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Reliance and expectation in estoppel remedies

Published online by Cambridge University Press:  02 January 2018

Andrew Robertson
Andrew Robertson*
Affiliation:
University of Canberra
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Extract

The word ‘estoppel’ had its origins in the old French word ‘estoup’, meaning plug or stopper. The principle of estoppel by representation of fact operates in a manner which is consistent with those origins. Where a representation of fact is relied upon by a representee, the effect of the estoppel is to stop up the mouth of the representor, and prevent him or her from asserting facts contrary to his or her own representation. The rights of the parties are then determined by reference to the represented or assumed state of affairs. An estoppel by representation of fact can be used defensively, where an action which would otherwise be available to the plaintiff is not available on the assumed state of affairs. It can also be used aggressively, to establish a state of affairs in which a cause of action exists, where that cause of action would not be available on the true state of affairs.

Type
Research Article
Information
Legal Studies , Volume 18 , Issue 3 , September 1998 , pp. 360 - 368
Copyright
Copyright © Society of Legal Scholars 1998

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References

1. Brown, L (ed) The New Shorter Oxford English Dictionary on Historical Principles (1993) vol 1, p 854.Google Scholar

2. G Spencer Bower and A Turner The Law Relating to Estoppel by Representation (London: Butterworths, 3rd edn, 1977) p 112, cited with approval in Avon County Council v Howlett [1983] 1 All ER 1073 at 1087 (Slade LJ).

3. In Avon County Council v Howlett [1983] 1 All ER 1073, for example, a cause of action for moneys had and received would have been available to the plaintiff had it not represented to the defendant that he was entitled to the money in question. The effect of the plaintiff being held to the assumed state of affairs was that no action was then available.Google Scholar

4. In Waltons Stores (Interstate) Lid v Maher (1988) 164 CLR 387 at 463–464, for example, Gaudron, J (like the trial judge and the Court of Appeal below) held that an estoppel arose at common law which prevented the defendant from denying that it had entered into an agreement with the plaintiffs. The rights of the parties were, therefore, determined on the basis of the assumed state of affairs and the plaintiffs were able to maintain an action on the agreement which would not otherwise have been available. Other prominent cases in which common law estoppel has been used to establish a cause of action include Seton, Laing, & Co v Lafone (1887) 19 QBD 68 (conversion) and Laws Holdings Pty Ltd v Short (1972) 46 ALJR 563 (debt).Google Scholar

5. See eg Hughes v Metropolitan Railway Co (1877) 2 App Cas 439; Birmingham and District Land Co v London and North Western Railway Co (1888) 40 Ch D 268; Central London Property Trust Ltd v High Trees House Ltd [1947] 1 KB 130; Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India Ltd [1990] 1 Lloyd's Rep 391 at 399; and Spencer Bower and Turner above n 2 pp 395–400; Treitel, G H The Law of Contract (London: Sweet and Maxwell, 9th edn, 1995) pp 106–107.Google Scholar

6. See Robertson, A ‘Satisfying the Minimum Equity: Equitable Estoppel Remedies after Venwayen ’ (1996) 20 Melbourne University LR 805, 809–820.Google Scholar

7. Eg ‘ Unity Joint Stock Banking Association v King (1858) 25 Beav 72, 53 ER 563; Re Whitehead [1949] NZLR 1066; Hussey v Palmer [1972] 1 WLR 1286; Morris v Morris [1982] 1 NSWLR 61.Google Scholar

8. Raffaele v Raffaele [1962] WAR 29 at 33, in which damages assessed on a restitutionary basis were awarded for breach of a contract or ‘notional contract’ arising by way of proprietary estoppel.

9. Two commentators have suggested that D'arcy, J erred in awarding damages on a restitutionary basis in Raffaele, and that damages should have been assessed on a reliance basis or an expectation basis: Allan, D ‘An Equity to Perfect a Gift’ (1963) 79 LQR 238, 239 (n 7); K C T Sutton Consideration Reconsidered (Brisbane: University of Queensland Press, 1974) p 67 (n 118).Google Scholar

10. Fuller, L L and Perdue, W R ‘The Reliance Interest in Contract Damages: 1’ (1936) 46 Yale LJ 52.CrossRefGoogle Scholar

11. See Robertson above n 6.

12. See Robertson, A ‘Situating Equitable Estoppel within the Law of Obligations’ (1997) 19 Sydney LR 57.Google Scholar

13. Ibid; a Robertson ‘towards a Unifying Purpose for Estoppel’ (1996) 19 Monash University LR I.Google Scholar

14. [1976] 1 Ch 179 at 198.Google ScholarPubMed

15. .(1990) 170 CLR 394 at 413 (Mason CJ), 430 (Brennan J), 454 (Dawson J), 475 (Toohey J), 501 (McHugh J).Google Scholar

16. Ibid. at 413–416.

17. See eg ‘ Baker vBaker (1993) 25 HLR4 08 at 412 (Dillon LJ),415 (Beldam LJ), 418 (Roch LJ).Google Scholar

18. See eg Wayling v Jones (1995) 69 P & CR 170.Google ScholarPubMed

19. C Davis ‘Estoppel–Reliance and Remedy’ [1995] Conveyancer and Property Lawyer 409, 415. A similar claim has been made by P S Atiyah ‘Contracts, Promises, and the Law of Obligations’ in P S Atiyah Essays on Contract (Oxford Clarendon Press, 1986) pp 10, 55–56.

20. Oughten, R D ‘Proprietary Estoppel: a Principled Remedy’ (1979) 129 NLJ 1193.Google Scholar

21. (1996) 72 P & CR 196.Google ScholarPubMed

22. (1990) 170 CLR 394 at 413.Google Scholar

23. Hobhouse, Lj interpreted this to mean ‘Little more than that the end result must be a just one having regard to the assumption made by the party asserting the estoppel and the detriment which he has experienced’ ((1996) 72 P & CR 196 at 208–209).Google Scholar

24. Pawlowski, M ‘Proprietary Estoppel - Satisfying the Equity’ (1997) 113 LQR 232, 236–237.Google Scholar

25. Cooke, E ‘Estoppel and the protection of expectations’ (1997) 17 LS 258.Google Scholar

26. Ibid 280.

27. (1988) 164 CLR 387 at 429 (where Brennan J first articulated the reliance—based approach to relief).Google Scholar

28. See eg P Birks An Introduction to the Law of Restitution (Oxford: Clarendon Press, 1985) p 293; A S Burrows ‘Contract, Tort and Restitution - A Satisfactory Division or Not’ (1983) 99 LQR 217, 243.

29. See Robertson above n 12 and above n 13.

30. See Robertson above n 6.

31. Above n 25 at 281–282.

32. For a detailed examination of that approach, see Robertson above n 6 at 820–846.

33. See Robertson above n 12 at 57–60.

34. Above n 25 at 283, citing in support B Mescher ‘Promise Enforcement by Common Law or Equity’ (1990) 64 AW 536, whose arguments are critically examined in Robertson above n 12 at 50–52.Google Scholar

35. See H Collins The Law of Contract (London: Butterworths, 2nd edn, 1993) pp 71–72.

36. See Robertson above n 12 esp at 44–45 and 52.

37. Above n 25 at 59–64.

38. See Parkinson, P ‘Equitable Estoppel: Developments after Waltons Stores (Interstate) Ltd v Maher’ (1990) 3 J Contract Law 50, 59; P D Finn ‘Equity and Contract’ in Finn, P D (ed) Essays on Contract (Sydney: Law Book Co, 1987) pp 104, 122; Robertson above n 12 at 48–49.Google Scholar

39. In Lyndel Nominees Pty Ltd v Mobil Oil Australia Ltd (1997) 37 IPR 599, for example, Wilcox J appeared to regard expectation relief as the only relief which could be granted to give effect to a promissory estoppel, and found that no estoppel could arise in that case because the detriment suffered by the claimants was not proportional to the value of their expectations.Google Scholar

40. Above n 25 at 280–281, 285.

41. The cases reported up to the end of 1995 are surveyed in Robertson, above n 6 at 829–836. Expectation relief has since been granted in Blazely v Whiley (1995) 5 Tas R 254 (claimant granted specific performance of an anticipated contract of sale); W v G (1996) 20 Fam LR 49 (claimant awarded monetary compensation on an expectation basis for the loss of financial assistance from the estopped party in raising children); Giumelli v Giumelli (1996) 17 WAR 159 (promisors ordered to transfer the promised land to the promisee - the High Court has granted special leave to appeal this decision); Forbes v Australian Yachting Federation Znc (1996) 131 FLR 241 (representor ordered to compensate representees for expenses incurred in replacing promised equipment); Woodson (Salesj Pry Lrd v Woodson (Ausr) Pry Lrd (1997) 7 BPR 14,685 (Santow J proposed making an order which would have the effect of fulfilling the promisee's expectation of a sale of trust property in a fair and equitable manner). There have been at least two unreported cases in which reliance loss has been compensated: Adore v Blenkinsop Nominees Pry Ltd (unreported, Supreme Court of Western Australia, Malcolm CJ, 1 September 1993), discussed in A Beech ‘The Remedy for Estoppel: Identifying and Preventing Detriment’ in R Carroll (ed) Civil Remedies: Issues and Developments (Sydney: Federation Press, 1996) pp 156, 179–182 and Public Trustee, as Administrator of the Estate of Williams (dec'd) v Wadley (Full Court of the Supreme Court of Tasmania, Wright, Crawford and Zeeman JJ, 27 June 1997), discussed below.Google Scholar

42. For a discussion of three cases since Commonwealth v Venvayen in which a more limited remedy arguably ought to have been granted, see Robertson above n 6 at 830–833.

43. Ibid at 833–834.

44. [1994] 2 VR 333 at 342.Google ScholarPubMed

45. [1979] 2 All ER 945.Google Scholar

46. Above n 6 at 844.

47. Full Court of the Supreme Court of Tasmania, Wright, Crawford and Zeeman JJ, 27 June 1997 (available on the internet at http://www.austlii.edu.au/do/disp.pVau/cases/tas/supreme_ct/unrep890.html).

48. Above n 19 at 60.

49. For a particularly clear example, see Robertson above n 6 at 827.