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4 Equitable Estoppel

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Queensland University of Technology

IV EQUITABLE ESTOPPEL • Equity will estop a party from enforcing strict legal rights or resiling from a certain position (ie changing their mind) where it would be unconscionable to do so. Old Classification Proprietary Estoppel = A party will be estopped from denying another an interest in property where he/she has either encouraged that other person to act to their detriment in relation to that land or acquiesced with knowledge in those actions. • The purpose of proprietary estoppel is to act as a defence (acts as a shield) but it also creates equities (acts as a sword) – it acts upon the conscience of the representor. Estoppel by acquiescence • Passive representation or acquiescence (standing back and letting someone do an act and not saying anything) • Acquiescence and mistaken expenditure: Ramsden v Dyson (Eg where you build a house on someone else’s property and the person who owns the land sees you building the house and doesn’t say stop and that they own the land. The person who builds the house and made the mistaken expenditure, believing that they own the land, can then raise an estoppel – the true owner is denied from asserting their legal ownership). • Imperfect gifts arise where someone is encouraged to spend money on property believing they would be given ownership of the property (eg build a house on this property son, and one day it will be yours): Dillwyn v. Llewlyn Estoppel by encouragement • Actively encourage someone to believe that they will get a right to use the land (active representation) See also Re Basham; Riches v Hogben (grandmother telling family to move to Australia—will give them the house  granny flat to be given to mother) • Remedy for proprietary estoppel is the minimum equity to do justice – it could mean holding the representor to their representation. He/she who seeks equity must do equity. Promissory Estoppel = A party will be estopped from insisting upon his/her strict legal rights where he/she has led the other party to believe that there would not be an insistence on those rights and detriment would result if the rights were now enforced. • In Walton Stores one party led the other to believe that there was a K in existence. Because they led them to believe that, the other party relied on that, acting to their detriment. They were held to that assumption (it created a contractual obligation). • The equity arises if there are representations by inducement, encouragement or expectations. There also needs to be reliance and detriment. • Before Walton Stores it was necessary for parties to be in a preexisting legal relationship (ie there had to be a contract). Andrew Trotter LWB240 Principles of Equity • Remedy is as for proprietary – minimum equity to do justice and he/she who seeks equity must do equity. • An equitable lien is a charge enforceable in equity attaching to property to secure an order for equitable compensation (see Giumelli). Current Doctrine • One general principle in equitable estoppel: Walton Stores • It is both a sword and a shield Giumelli o As a sword—can create independent legal obligations, equities, interests in land. o As a shield—it acts as a defence.  Confirmed in Giumelli Elements Requirements by Brennan in Walton Stores v Maher for Equitable Estoppel 1. Assumption & expectation by A 2. encouraged or induced by B 3. Relied upon by A 4. Knowledge or intention of such reliance by B 5. Detriment suffered by A 6. Failure to avoid detriment by B These Rules have been cut down into 4: Giumelli v Giumelli 1. Representation 2. Reliance 3. Detriment 4. Unconscionability (1) Representation • Clear and unambiguous: Legione v Hateley o Level of certainty greater than contractual undertaking • Can be about present, future acts or intention, statements of law • Cannot be clear and unequivocal if important information is omitted: Mobil Oil v Lyndel o However, assumption may be inferred t
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