Douehi V Construction Technologies Australia Pty Ltd (2016) NSWCA 105

COMMERCIAL AND CORPORATION LAW 1
COMMERCIAL AND CORPORATION LAW
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COMMERCIAL AND CORPORATION LAW 2
Douehi V Construction Technologies Australia Pty Ltd (2016) NSWCA 105
Introduction
The case addresses the issues of equity while clarifying the distinction between categories of
equitable estoppel. It shows how parties can have estoppel available to them when other claims
may not succeed. However, equity requires that the claimant comes with clean hands.
Facts of the case
The parties to the case were individuals, most who were related, in purchasing a property in
seven Hills so that they could accommodate the interests of Construction Technology Australia
Pty Ltd with the associates of the business. The major shareholder of CTA, Mr. Hogan, was
married to Mrs. Hogan, who was the sister to one of the purchasers and a daughter to another.
Mr. Hogan was the driving force to the purchasing of the properties (Hillman, 2012, p. 8-19).
The intentions were that the tenants of the property would be Marble Plus Pty Ltd and CTA. Mr.
Hogan in addition to marrying from Mrs. Hogan was also involved with the family members in
many other businesses dealings. The co-owners were used to purchasing properties then leasing
to their companies. In practice, they could agree on the terms of leasing but did not make any
formal agreements. The agreements were upheld by the ‘honor of the family (Einseberg, 2018.
P.131).
In the purchasing, planning, selection and the subsequent design of the Seven Hills property, Mr.
Hogan was involved. During this period, the terms of CTA's lease with Mr. Hogan were
discussed with Doueihi. An agreement existed which had the terms of renting and Doueihi was
advised that CTA required a five-year option with to justify the fit-out of the expenditure. 2010-
2011 was when the installation of the plant was taking place. The parties understood the

COMMERCIAL AND CORPORATION LAW 3
significance and the difficulties of removal of the fit out for CTA if necessary (Stone
Devenney,2017, p.105). Also, the significant cost was understood by all the parties involved. Mr.
Horgana and the wife later separated and in light of this, the co-owners refused to formalize the
lease with Mr. Hogan. They gave a counter-offer requiring an increase of 40% rent and a shorter
term lease. In November 2012, the owners of CTA started a suit after the co-owners wanted to
quit CTA.
On the lower court, White J held that CTA benefited from equitable estoppel and there was a
lease between the parties involved in the case. White J then went ahead to make orders that CTA
takes steps to obtain regulatory approvals and the first and fourth defendants to take necessary
steps to give a lease to CTA; a five-year lease with a renewal option (Burnham, 2011, p.63). The
court gave CTA a right to exclusive ownership of the premises. The defendants were then
ordered to execute a lease in favor of CTA. On appeal, the appellants sought to know whether
proprietary estoppel involving marriage could become a commercial lease dispute. The supreme
court lead by Gleeson J upheld the decision by the lower court.
Issue in the Lower Court
The Issue before the court was whether a binding agreement existed between CTA and
consequently denying the landowners from denying the lease by equitable estoppel.
Decision
The court held that the parties not formalizing the agreements showed that they had no intention
of being bound. Following the separation of Mr. and Mrs. Hogan, the parties agreed that a formal
agreement was not in existence. However, the court found that there was equitable estoppel by