Reported Decision : (2001) NSW ConvR 55-980 New South Wales Supreme Court CITATION : Edwather Grazing Pty Ltd v Pincevic Nominees Pty Ltd [2001] NSWSC 157 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 2173 of 2000 HEARING DATE(S) : 22 February 2001 JUDGMENT DATE : 15 March 2001 PARTIES : Edwather Grazing Pty Ltd (Plaintiff) Pincevic Nominees Pty Ltd (Defendant) JUDGMENT OF : Windeyer J at 1 COUNSEL : Mr C Harris (Plaintiff) Mr P McEwen SC (Defendant) SOLICITORS : John W Hogan (Plaintiff) Marsdens (Defendant) CATCHWORDS : ESTOPPEL - equitable estoppel - representation as to future conduct - ESTOPPEL - remedies - facts such that appropriate remedy to make the representation good DECISION : See paragraph 27 IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION WINDEYER J THURSDAY, 15 MARCH 2001 2173/00 EDWATHER GRAZING PTY LIMITED V PINCEVIC NOMINEES PTY LIMITED JUDGMENT Introduction 1 The plaintiff company, Edwather Grazing Pty Limited ("Edwather"), owns the property No. 5 Raymond Road ("No.5"). The first defendant company, Pincevic Nominees Pty Limited ("Pincevic Nominees"), owns the adjoining lot and has built on its land a shopping centre known as Raymond Mall ("Raymond Mall"). The second defendant, Anton Pincevic, is the director of the first defendant. A plan showing the location of the properties is shown below. 2 Raymond Mall has a car park, with entry off Raymond Road. There is a pipe fence on the boundary of the car park, which separates it from No. 5. 3 Between 1996 and 2000, Edwather built a shopping centre on its land with most of the shops fronting on the Raymond Mall car park. It claims that it did so relying on a representation made in 1989 by Mr Pincevic that Pincevic Nominees would remove the fence separating the properties which now prevents access to the shops erected on No. 5 from the Raymond Mall car park. 4 The plaintiff seeks an order for the removal of the fence and damages. The facts 5 The shopping complex of Pincevic Nominees known as Raymond Mall has an entrance off Raymond Road which leads to an upper car park facing the top level of shops. There is also parking underneath the mall. This development was built between 1985 and 1989. 6 Prior to 1989 the adjoining block, 5 Raymond Road, contained a derelict house. The parking lot on the top level of Raymond Mall abutted the boundary of Pincevic Nominees land and No. 5. Between the parking lot and the derelict block was an iron fence. 7 Edwather has owned No. 5 since 1989. Mr Long controls the company In 1989 he had outline plans prepared for a shopping centre on that site with shop frontages onto Raymond Road and Raymond Lane. 8 Mr Long discussed these plans with Mr Ian Maher, the Town Planning Manager of Blue Mountains City Council, who indicated that the Council did not favour the plans and would prefer that any proposed development be integrated into Raymond Mall, and especially that most shops front onto the Raymond Mall car park. He was keen to provide pedestrian access from Macquarie Road to Springwood Avenue, presumably not by way of Petite Lane. 9 Mr Long then approached Mr Pincevic. On 10 July 1989 Mr Pincevic signed a letter which was prepared by Mr Long. It is addressed to the Town Clerk of Blue Mountains City Council and according to Mr Long it contained three paragraphs as follows: Re: Development of Shops at 5 Raymond Road, Springwood My company is the owner of Raymond Mall, which adjoins the above proposed commercial development. We believe that development of No. 5 Raymond Road in a manner that compliments our Mall will be beneficial to both owners as well as to the community as a whole. To this end we have no objection to shops within the proposed development fronting onto our property on the upper level and confirm that if shops are built in this manner, we shall remove the railing fence that presently stands adjacent to our common boundary. 10 The events leading to the signing of the letter are in dispute. The competing versions are as follows: 11 Mr Long claims that he telephoned Mr Pincevic on 9 July 1989 and explained what the Council was proposing. He said Mr Pincevic indicated that he agreed with the proposal and would sign a letter to the Council accordingly; he then prepared the letter and on 10 July 1989 drove to an address in Luddenham where Mr Pincevic signed it. 12 Mr Pincevic claims that Mr Long telephoned him and told him he was thinking of developing No.5 and spoke about glass fronts to the car park. Mr Pincevic says he was invited to Mr Long's office to discuss the proposal and there signed a letter which so far as he can remember contained only two paragraphs. He said that Mr Long never mentioned Mr Maher's desire for integration and he claims not to have understood that he would be required to remove the fence. He said he was expecting to see further plans. 13 The defence denies that the letter with the third paragraph was signed by Mr Pincevic. However, in an affidavit Mr Pincevic says that he can remember only two paragraphs. An expert document examiner, Ms Winter, in a report in evidence, gave the opinion that the paragraph was part of the original letter. In fact, the letter does not make sense without the paragraph. I find all three paragraphs were in the letter as signed. Counsel for the defendant did not submit to the contrary. 14 Both Mr Long and Mr Pincevic were experienced developers. The final paragraph of the letter is perfectly clear. If the shops did not front Raymond Mall there would be little point in removing the fence. The different versions about where the document was signed only came in oral evidence. Although Mr Long's story seems strange its very strangeness makes it likely it was correct, while Mr Pincevic's evidence about his visit to Mr Long's office and his having no earlier dealings with the office were I find untrue. I do not accept the evidence of Mr Pincevic about the conversation being about "glass fronts". There would have been no need to discuss location of windows, and the expression is unusual and is contrary to the terms of the letter. 15 I consider that Mr Pincevic made the representation that he would remove the fence and understood the consequences of that representation. 16 Development consent was granted on 25 October 1990. It contains the following conditions: 11. The existing metal fence located on the boundary between the subject site and Lot 25, D.P. 738228 to the south, shall be removed prior to occupation of the development. Such is to be in accordance with the letter submitted to Council and signed by Mr. Pincevic (Pincevic Nominees) owner of the adjoining site. 12. The development is to proceed in such a manner to ensure a satisfactory link with the adjoining development to the south. In this regard, floor levels of the proposed development will be designed to enable a level transition from the existing car park and accessway. 17 Mr Pincevic was not informed of the consent, nor was he shown the plans. Building did not begin until October 1996. No attempt was made to explain this delay, although it was noted that the consent as extended by legislation was valid for five years and had been extended for a further twelve months. 18 The development was completed in March 2000. It includes a row of shops facing the parking lot of Raymond Mall on its upper level. 19 Apparently towards the end of 1999 representatives from Edwather asked Mr Pincevic to remove the fence. He refused it seems because he claimed the letter of 10 July 1989 had been doctored to include the third paragraph. On 13 April 2000, the plaintiff employed labourers to remove the pipe fence. Mr Pincevic objected to this and promptly employed labourers to restore the fence. That fence is still standing. 20 Blue Mountains City Council has refused to grant certificates to allow occupancy of the shops facing the Raymond Mall car park; that is all but two of the shops in the new complex. 21 Mr Pincevic claimed that during the four years of building he had no idea that shops would be fronting onto the car park until doors were put in place. I do not accept this evidence. Photographs in evidence make it clear that fronts of the shops were obvious and that the window areas on Raymond lane were not shop entrance doors. As Mr Pincevic did know of the letter, I consider that he must have known that the development was being carried out in conformity with the letter. The arguments 22 At trial the plaintiff relied solely on an equitable estoppel it said derived from the letter of 10 July 1999. It claims that it had acted in reliance upon and induced by the letter to construct its building and it has sought appropriate relief. 23 The defendant relied on three arguments, firstly that Mr Pincevic never made the promise contained in the letter, secondly, that Mr Pincevic did not understand the consequences of the letter and thirdly, that some sort of counter-estoppel had been caused by Mr Long. I have found that the facts do not support the first two arguments. As to counter-estoppel, the defendant argued that Mr Pincevic assumed on signing the letter that he would be shown development plans and that he would need to give further approval before any development could be carried out incorporating his car park. He may have made that assumption. However, no evidence was adduced of any representation made by Mr Long, or anyone else acting on behalf of Edwather, to induce that assumption. It was never really suggested that Edwather knew Mr Pincevic had made that assumption or intended that he would make that assumption. There is simply no evidence on which an equitable estoppel preventing Edwather from relying on the letter can be established. 24 In summary I find that in the light of Mr Maher's expression of the Council's requirements, Mr Long approached Mr Pincevic seeking his approval of a plan to build shops facing his car park. Mr Pincevic gave that approval, along with a clear promise to remove his fence, on 10 July 1989. The assumption on which the estoppel is based was that the fence would be removed. The defendant clearly induced that assumption in the letter. Edwather acted in reliance on that assumption and spent over $700,000 building a shopping centre that is largely useless until the fence is removed. If the fence is not removed the plaintiff will continue to suffer detriment. Relief 25 This is one of the cases where it is necessary to order that the representation or promise be made good to do justice. In other words the defendant must not be allowed to resile from its promise of future conduct. In one way that may be the minimum required as the cost of completely changing the building so that it faced Raymond Lane would undoubtedly be great even if Council's consent could be obtained. While the plaintiff gave no consideration to the defendant company, it is not certain no benefit flowed. Mr Pincevic wanted the site developed and he may well have thought this would result in increased trade for his shops. What result the removal of the fence will have is not known. The Mall is owned by Pincevic Nominees. On what basis it could be said that owner was required to provide free parking to all comers I do not know. 26 The plaintiff sought a mandatory order for removal of the fence and damages. I directed that any question of damages be determined separately and after the other issues. I do not understand that damages would be ordered in equity in a claim founded on estoppel. It may be however that it would be a proper discretionary remedy to order equitable compensation for loss of income since the building was completed. That is not absolutely certain in view of the lack of consultation over a period of nearly ten years. There would be some difficult questions arising in any event in determining compensation as the right to access to the defendant's property is by no means certain. It is probably best that I determine the remaining issues. For that reason rather than refer the matter to a Master I will determine any further questions on a date to be fixed. 27 Orders 1. The first defendant remove the fence on the boundary between the plaintiff's property at 5 Raymond Road, Springwood and its property, Raymond Mall, Springwood within fourteen days. 2. The first defendant pay the plaintiff's costs of the proceedings to date. 3. The action be listed for mention on 26 March at 9.30 am to give directions for the further hearing. ********** Last Modified: 01/03/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.