LAWS1204 Final: contract case notes
I. ESTOPPEL
Case
Topic and facts
Principle/significance
Priestley v Priestley
[2017] NSWCA 155
Purpose of estoppel
Proprietary estoppel
The scope of equitable
estoppel is now quite
broad.
Facts:
Emmett JA: “The purpose of the doctrine of estoppel
is to avoid or prevent a detriment to the party
asserting the estoppel by compelling the opposite
party to adhere to an assumption upon which the
former acted or abstained from acting.” “… the
fundamental purpose of equitable estoppel is to
protect a person who acts to her or his detriment
from the detriment that would flow from resiling
from a promise or representation”
Grundt v Great
Boulder Pty Gold
Mines Ltd (1937) 59
CLR 641.
Basic principle/concept of
estoppel
Elements: inducement
Facts:
“[T]he basal purpose of the doctrine … is to avoid
or prevent a detriment to the party asserting the
estoppel by compelling the opposite party to adhere
to the assumption upon which the former acted or
abstained from acting”
Inducement relates to the role played by the
representor in the relying part’s adoption of the
assumption – Dixon J “before anyone can be
estopped, he must have played such a part in the
adoption of the assumption that it would be unfair or
unjust if he were left free to ignore it”.
Thompson v Palmer
(1933) 49 CLR
Elements: Detrimental
reliance
Detriment is the key aim
of estoppel
Facts:
[547] ‘Whether a departure by a party from the
assumption should be considered unjust and
inadmissible depends on the part taken by him in
occasioning its adoption by the other party.
Dixon J: “The object of estoppel … is to prevent an
unjust departure by one person from an assumption
adopted by another as the basis of some act or
omission which, unless the assumption be adhered
to, would operate to that other’s detriment.”
Arfaras v Vosnakis
[2016] NSWCA 65
Facts:
Central London
Property Trust v High
Trees House Ltd
[1947] KB 130
Revival of promissory
estoppel
Facts: dispute over rent
price of property in WW2
Waltons Stores
(Interstate) Ltd v
Maher (1988) 164
CLR 387
Equitable estoppel
Elements: assumption,
knowledge, inducement
Facts: demolished their
building and commenced
construction in reliance on
the assumption that the
lease had or would be
executed by Waltons – the
Waltons were estopped
from denying the
existence of a binding
contract and were bound.
6 elements of estoppel (Brennan J)
• Assumption: The assumption must relate to a
legal relationship
• Inducement: Normally the assumption will be
induced by an express representation. But an
express promise is not required. It can be
implied – “[p257**]”
• Knowledge: Brennan J – the representor must
know that the relying party has acted or will act
or refrain from acting to their detriment in
reliance on the assumption that the lease had or
would be executed by Waltons.
Established that estoppel could be used as both a
shield and a sword; estoppel could prevent the
enforcement of legal rights, in response to a suit
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brought by the representor against the relying party,
where to do so would be a departure from an
assumed state of affairs, and also serve as a cause of
action for the relying party against the representor
Recognised that a pre-existing legal relationship is
not necessary to support an action in promissory
estoppel.
Legione v Hateley
(1983) 152 CLR 406
Elements: representation
Facts: land dealing, the
purchaser wished to delay
completion, the secretary
told the purchaser’s
lawyer that the delay
should be all right but that
she’ll need instructions.
The vendors rescinded and
purchasers sued.
The doctrine of promissory estoppel was first
authoritatively accepted by the High Court
Representation:
Representation not unequivocal; had not induced the
relying party to rely.
Deane J: “the requirement that a representation as to
existing fact or future conduct must be clear if it is
found an estoppel in a promissory estoppel does not
mean that the representation must be express.
The High Court held that the vendors were not
estopped from their rescission
Cosmopolitan Hotel v
Crown Melbourne
[2014] VSCA 353
Elements: Reasonableness
(limitation on doctrine of
estoppel), Representation
Facts: Cosmopolitan
operated 2 restaurants in
Crown’s casino. Crown
gave notice for the
respondents to vacate the
premises upon the leases
expiring. But Crown had
made several oral
statements implying that
the leases would be
renewed with phrase
‘looked after’.
Whelan CJ: “If there is a ‘grey area’ in what is
represented or promised, but it was reasonable for
the representee to interpret it as extending at least to
the lower limit of that ‘grey area’ and to act in
reliance on it as so understood, the Court should
regard the representation or promise as sufficiently
certain up to this lower limit.”
Representation: where there is a high level of
ambiguity in the representation, this will not be
sufficient to give rise to an estoppel
Hawker Pacific Pty
Ltd v Helicopter
Charter Pty Ltd (1991)
22 NSWLR 298
Elements: detriment
Facts:
Forms of detriment: The detriment must be
something of value
Contrast between consideration and estoppel (where
the loss must be more significant to constitute a
detriment)
Australian Financial
Services and Leasing
Pty Limited v Hills
Industries Limited
(2014) 253 CLR 560
Elements: Detriment
Facts: ‘change of position’
defence (requires
detriment) to the
repayment of money paid
by mistake. AFSL was
induced to make payments
to Hills by one of its
customer’s fraud.
Possibility of a detrimental change of position being
grounds for estoppel if other elements required for
estoppel were present.
Ashton v Pratt (No 2)
(2015) 88 NSWLR
281
Elements: detrimental
reliance
Money and other goods received in exchange for
service. No detriment by not returning to the escort
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Facts: Ashton provided
Pratt with escort services.
Pratt allegedly promised
Ashton a large amount of
money in return for her
not returning to the escort
industry and being his
escort. Pratt died and
Ashton brought
proceedings against his
estate.
business and becoming Pratt’s mistress.
Accordingly, there was no detriment.
Sidhu v Van Dyke
(2014) 251 CLR 505
Elements: detrimental
reliance
Proprietary estoppel
Facts: A man made
promises to his brother-in-
law’s wife during their
affair. She relied on these
promises to her detriment
and later successfully sued
him.
Loss of detriment can be loss of opportunity
(employment/wage) – just must be substantial “The
respondent at all times bore the legal burden of
proving that she had been induced to rely upon the
appellant's promises.”
The onus of proof remains on the relying party who
is alleging the estoppel to show detrimental reliance.
Proprietary estoppel: promises to land were
repeatedly made and relied upon under a burden.
Reinforced the principles in Giumelli
Trident General
Insurance Co Ltd v
McNiece Bros Pty Ltd
(1988) 165 CLR 107
Facts: **
Estoppel arises where the doctrine of privity
prevents a third party to the contract from enforcing
it at [145].
Commonwealth v
Verwayen
Elements: unconscionable
conduct, detriment,
knowledge.
reasonableness
A unified doctrine?
Facts: **
Estoppel found in favour
of the respondent
McHugh J: “the equitable doctrines result in new
rights between the parties when it is unconscionable
for a party to insist on his or her strict legal rights.”
The detriment need not be financial (the detriment
was the lost opportunity to proceed with a
negligence claim without the Cth pleading the
statute of limitations as a defence in this case)
Knowledge: the Cth was aware that Verwayen was
continuing representation that it would not pleade
the statute of limitations.
Giumelli v Giumelli
Also, Waaka v
Francois [2017]
NSWSC 744; Behman
v Behman [2016]
NSWCA 295
Proprietary estoppel
Facts: Parents made
promises to a son that if he
gave up his career and
moved onto their property
that they would give him
some of the property at a
later stage. The son later
married a woman of whom
his parents disapproved.
The parents retracted their
promise. The son
successfully sued.
The representor should be estopped from resiling
from a promise to give a portion of land
notwithstanding the boundaries of the proposed land
were not precisely defined.
• The doctrine of consideration has often been seen as leading to injustices.
• The equitable doctrine of promissory estoppel evolved to overcome many of these injustices.
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Document Summary
The scope of equitable estoppel is now quite broad. Facts: dispute over rent price of property in ww2. Facts: demolished their building and commenced construction in reliance on the assumption that the lease had or would be executed by waltons the. Waltons were estopped from denying the existence of a binding contract and were bound. [t]he basal purpose of the doctrine is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting . [547] whether a departure by a party from the assumption should be considered unjust and inadmissible depends on the part taken by him in occasioning its adoption by the other party. 6 elements of estoppel (brennan j: assumption: the assumption must relate to a legal relationship. Inducement: normally the assumption will be induced by an express representation.
