prevent a party from insisting upon its strict legal rights: Austotel at 585 586 per Kirby JA and at 620 621 per Rogers AJA. 765 At its highest, Mr O'Rourke's concession, and my view that Messrs Graham and Butcher held a similar assumption, establishes no more than a belief by all concerned that there would be negotiations. That claim runs headlong into the difficulty raised by the Privy Council in Humphreys and reiterated by Brennan J in Waltons . A hope or expectation that an agreement will be reached is not enough. The party asserting an estoppel must go further. 777 Priestley JA was there applying, although distinguishing on the facts, the principle stated by the Privy Council in Humphreys . His Honour's approach also reflects the principle stated by Brennan J in Waltons which I have set out at [766] above.


case_text: I will enumerate the propositions as follows:- (1) The object of estoppel in pais is to prevent an unjust or unconscionable departure by one person from an assumption adopted by another as the basis of an act or omission which, unless the assumption is adhered to, would operate to the other's detriment: Thompson v Palmer [1933] HCA 61 ; (1933) 49 CLR 507 (" Thompson ") at 547 per Dixon J; Grundt v Great Boulder Pty Limited (1937) 59 CLR 640 (" Grundt ") at 674 per Dixon J; Legione at 430 431; Waltons at 413 per Brennan J; Verwayen at 409 per Mason CJ and at 500 per McHugh J. (2) Whether a departure from an assumption is unjust depends upon the part taken by the person sought to be estopped in occasioning the adoption by the other party of the assumption: Thompson at 547 per Dixon J; Grundt at 675-676; Legione at 431 432; Waltons at 404 per Mason CJ, Wilson J; Verwayen at 444 per Deane J and at 500 per McHugh J. (3) Accordingly, the reference to an "unjust" departure is not a charter for idiosyncratic concepts of justice and fairness: Legione at 431. That is to say, it requires the party asserting the estoppel to prove that the other party caused him or her to adopt the assumption. (4) The party asserting an estoppel must establish that he or she has relied upon the assumption and that detriment flows from the reliance; that is to say, if the assumption were not adhered to: Grundt at 674 675; Waltons at 413 and Verwayen at 415. (5) It may be possible to divide detriment into the "narrower" and "broader" sense, although this approach, which was stated by Mason CJ in Verwayen at 415, really points to the distinction between reliance and detriment. The narrower sense is reliance on the assumption, whilst the broader sense is the detriment which flows from reliance on the deserted assumption. It is avoidance of the broader or "real detriment" flowing from reliance, from which the law seeks to protect the party who has changed his or her position: Grundt at 674 per Dixon J; Verwayen at 415 per Mason CJ. (6) It is only when the party sought to be estopped wishes to disavow the assumption that an estoppel arises and the question of detriment then falls to be considered: see P Feltham et al (2004) Spencer Bower's Law Relating to Estoppel by Representation (4 th ed) Butterworths, London at [V5.9] and Grundt at 674-675. (7) Although detriment in the broad sense is required to found an estoppel, the remedy the law provides will often be closer in scope to the detriment suffered in the narrower sense, that is to say, reliance: Verwayen at 415 416 per Mason CJ. (8) Avoidance of the detriment may require the party estopped to make good the assumption but this will depend on all the circumstances including the consideration that no more may be required than is necessary to avoid the detriment: see the discussion of Verwayen in Giumelli at [40] [48]. (9) The burden of proof of reliance and detriment lies upon the person asserting an estoppel: Thompson at 549 per Dixon CJ and Verwayen at 416 per Mason CJ. Dixon J's reference in Thompson at 549 to the shift of the burden of proof cannot have been intended to negate the principle stated by his Honour later in that paragraph, ie that the burden lies with the plaintiff. It can only have been intended to be a reference to the shifting evidentiary burden once some evidence of detriment is established: see J D Heydon (2004) Cross on Evidence (7 th ed) LexisNexis Butterworth, Sydney at [7205], [7225]. (10) Estoppel by convention requires proof of an assumption adopted by the parties as the conventional basis of their relationship: Thompson at 547; Con-Stan Industries of Australia Pty Limited v Norwich Winterthur Insurance (Australia) Limited [1986] HCA 14 ; (1986) 160 CLR 226 (" Con-Stan ") at 244. (11) The proposition that the necessary foundation for an estoppel by convention must be an assumed state of facts presently in existence, as stated by the High Court in Con-Stan at 244 245, has been qualified by later authority. The assumed state of affairs may extend to an assumption of law: Eslea Holdings Limited v Butts (1986) 6 NSWLR 175 at 186-189 per Samuels JA; Waltons at 415 and Verwayen at 413 per Dixon J, 445 per Deane J, and at 501 per McHugh J. (12) An estoppel by convention, unlike estoppel by representation, depends upon mutual assumptions. It is consensual in nature and is founded upon an agreed or mutually assumed state of facts (or law): Con-Stan at 244. (13) Conventional estoppel does not extend to assumptions concerning future matters. But an assumption as to a future right may found an equitable estoppel, in particular a promissory estoppel: Waltons at 398 399 per Mason CJ and Wilson J and 459 per Gaudron J and Verwayen at 499 500 per McHugh J. (14) The necessary elements of equitable or promissory estoppel are stated in the following passage from the judgment of Brennan J in Waltons at 428 429:- "In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise." (15) In order to found an estoppel between parties who are in contractual negotiations, it is necessary for the party asserting the estoppel to prove that the other party induced him or her to believe that the other's freedom to withdraw has gone; that is to say, there must be an expectation that the other party is bound to proceed. This is reflected in the first of the six principles stated by Brennan J above and in the decision of the Privy Council in Attorney-General (Hong Kong) v Humphreys Estate (Queen's Gardens) Limited [1987] 1 AC 114 (" Humphreys "). (16) The adoption of any assumption or expectation by the party asserting the estoppel must be reasonable in all the circumstances: Waltons at 406 per Mason CJ and Wilson J, Verwayen at 414 per Mason CJ and at 445 per Deane J and Standard Chartered Bank Aust Limited v Bank of China (1991) 23 NSWLR 164 at 180 per Giles J. (17) A representation or conduct relied upon as founding an estoppel must be clear and unambiguous: Legione at 435 437, Foran v Wight [1989] HCA 51 ; (1989) 168 CLR 385 at 410 411 per Mason J, and Mobil Oil Australia Limited v Wellcome International Pty Limited (1998) 81 FCR 475 (" Mobil Oil ") at 513 per Lockhart, Lindgren and Tamberlin JJ; see also Spencer Bower's Law Relating to Estoppel by Representation at [V111.4.1]. (18) A corollary of the requirement of certainty is that it is a necessary element of the principle that the defendant has created or encouraged an assumption that "a particular legal relationship" or "interest" would arise or be granted: Mobil Oil at 513. (19) A pre-existing contractual relationship is not, under Australian law, a prerequisite to the application of the doctrine of promissory estoppel: Waltons at 399 403 per Mason CJ and Wilson J and 428 429 per Brennan J and Verwayen at 455 per Dawson J. (20) A person who is led to believe that he or she will be granted an interest in land and who acts to his or her detriment in that belief will be entitled to an interest in the land in accordance with the following statement of principle enunciated by Lord Kingsdown in his dissenting judgment in Ramsden v Dyson at 170:- "If a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation created or encouraged by the landlord that he shall have a certain interest, takes possession of such land with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation." (21) Lord Kingsdown's statement of principle was approved by the Privy Council in Plimmer v Mayor of Wellington (1884) 9 AC 699 (" Plimmer") at 710 and again in Humphreys at 121: see also the analysis of the authorities by Priestley JA in Austotel Pty Limited v Franklins Selfserve Pty Limited (1989) 16 NSWLR 582 (" Austotel ") at 604 610. Priestley JA's distillation of the principles has been accepted as cogent: Mobil Oil at 512. (22) Subject to a qualification stated below, it is not necessary that the interest to the secured under the Ramsden v Dyson or Plimmer principle be expressly stated or that the terms of the arrangement or understanding to secure that interest be sufficiently certain to be enforceable as a contract. The Court must look at the circumstances of each case to determine the form of relief: Plimmer at 713 714, Inwards v Baker [1965] 2 QB 29 at 37, and Austotel at 607 610 per Priestley JA. (23) The qualification is that where the parties have not reached agreement as to the contractual terms necessary to establish the interest in the land, the Court will exercise caution in coming to a conclusion that it would be unconscionable to prevent a party from insisting upon its strict legal rights: Austotel at 585 586 per Kirby JA and at 620 621 per Rogers AJA. 747 Failure to disabuse may, in some circumstances, create or encourage an expectation: Crabb at 188 189. But this head of equity usually depends upon proof that the owner of the property seeks to take unconscionable advantage of another by allowing the other to spend money on the property in the belief, known to the owner, that the person expending the money will enjoy a benefit over the property: Holiday Inns Inc v Broadhead [1974] 232 EG 951 (" Holiday Inns ") discussed by Priestley JA in Austotel at 607 608 and 610. 775 It may be that under the broader view of estoppel explained by Priestly JA in Austotel it is not necessary that the interest to be secured has been expressly indicated. I do not need to consider this question although I would observe that the Full Court in Mobil Oil was of the view that it is a necessary element of the principle that the person sought to be estopped has created or encouraged an assumption that "a particular legal relationship" or "an interest" would be granted: see at 513. 776 What distinguishes the present case from the conclusion reached by Priestly JA in Austotel is that his Honour was of the view that the party sought to be estopped was certain to proceed with the lease and had so represented to the party asserting the estoppel: see at 613.


case_text: Negotiations commenced with the delivery by Mrs Fontaine of a draft lease to Mr Jenner on 20 May 1996. The correspondence between the parties shows that they were proceeding on the ordinary assumption that the parties were not bound until a formal contract had been drawn up and executed, the subject matter of the proposed agreement being a substantial lease of land: Australian Broadcasting Corporation v XIVth Commonwealth Games Limited (1988) 18 NSWLR 540 (" Commonwealth Games Case ") at 548, Long v Piper [2001] NSWCA 342 at [48] [55], Landsmiths Pty Limited v Hall (1999) 9 BPR 17,057 at [9]; see also Branir Pty Limited v Owston Nominees (No 2) Pty Limited [2001] FCA 1833 ; (2001) 117 FCR 424 at [365] and the authorities there cited.


case_text: The categories of unconscionable conduct may not be closed but the authorities give some guidance as to the type of conduct which must be demonstrated so as to fall within the "unconscionable" label. What is required is "serious misconduct or something clearly unfair or unreasonable". The term "unconscionable" imports "a pejorative moral judgment": Hurley v McDonald's Australia Limited (2000) ATPR 41-741 (" Hurley ") at [22] per Heerey, Drummond and Emmett JJ, and Australian Competition and Consumer Commission v Oceana Commercial Pty Limited [2003] FCA 1516 at [336] per Kiefel J.


case_text: Although there was some difference of opinion between the justices of the High Court in Berbatis as to the reach or breadth of s 51AA, it clearly involves taking improper advantage of a person at a disadvantage in circumstances where equity would intervene: Australian Competition and Consumer Commission v 4WD Systems Pty Limited (2003) 200 ALR 491 (" 4WD Systems ") at [180] per Selway J. 918 The ambit of s 51AC is wider than that of s 51AA; it is not limited to equitable doctrines or common law principles of unconscionability: see Berbatis at first instance, [2000] FCA 2 ; (2000) 96 FCR 491 per French J at [24], and 4WD Systems at [183]. 920 In order to establish that conduct is unconscionable under s 51AC, it is necessary to do more than show that the conduct contravenes s 52 of the Act or is otherwise in breach of the provisions of that legislation: 4WD Systems at [185]. 931 Even if QR misrepresented the true position to Queensland Transport, as Selway J said in 4WD Systems at [185], this is not sufficient to constitute unconscionable conduct. 932 The other matters complained of go to what was said to be QR's attempt to subvert the effect of the EA or to the claim of abuse of market power.


case_text: The proposition that there might have been encouragement of the type mentioned by Mr George was not put to Mr O'Rourke. There is nothing in the document which gives rise to a Jones v Dunkel inference by reason of QR's failure to call Mr George. The present case is in no way analogous to the position in Bond Brewing (NSW) Pty Limited v Reffell Party Ice Supplies Pty Limited (unreported, Supreme Court of NSW, Waddell CJ in Eq, 17 August 1987), where the tenant of a hotel acted upon an assumption that the landlord would not terminate a lease without paying to the tenant a reasonable sum for the value of the goodwill. His Honour found that the landlord knew this to be so, and that detriment was clearly established. None of these elements are demonstrated in these proceedings: see also Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Limited [2003] HCA 18 ; (2003) 214 CLR 51 (" Berbatis ") at [57] per Gummow and Hayne JJ. 914 Although there was some difference of opinion between the justices of the High Court in Berbatis as to the reach or breadth of s 51AA, it clearly involves taking improper advantage of a person at a disadvantage in circumstances where equity would intervene: Australian Competition and Consumer Commission v 4WD Systems Pty Limited (2003) 200 ALR 491 (" 4WD Systems ") at [180] per Selway J. 915 In my opinion the effect of what was said in Berbatis by Gleeson CJ at [7] [14], and by Gummow and Hayne JJ at [55] [58], is that two criteria must be established. The first is that the plaintiff was in a position of special disadvantage, whether by reason of illness, ignorance, inexperience, impaired facilities, financial need or other circumstances affecting its ability to conserve its own interests. 916 The second criterion is that the defendant took advantage of the plaintiff's disability or special disadvantage. 918 The ambit of s 51AC is wider than that of s 51AA; it is not limited to equitable doctrines or common law principles of unconscionability: see Berbatis at first instance, [2000] FCA 2 ; (2000) 96 FCR 491 per French J at [24], and 4WD Systems at [183].


case_text: As Heerey and Sackville JJ pointed out in Australian Competition and Consumer Commission v Safeway Stores Pty Limited (2003) 129 FCR 329 (" Safeway ") at [339], in answering the question of whether a firm has taken advantage of market power it is necessary to look not only at what the firm did but why the firm did it. That is why a business rationale for the conduct, to which I referred in the second principle above, independent of the question of market power, is relevant to determining the sufficiency of the connection. That is what lies at the heart of the assessment of whether the firm has taken advantage. 1026 In the present case it is necessary to consider QR's rationale for refusing to grant a long term lease to NRC in 1997 and 1998 and for its service of the notice to quit on PN in May 2003. 1027 QR's business rationale for its conduct in 1997 and 1998 was not as fully developed as that which more clearly emerged in documents recording its objectives in giving the notice to quit. Nevertheless, documents exist which, when read in the light of oral testimony, explain why QR changed its position with respect to the grant of a long term lease to NRC in 1997 and why it maintained that stance in 1998. The documents were not admitted as proof of the facts but, insofar as they state QR's objectives, they must be accepted as containing such statements, unless challenged by PN. 1028 PN accepted that Mr O'Rourke and Mr Hearsch were the witnesses whose evidence was relevant to QR's purposes in its 1997/1998 conduct. 1029 It is to be noted that at the outset, Mr O'Rourke stated in his letter of 27 March 1997 that the AR terminal was of strategic importance and that there was a need for it to be operated as a common user facility. 1112 In making a finding of purpose the Court is not so much concerned with the search for the "directing mind and will" of the corporation; it is concerned with inferences from the conduct of the corporation and of any other relevant person as well as other relevant circumstances: Safeway at [342] [343]. 1113 An inference of proscribed purposes is to be drawn on the balance of probabilities, after giving due weight to the rule in Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336: see Safeway at [341].


case_text: Their Honours made it clear in the passages to which I have referred that a person is not in a position of special disadvantage simply by reason of inequality of bargaining power: see also Australian Competition and Consumer Commission v Samton Holdings Pty Limited [2002] FCA 62 ; (2002) 117 FCR 301 (" Samton" ) at [50] per Gray, French and Stone JJ.


case_text: Morally unacceptable conduct in the form of unreasonable, unfair, bullying and thuggish behaviour amounts to unconscionable conduct within s 51AC: Australian Competition and Consumer Commission v Simply No-Knead (Franchising) Pty Limited [2000] FCA 1365 ; (2000) 104 FCR 253 (" No-Knead ") at [51] per Sundberg J. His Honour said that a refusal to supply or to negotiate constituted unconscionable conduct where the refusal amounted to intimidation or the application of illegitimate pressure on the other party to do something which the party applying the pressure had no entitlement to have done. 922 Neither of the elements of unconscionable conduct within the meaning of the unwritten law has been proved. First, the proposition that NRC was in a position of special disadvantage needs only to be stated to be rejected. NRC was, and remains, a large corporation with a very substantial business. It was, and is, well and capably managed and it had the support of Commonwealth and State Governments. It had access to and relied upon legal advice from prominent and very competent firms of solicitors. Any suggestion that it was incapable of looking after its own interests must be firmly rejected. 923 Similarly, any suggestion that QR unconscientiously took advantage of a disability or special disadvantage of NRC in 1997 and 1998 or in giving the notice to quit to PN in May 2003 cannot be accepted. 930 There is nothing to suggest serious misconduct of the type described by the Full Court in Hurley . There is no suggestion of unreasonable or bullying behaviour or any attempt to apply illegitimate pressure of the kind referred to by Sundberg J in No-Knead . This is hardly surprising given the identity of the parties. 933 But unmeritorious negotiating positions could not, without more, amount to unconscionable conduct. At very least, it was necessary for PN to demonstrate that QR's behaviour was unreasonable in the sense stated in No-Knead and that the conduct was in fact carried out. Mr Scheuber disavowed any suggestion that unmeritorious behaviour took place. I accept his denial. 934 I have rejected the claim of abuse of market power in dealing with PN's claim under s 46 of the Act. The same matters relied upon to support a claim of unconscionable conduct must suffer the same fate. 935 PN contends that QR's conduct, firstly in its refusal to grant PN a long term lease of the AR terminal and, secondly, in issuing PN with the notice to quit on 26 May 2003, amounts to a taking advantage by QR of its market power in two rail infrastructure markets for the purpose of deterring or preventing PN from engaging in competitive conduct in two downstream linehaul markets.


case_text: The position is effectively captured in the following passage from the judgment of Mance LJ in Baird Textiles Holdings Limited v Marks & Spencer Plc [2001] All ER (D) 352 (Feb) at [94]:- "As I have already said, the fact that there was never any agreement to reach or even to set out the essential principles which might govern any legally binding long-term relationship indicates that neither party can here objectively be taken to have intended to make any legally binding commitment of a long-term nature, and the law should not be ready to seek to fetter business relationships with its own view of what might represent appropriate business conduct, when parties have not chosen, or have not been willing or able, to do so in any identifiable legal terms themselves. These considerations, in my judgment, also make it wrong to afford relief based on estoppel, including relief limited to reliance loss, in the present context." As Mance LJ observed at [95] [96], even if the recognised principles of estoppel are "fertilised" by a broader approach exemplified in cases such as Holiday Inns , those cases are explained on the basis that the parties envisaged that rights already existed or they intended them to be created by contract.


case_outcome: distinguished

case_text: The proposition that there might have been encouragement of the type mentioned by Mr George was not put to Mr O'Rourke. There is nothing in the document which gives rise to a Jones v Dunkel inference by reason of QR's failure to call Mr George. The present case is in no way analogous to the position in Bond Brewing (NSW) Pty Limited v Reffell Party Ice Supplies Pty Limited (unreported, Supreme Court of NSW, Waddell CJ in Eq, 17 August 1987), where the tenant of a hotel acted upon an assumption that the landlord would not terminate a lease without paying to the tenant a reasonable sum for the value of the goodwill. His Honour found that the landlord knew this to be so, and that detriment was clearly established. None of these elements are demonstrated in these proceedings: see also Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Limited [2003] HCA 18 ; (2003) 214 CLR 51 (" Berbatis ") at [57] per Gummow and Hayne JJ.


case_text: In Melway Publishing Pty Limited v Robert Hicks Pty Limited [2001] HCA 13 ; (2001) 205 CLR 1 (" Melway ") at [43] the majority justices observed that the notion of market power as the capacity to act in a manner unconstrained by the conduct of competitors is reflected in s 46(3). The absence of constraint from customers is also a relevant matter. Matters of degree are involved: Boral Besser Masonry Limited v Australian Competition and Consumer Commission [2003] HCA 5 ; (2003) 215 CLR 374 (" Boral ") at [121] per Gleeson CJ and Callinan J. 969 The circumstances which may give rise to the absence of competitive constraint on a corporation are diverse. They are not confined to the matters identified in s 46(3): see Trade Practices Commission v Pioneer Concrete (Qld) Pty Limited (1994) 52 FCR 164 (" Pioneer Concrete ") at 172-173 and 176; see also Boral at [168] per Gaudron, Gummow and Hayne JJ. 979 Alternatively, any power arising from QR's ownership of the AR terminal was constrained by the grant of exclusive possession to NRC: Melway at [43], Boral at [121], and Pioneer Concrete at 172-173 and 176. 1020 Mr Ergas' opinion is that QR has market power by reason of its ownership of the track but that the declaration and the undertaking go to the question of whether it has taken advantage of the power. However, that view seems to me to be contrary to the authorities referred to above, in particular Melway at [43], Boral at [121], and Pioneer Concrete at 172 -173 and 176. 1022 Section 46 requires the co-existence of market power, taking advantage and proscribed purpose: Melway at [44] and Boral at [120]. 1023 Whether a firm has taken advantage of market power is often a difficult question to answer. This may be because the words "take advantage" have been equated with "use": see Queensland Wire at 191, 194, 202 and 213 214; but the word "use" does not capture the full meaning of "take advantage": Boral at [279]. 1024 The following ten principles emerge from Queensland Wire and the trilogy of cases which have explained the proper approach to construction:- (1) what is involved in answering the question of whether a firm has taken advantage of market power is the sufficiency of the connection between the market power and the conduct complained of: Melway at [44] and [67]; Boral [120] and [170]; Rural Press Limited v Australian Competition and Consumer Commission [2003] HCA 75 ; (2003) 216 CLR 53 (" Rural Press ") at [51]. McHugh J has said that a causal connection is required: Boral at [279]. (2) if the impugned conduct has a rational business explanation, that is a factor which points against the existence of a relevant connection between the market power and the conduct: Melway at [67]; Boral at [170]. (3) the words "take advantage" do not encompass conduct which has the purpose of protecting market power but no other connection: Rural Press at [51]. (4) in deciding whether a firm has taken advantage, is it relevant to ask how it would have behaved if it lacked power and whether it could have behaved in the way it did in a competitive market: Melway at [52] and [61]; Rural Press at [52]. (5) it may be proper to conclude that a firm is taking advantage of market power where it does something that is materially facilitated by the existence of the power: Melway at [51]; Rural Press at [53]. (6) McHugh J has said that the conduct must have given the firm an advantage it would not have had in the absence of market power: Boral at [279]. (7) the test may be whether the conduct was necessarily an exercise of market power: Melway at [68]. (8) one of the difficulties in determining what constitutes taking advantage stems from the need to distinguish between monopolistic practices and vigorous competition: Queensland Wire at 202. (9) the purpose of s 46 is the promotion of competition; it is concerned with the protection of competition, not competitors: Queensland Wire at 191 and 194; Boral at [87], [160], [164] and [260]; Melway at [17]. (10) it is dangerous to proceed from a finding of proscribed purpose to a conclusion of the existence of a substantial degree of market power, which can be taken advantage of; to do so will ordinarily be to invert the reasoning process: Boral at [123], [194]. 1078 As Heerey J said at first instance in Boral , this is a factor which points against a finding that the conduct constitutes taking advantage of market power: see (1999) 166 ALR 410 at 440. His Honour's views were adopted in the High Court: see [150] and [170]. 1079 It seems to me that these were matters of commercial judgment which, when considered in the light of QR's continuing offer of access to PN and its proposed conversion of the AR terminal to a multi-user facility, suggest that this was not an exercise of market power or a taking advantage of it. 1080 Mr Ergas considered the question of how QR would behave in a competitive market by assuming that QR would provide PN with a 30 year lease because PN is a more efficient terminal operator than QR and, accordingly, it would be more profitable for QR if PN controls the terminal. He criticised QR's conduct as irrational in a competitive market and supported his argument by reference to various hypothetical examples. 1088 PN criticised Mrs Smith's approach as based on faulty assumptions, including an assumption that there are several terminals equivalent to the AR terminal for standard gauge. That criticism is well placed but I accept the general effect of her approach which is plainly consistent with objective facts. As McHugh J said in Boral at [260], a rational business firm seeks to maximise profit and to increase its share of the market. That is the obvious explanation of QR's conduct. 1090 As Mason CJ and Wilson J said in Queensland Wire at 191, the operation of s 46 is predicated upon an assumption that competition is the means to protect the interests of consumers. Competition is by its nature deliberate and ruthless. All of the majority justices in Boral pointed out that s 46 is concerned with promoting competition, not protecting competitors: see [87], [160], [164] and [260]. Injuries to rivals are a necessary bi-product of vigorous competition. 1093 Second, I do not see that QR's desire to run the AR terminal as a common user or multi-user facility gave it an advantage it would not have had in the absence of market power: Boral at [279]. 1124 First, there are constant reminders in the authorities that competition is a ruthless process. As Mason CJ and Wilson J said in Queensland Wire at 191, competitors always try to injure each other by taking away sales and these injuries are the inevitable result of the competition that s 46 is designed to promote. In Boral at [88], Gleeson CJ and Callinan J pointed to the danger of confusing aggressive intent with anti-competitive behaviour: see also per Gaudron, Gummow and Hayne JJ at [160] and per McHugh J at [279]. 1158 I do not consider that this constitutes a sufficient connection to amount to taking advantage within the principle stated by the High Court in Melway and Boral .


case_text: In Krakowski v Eurolynx Properties Limited [1994] HCA 22 ; (1995) 183 CLR 563 at 582-3, the High Court approved the following statement of principle of Bright J in Brambles Holdings Limited v Carey (1976) 15 SASR 270 (" Brambles ") at 279:- "Always, when beliefs or opinions or states of mind are attributed to a company it is necessary to specify some person or persons so closely and relevantly connected with the company that the state of mind of that person or those persons can be treated as being identified with the company so that their state of mind can be treated as being the state of mind of the company." 59 That is not to say that the state of mind to be attributed to a corporation must always be the state of mind of one particular officer: Brambles at 275 per Bray CJ; see also Wood v City of Melbourne (1979) 26 ALR 430 at 447. 60 However, difficulties arise in ascertaining the state of mind of large corporations: Brambles at 275. Different board members may hold different beliefs and it is sometimes possible to look beyond the resolutions of the board to the deliberations of individual board members as well as those of senior management: Ishac v David Securities Pty Limited (No 6) (1992) 7 ACSR 199 at 200-201 per Young J and the authorities there cited. 61 As Bray CJ said in Brambles at 276, a corporation cannot know or believe two contradictory things at once and it is rational belief, not schizophrenia which is to be attributed; see also Halsbury's Laws of Australia , Vol 7 Corporations at [120-3045]. 62 Here, Mr Graham was "closely and relevantly connected" with all decisions taken by NRC in relation to the AR terminal during the period from about six months after the execution of the EA to 21 February 2002 when the shares were purchased by the Toll/Patrick consortium. He was directly responsible for all dealings with respect to the AR terminal during that period. He made the decisions as to what steps should be taken and his recommendations to the Board were accepted by the Board members. There was evidence, in general terms, from a number of Board members, Mr Butcher, Mr Moore-Wilton, Mr Stanko and Mrs Yeoh, that they relied on Mr Graham. 63 Whether NRC's state of mind for the purpose of determining what, if any, assumptions were adopted, is confined to that of Mr Graham is not entirely clear. PN accepted in final address that Mr Graham's state of mind was "paramount". But it submitted that Mr Butcher's assumptions were also relevant because of his regular discussions with Mr Graham. Although PN called evidence from Mr Moore-Wilton, Mr Stanko and Mrs Yeoh, it did not submit that their states of mind were to be attributed to NRC. That is hardly surprising because their assumptions were different from Mr Graham's. However, the same comment applies to Mr Butcher. 67 PN also called evidence from Mr Hanscomb, a senior executive of NRC, who had, in 1991, assisted Mr Moore-Wilton on the Committee of Officials (which was a Committee established to examine options for the funding of NRC) and assisted in drafting the EA. His expectation was that there would be a lease. I do not consider that his state of mind is to be attributed to NRC within the principle stated in Brambles . His evidence has some bearing on Mr Graham's expectations. 68 Mr O'Rourke was the CEO of QR and its predecessor, Queensland Railways. He was closely and relevantly connected with all dealings and decisions in respect of the AR terminal. His state of mind can be treated as that of QR for the purpose of determining what assumptions QR held and he must be taken to have known what was in his mind as CEO of Queensland Railways. 69 The relevant period for determining on what assumptions QR acted and the conduct which is said to have induced NRC to act to its detriment is the period up to March 1997 or perhaps to the date of Mr O'Rourke's letter of 25 March 1998. The other relevant mind of QR in that period was Mr Hearsch. 670 Second, as I have already mentioned, there are inconsistencies between the various assumptions said to have been held by Mr Graham, as managing director, and the board members who were called. It is true that Mr Graham was far more relevantly connected with the day to day dealings with QR in relation to the AR terminal than were Mr Butcher and the other board members. But it was the board which made the ultimate decisions to incur the expenditure on the AR terminal and the East Coast Strategy, not Mr Graham: cf Brambles. 694 In any event, the inconsistent evidence of Mr Graham and the other directors indicates that no clear or unambiguous assumption was held by NRC. Even if Mr Graham's belief was the only state of mind attributable to NRC within the principle stated in Brambles , so that his state of mind was that of NRC, the estoppel claim fails for other reasons stated later. 695 Assuming I am correct in reaching the conclusion that PN has not proved that the relevant persons held the alleged assumptions, it is unnecessary to examine the extensive documentary record to see whether the documents give rise to an inference that NRC did in fact hold those assumptions. In any event, in my opinion, the documents do not support such a finding. 696 Plainly, the critical document is the EA. It laid down the legal framework agreed between the Commonwealth and the States for the establishment of NRC as a government owned corporation to conduct rail freight operations on a national integrated rail network.


case_title: Branir Pty Limited v Owston Nominees (No 2) Pty Limited [2001] FCA 1833 ; (2001) 117 FCR 424


case_text: An inference of proscribed purposes is to be drawn on the balance of probabilities, after giving due weight to the rule in Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336: see Safeway at [341].


case_text: Whether conduct amounts to a representation is a question of fact to be determined against the background of all the surrounding circumstances: Taco Company of Australia Inc v Taco Bell Pty Limited (1982) 42 ALR 177 at 202; Campomar Sociedad Limitada v Nike International Limited [2000] HCA 12 ; (2000) 202 CLR 45 at [100] . The conduct must be considered as a whole: Butcher v Lachlan Elder Realty Pty Limited [2004] HCA 60 ; (2004) 218 CLR 592 at [39] .


case_title: Campomar Sociedad Limitada v Nike International Limited [2000] HCA 12 ; (2000) 202 CLR 45


case_text: Thus, whilst denying that NRC has made good the basal elements of its estoppel claim, the respondent points to the following proposition stated by McHugh J in Commonwealth of Australia v Verwayen [1990] HCA 39 ; (1990) 170 CLR 394 (" Verwayen") at 501 as a complete answer to the claim:- "Once the detriment has ceased or been paid for, there is nothing unconscionable in a party insisting on reverting to his or her former relationship with the other party and enforcing his or her strict legal rights." 22 NRC puts its claim under both s 52 of the Trade Practices Act 1974 (Cth) ("the Act ") and estoppel but similar questions arise in each of the claims. 23 NRC also claims that the respondent has engaged in unconscionable conduct in contravention of ss 51AA and 51AC of the Act . These claims turn largely upon strategies put forward by the respondent's middle management, in particular during 2001, for avoiding any obligations on the State of Queensland under the EA and for the use of the AR terminal as a "bargaining chip" in efforts by the respondent to enter interstate markets for the supply of rail freight services. 662 In the Verwayen at 409, Mason CJ described estoppel as a label which covers a complex array of rules spanning various categories. I do not need to set out all of the rules because PN confined its case to three categories. In doing so, PN recognised that the question of whether there is a "single overarching doctrine" or "a general doctrine of estoppel by conduct" was left open by the High Court in Giumelli v Giumelli [1999] HCA 10 ; (1999) 196 CLR 101 (" Giumelli ") at [7]. 668 I will enumerate the propositions as follows:- (1) The object of estoppel in pais is to prevent an unjust or unconscionable departure by one person from an assumption adopted by another as the basis of an act or omission which, unless the assumption is adhered to, would operate to the other's detriment: Thompson v Palmer [1933] HCA 61 ; (1933) 49 CLR 507 (" Thompson ") at 547 per Dixon J; Grundt v Great Boulder Pty Limited (1937) 59 CLR 640 (" Grundt ") at 674 per Dixon J; Legione at 430 431; Waltons at 413 per Brennan J; Verwayen at 409 per Mason CJ and at 500 per McHugh J. (2) Whether a departure from an assumption is unjust depends upon the part taken by the person sought to be estopped in occasioning the adoption by the other party of the assumption: Thompson at 547 per Dixon J; Grundt at 675-676; Legione at 431 432; Waltons at 404 per Mason CJ, Wilson J; Verwayen at 444 per Deane J and at 500 per McHugh J. (3) Accordingly, the reference to an "unjust" departure is not a charter for idiosyncratic concepts of justice and fairness: Legione at 431. That is to say, it requires the party asserting the estoppel to prove that the other party caused him or her to adopt the assumption. (4) The party asserting an estoppel must establish that he or she has relied upon the assumption and that detriment flows from the reliance; that is to say, if the assumption were not adhered to: Grundt at 674 675; Waltons at 413 and Verwayen at 415. (5) It may be possible to divide detriment into the "narrower" and "broader" sense, although this approach, which was stated by Mason CJ in Verwayen at 415, really points to the distinction between reliance and detriment. The narrower sense is reliance on the assumption, whilst the broader sense is the detriment which flows from reliance on the deserted assumption. It is avoidance of the broader or "real detriment" flowing from reliance, from which the law seeks to protect the party who has changed his or her position: Grundt at 674 per Dixon J; Verwayen at 415 per Mason CJ. (6) It is only when the party sought to be estopped wishes to disavow the assumption that an estoppel arises and the question of detriment then falls to be considered: see P Feltham et al (2004) Spencer Bower's Law Relating to Estoppel by Representation (4 th ed) Butterworths, London at [V5.9] and Grundt at 674-675. (7) Although detriment in the broad sense is required to found an estoppel, the remedy the law provides will often be closer in scope to the detriment suffered in the narrower sense, that is to say, reliance: Verwayen at 415 416 per Mason CJ. (8) Avoidance of the detriment may require the party estopped to make good the assumption but this will depend on all the circumstances including the consideration that no more may be required than is necessary to avoid the detriment: see the discussion of Verwayen in Giumelli at [40] [48]. (9) The burden of proof of reliance and detriment lies upon the person asserting an estoppel: Thompson at 549 per Dixon CJ and Verwayen at 416 per Mason CJ. Dixon J's reference in Thompson at 549 to the shift of the burden of proof cannot have been intended to negate the principle stated by his Honour later in that paragraph, ie that the burden lies with the plaintiff. It can only have been intended to be a reference to the shifting evidentiary burden once some evidence of detriment is established: see J D Heydon (2004) Cross on Evidence (7 th ed) LexisNexis Butterworth, Sydney at [7205], [7225]. (10) Estoppel by convention requires proof of an assumption adopted by the parties as the conventional basis of their relationship: Thompson at 547; Con-Stan Industries of Australia Pty Limited v Norwich Winterthur Insurance (Australia) Limited [1986] HCA 14 ; (1986) 160 CLR 226 (" Con-Stan ") at 244. (11) The proposition that the necessary foundation for an estoppel by convention must be an assumed state of facts presently in existence, as stated by the High Court in Con-Stan at 244 245, has been qualified by later authority. The assumed state of affairs may extend to an assumption of law: Eslea Holdings Limited v Butts (1986) 6 NSWLR 175 at 186-189 per Samuels JA; Waltons at 415 and Verwayen at 413 per Dixon J, 445 per Deane J, and at 501 per McHugh J. (12) An estoppel by convention, unlike estoppel by representation, depends upon mutual assumptions. It is consensual in nature and is founded upon an agreed or mutually assumed state of facts (or law): Con-Stan at 244. (13) Conventional estoppel does not extend to assumptions concerning future matters. But an assumption as to a future right may found an equitable estoppel, in particular a promissory estoppel: Waltons at 398 399 per Mason CJ and Wilson J and 459 per Gaudron J and Verwayen at 499 500 per McHugh J. (14) The necessary elements of equitable or promissory estoppel are stated in the following passage from the judgment of Brennan J in Waltons at 428 429:- "In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise." (15) In order to found an estoppel between parties who are in contractual negotiations, it is necessary for the party asserting the estoppel to prove that the other party induced him or her to believe that the other's freedom to withdraw has gone; that is to say, there must be an expectation that the other party is bound to proceed. This is reflected in the first of the six principles stated by Brennan J above and in the decision of the Privy Council in Attorney-General (Hong Kong) v Humphreys Estate (Queen's Gardens) Limited [1987] 1 AC 114 (" Humphreys "). (16) The adoption of any assumption or expectation by the party asserting the estoppel must be reasonable in all the circumstances: Waltons at 406 per Mason CJ and Wilson J, Verwayen at 414 per Mason CJ and at 445 per Deane J and Standard Chartered Bank Aust Limited v Bank of China (1991) 23 NSWLR 164 at 180 per Giles J. (17) A representation or conduct relied upon as founding an estoppel must be clear and unambiguous: Legione at 435 437, Foran v Wight [1989] HCA 51 ; (1989) 168 CLR 385 at 410 411 per Mason J, and Mobil Oil Australia Limited v Wellcome International Pty Limited (1998) 81 FCR 475 (" Mobil Oil ") at 513 per Lockhart, Lindgren and Tamberlin JJ; see also Spencer Bower's Law Relating to Estoppel by Representation at [V111.4.1]. (18) A corollary of the requirement of certainty is that it is a necessary element of the principle that the defendant has created or encouraged an assumption that "a particular legal relationship" or "interest" would arise or be granted: Mobil Oil at 513. (19) A pre-existing contractual relationship is not, under Australian law, a prerequisite to the application of the doctrine of promissory estoppel: Waltons at 399 403 per Mason CJ and Wilson J and 428 429 per Brennan J and Verwayen at 455 per Dawson J. (20) A person who is led to believe that he or she will be granted an interest in land and who acts to his or her detriment in that belief will be entitled to an interest in the land in accordance with the following statement of principle enunciated by Lord Kingsdown in his dissenting judgment in Ramsden v Dyson at 170:- "If a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation created or encouraged by the landlord that he shall have a certain interest, takes possession of such land with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation." (21) Lord Kingsdown's statement of principle was approved by the Privy Council in Plimmer v Mayor of Wellington (1884) 9 AC 699 (" Plimmer") at 710 and again in Humphreys at 121: see also the analysis of the authorities by Priestley JA in Austotel Pty Limited v Franklins Selfserve Pty Limited (1989) 16 NSWLR 582 (" Austotel ") at 604 610. Priestley JA's distillation of the principles has been accepted as cogent: Mobil Oil at 512. (22) Subject to a qualification stated below, it is not necessary that the interest to the secured under the Ramsden v Dyson or Plimmer principle be expressly stated or that the terms of the arrangement or understanding to secure that interest be sufficiently certain to be enforceable as a contract. The Court must look at the circumstances of each case to determine the form of relief: Plimmer at 713 714, Inwards v Baker [1965] 2 QB 29 at 37, and Austotel at 607 610 per Priestley JA. (23) The qualification is that where the parties have not reached agreement as to the contractual terms necessary to establish the interest in the land, the Court will exercise caution in coming to a conclusion that it would be unconscionable to prevent a party from insisting upon its strict legal rights: Austotel at 585 586 per Kirby JA and at 620 621 per Rogers AJA. 835 The third category, operational detriment, involves the fulfilment of expectations. It is an aspect of the broader category of detriment referred to in Verwayen. 836 Three principles should be added to those which I included in my summary of the relevant legal principles of estoppel at [668-(5) (9)]; see also propositions (5) and (6) in Brennan J's summary of the principles of equitable estoppel set out at [668 (14)]. 839 Third, the principles of equitable estoppel are concerned with satisfaction of the minimum equity necessary to do justice. Equitable estoppel is intended to relieve against the detriment suffered and not to make good an expectation: see the Full Court's discussion of the principles stated in Verwayen in Mobil Oil at 516 517. 840 Fourth, once the detriment has ceased or been paid for, there is nothing unconscionable in a party insisting upon the enforcement of its strict legal rights: Verwayen at 501. 841 This case is to be distinguished from all of the proprietary estoppel, or estoppel by acquiescence, cases because from the time when QR sought to resile from the alleged assumptions, it offered to negotiate to provide access rights in accordance with the EA. 842 In particular, from the time of the offer of the Terminal Services Agreement in Mr Wilson's seventh affidavit, there was a specific offer of terms which in my view cannot be said to be uncommercial. It seems to me that for PN to succeed in establishing the necessary detriment I would have to be satisfied that the terms offered by QR are so unreasonable that they could not possibly satisfy any rights which might be embedded in the broad terms of cl 5(6)(a) of the EA. In particular, I would have to be satisfied that the proposed Terminal Services Agreement does not confer upon PN the ability to recoup any detriment suffered by the withdrawal of the offer of a long lease. 843 It must be borne in mind that QR has amended the terms of the proposed Terminal Services Agreement to meet some of the objections raised by PN in cross-examination of Mr Wilson. It is also to be borne in mind that QR has undertaken to keep the offer open until 90 days after the delivery of my judgment. 844 Although it is true that the term or period of the amended Draft Terminal Services Agreement is not for so long as NRC continues to carry on interstate freight operations, I do not think that this is an answer to QR's contention that the amended Draft Terminal Services Agreement will overcome any detriment suffered by the withdrawal of the "offer" of a long term lease. Nor is PN's objection that the extensions of the term be at QR's discretion. 845 What seems to me to be the decisive answer to the estoppel claim put by PN is that under the amended Draft Terminal Services Agreement, any detriment alleged by PN will cease for reasons set out below. That is to say the detriment, if any, will cease or be paid for within the principle stated by McHugh J in Verwayen . 846 Even if PN has not recouped the initial expenditure on the AR Terminal or on the East Coast Strategy, it will have ample opportunity to do so under the Terminal Services Agreement. It should be noted that the proposed Terminal Services Agreement incudes an offer by QR to expand the size of the terminal to add two parcels of land comprising an additional 3.25 hectares. This will enable QR to expand the capacity of the AR terminal so as to accommodate PN's existing profitable level of throughput with some increases as envisaged in the latest draft of the Terminal Services Agreement. It must be borne in mind that NRC has already had more than eight years to recoup any detriment said to have been occasioned by QR's change of position in March 1997. 847 PN called evidence from its Financial Controller, Mr Gilchrist. His evidence was that between 1 July 1993 and 30 June 2004, NRC had made a net benefit from its operation of the AR terminal of $104 million before tax and depreciation. He agreed that in calculating the net benefit it was appropriate to disregard depreciation.


case_text: I will enumerate the propositions as follows:- (1) The object of estoppel in pais is to prevent an unjust or unconscionable departure by one person from an assumption adopted by another as the basis of an act or omission which, unless the assumption is adhered to, would operate to the other's detriment: Thompson v Palmer [1933] HCA 61 ; (1933) 49 CLR 507 (" Thompson ") at 547 per Dixon J; Grundt v Great Boulder Pty Limited (1937) 59 CLR 640 (" Grundt ") at 674 per Dixon J; Legione at 430 431; Waltons at 413 per Brennan J; Verwayen at 409 per Mason CJ and at 500 per McHugh J. (2) Whether a departure from an assumption is unjust depends upon the part taken by the person sought to be estopped in occasioning the adoption by the other party of the assumption: Thompson at 547 per Dixon J; Grundt at 675-676; Legione at 431 432; Waltons at 404 per Mason CJ, Wilson J; Verwayen at 444 per Deane J and at 500 per McHugh J. (3) Accordingly, the reference to an "unjust" departure is not a charter for idiosyncratic concepts of justice and fairness: Legione at 431. That is to say, it requires the party asserting the estoppel to prove that the other party caused him or her to adopt the assumption. (4) The party asserting an estoppel must establish that he or she has relied upon the assumption and that detriment flows from the reliance; that is to say, if the assumption were not adhered to: Grundt at 674 675; Waltons at 413 and Verwayen at 415. (5) It may be possible to divide detriment into the "narrower" and "broader" sense, although this approach, which was stated by Mason CJ in Verwayen at 415, really points to the distinction between reliance and detriment. The narrower sense is reliance on the assumption, whilst the broader sense is the detriment which flows from reliance on the deserted assumption. It is avoidance of the broader or "real detriment" flowing from reliance, from which the law seeks to protect the party who has changed his or her position: Grundt at 674 per Dixon J; Verwayen at 415 per Mason CJ. (6) It is only when the party sought to be estopped wishes to disavow the assumption that an estoppel arises and the question of detriment then falls to be considered: see P Feltham et al (2004) Spencer Bower's Law Relating to Estoppel by Representation (4 th ed) Butterworths, London at [V5.9] and Grundt at 674-675. (7) Although detriment in the broad sense is required to found an estoppel, the remedy the law provides will often be closer in scope to the detriment suffered in the narrower sense, that is to say, reliance: Verwayen at 415 416 per Mason CJ. (8) Avoidance of the detriment may require the party estopped to make good the assumption but this will depend on all the circumstances including the consideration that no more may be required than is necessary to avoid the detriment: see the discussion of Verwayen in Giumelli at [40] [48]. (9) The burden of proof of reliance and detriment lies upon the person asserting an estoppel: Thompson at 549 per Dixon CJ and Verwayen at 416 per Mason CJ. Dixon J's reference in Thompson at 549 to the shift of the burden of proof cannot have been intended to negate the principle stated by his Honour later in that paragraph, ie that the burden lies with the plaintiff. It can only have been intended to be a reference to the shifting evidentiary burden once some evidence of detriment is established: see J D Heydon (2004) Cross on Evidence (7 th ed) LexisNexis Butterworth, Sydney at [7205], [7225]. (10) Estoppel by convention requires proof of an assumption adopted by the parties as the conventional basis of their relationship: Thompson at 547; Con-Stan Industries of Australia Pty Limited v Norwich Winterthur Insurance (Australia) Limited [1986] HCA 14 ; (1986) 160 CLR 226 (" Con-Stan ") at 244. (11) The proposition that the necessary foundation for an estoppel by convention must be an assumed state of facts presently in existence, as stated by the High Court in Con-Stan at 244 245, has been qualified by later authority. The assumed state of affairs may extend to an assumption of law: Eslea Holdings Limited v Butts (1986) 6 NSWLR 175 at 186-189 per Samuels JA; Waltons at 415 and Verwayen at 413 per Dixon J, 445 per Deane J, and at 501 per McHugh J. (12) An estoppel by convention, unlike estoppel by representation, depends upon mutual assumptions. It is consensual in nature and is founded upon an agreed or mutually assumed state of facts (or law): Con-Stan at 244. (13) Conventional estoppel does not extend to assumptions concerning future matters. But an assumption as to a future right may found an equitable estoppel, in particular a promissory estoppel: Waltons at 398 399 per Mason CJ and Wilson J and 459 per Gaudron J and Verwayen at 499 500 per McHugh J. (14) The necessary elements of equitable or promissory estoppel are stated in the following passage from the judgment of Brennan J in Waltons at 428 429:- "In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise." (15) In order to found an estoppel between parties who are in contractual negotiations, it is necessary for the party asserting the estoppel to prove that the other party induced him or her to believe that the other's freedom to withdraw has gone; that is to say, there must be an expectation that the other party is bound to proceed. This is reflected in the first of the six principles stated by Brennan J above and in the decision of the Privy Council in Attorney-General (Hong Kong) v Humphreys Estate (Queen's Gardens) Limited [1987] 1 AC 114 (" Humphreys "). (16) The adoption of any assumption or expectation by the party asserting the estoppel must be reasonable in all the circumstances: Waltons at 406 per Mason CJ and Wilson J, Verwayen at 414 per Mason CJ and at 445 per Deane J and Standard Chartered Bank Aust Limited v Bank of China (1991) 23 NSWLR 164 at 180 per Giles J. (17) A representation or conduct relied upon as founding an estoppel must be clear and unambiguous: Legione at 435 437, Foran v Wight [1989] HCA 51 ; (1989) 168 CLR 385 at 410 411 per Mason J, and Mobil Oil Australia Limited v Wellcome International Pty Limited (1998) 81 FCR 475 (" Mobil Oil ") at 513 per Lockhart, Lindgren and Tamberlin JJ; see also Spencer Bower's Law Relating to Estoppel by Representation at [V111.4.1]. (18) A corollary of the requirement of certainty is that it is a necessary element of the principle that the defendant has created or encouraged an assumption that "a particular legal relationship" or "interest" would arise or be granted: Mobil Oil at 513. (19) A pre-existing contractual relationship is not, under Australian law, a prerequisite to the application of the doctrine of promissory estoppel: Waltons at 399 403 per Mason CJ and Wilson J and 428 429 per Brennan J and Verwayen at 455 per Dawson J. (20) A person who is led to believe that he or she will be granted an interest in land and who acts to his or her detriment in that belief will be entitled to an interest in the land in accordance with the following statement of principle enunciated by Lord Kingsdown in his dissenting judgment in Ramsden v Dyson at 170:- "If a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation created or encouraged by the landlord that he shall have a certain interest, takes possession of such land with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation." (21) Lord Kingsdown's statement of principle was approved by the Privy Council in Plimmer v Mayor of Wellington (1884) 9 AC 699 (" Plimmer") at 710 and again in Humphreys at 121: see also the analysis of the authorities by Priestley JA in Austotel Pty Limited v Franklins Selfserve Pty Limited (1989) 16 NSWLR 582 (" Austotel ") at 604 610. Priestley JA's distillation of the principles has been accepted as cogent: Mobil Oil at 512. (22) Subject to a qualification stated below, it is not necessary that the interest to the secured under the Ramsden v Dyson or Plimmer principle be expressly stated or that the terms of the arrangement or understanding to secure that interest be sufficiently certain to be enforceable as a contract. The Court must look at the circumstances of each case to determine the form of relief: Plimmer at 713 714, Inwards v Baker [1965] 2 QB 29 at 37, and Austotel at 607 610 per Priestley JA. (23) The qualification is that where the parties have not reached agreement as to the contractual terms necessary to establish the interest in the land, the Court will exercise caution in coming to a conclusion that it would be unconscionable to prevent a party from insisting upon its strict legal rights: Austotel at 585 586 per Kirby JA and at 620 621 per Rogers AJA. 761 A conventional estoppel must be mutual: see Con-Stan at 244. At most, there was a mutual assumption of Mr Graham and Mr O'Rourke that control had been transferred for three years in anticipation of a lease of up to 30 years being negotiated. That is not an assumption of existing fact. If it can found an estoppel at all, it can only be a promissory estoppel: see [668-(13)], which I address below at [771]. 762 The high water mark of this claim is Mr O'Rourke's concession that control was transferred to NRC on 5 April 1993 in anticipation of a 30 year lease being negotiated. 763 The climate of goodwill which then existed between the parties, and the perception amongst all concerned that micro-economic reform of the rail freight industry was to be effected, suggests that Mr Graham and Mr Butcher held a similar assumption.


case_text: The last mentioned words appear to be a reference to the form of estoppel stated in Ramsden v Dyson [1866] 1 LRHL 129 (" Ramsden v Dyson ") at 170. That is to say, it refers to an equitable estoppel arising from an expectation created or encouraged by the words or conduct of the party against whom the estoppel is raised. This form of estoppel includes failure to disabuse a party where the person estopped has knowledge of the other party's intention to act upon the expectation: see Crabb v Arun District Council [1976] 1 Ch 179 (" Crabb") per Lord Denning MR at 189. 747 Failure to disabuse may, in some circumstances, create or encourage an expectation: Crabb at 188 189. But this head of equity usually depends upon proof that the owner of the property seeks to take unconscionable advantage of another by allowing the other to spend money on the property in the belief, known to the owner, that the person expending the money will enjoy a benefit over the property: Holiday Inns Inc v Broadhead [1974] 232 EG 951 (" Holiday Inns ") discussed by Priestley JA in Austotel at 607 608 and 610.


case_text: Where the parties have entered into a written agreement, the Court will ordinarily hold them to the rights and obligations they have assumed under it. The law allows for exceptions but they must be proved according to established legal categories: Equuscorp Pty Limited v Glengallan Investments Pty Limited (2004) 218 CLR 472 at [35]. 758 Mr Graham's evidence that there was no "sunset" provision on the transfer of control is at odds with the written agreements. Substantially greater and more precise evidence would have been required to establish any reasonable argument to the effect that the transfer of control was assumed to be for a longer period than the term of the lease. 759 Even if Mr Graham had an assumption that NRC would continue in possession and control of the AR terminal for a period beyond the expiration of the three year lease, that was not an assumption of existing fact.