Contracts - case-reading notes - Waltons Stores v Maher PDF

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Contracts LAWS3040/6140 Semester 1, 2020

Waltons Stores v Maher: Case-Reading Notes for video

Intro/initial matters I’ll walk you through the judgments. I’ll give two options to pause – I recommend that you read each section first and then continue the video in order to hear more about the important questions and comments – and then read through the section again, with the questions and comments in mind. But if you’re pressed for time, you could listen to the questions and comments first and then read through the section. Remember, in reading each case we’re trying to do several important things. Among them are these. First, we’re trying to work out, from the text in the judgments, what the rules are. That is, in the common law, there are typically fairly clear rules about each area of law … but they often aren’t written out clearly (as in: “Here’s the rule: x”). So instead, we have to work out the rule. Second, we need to be working on understanding the importance of the facts of each case. Students often want to jump ahead to the rule – and indeed, that’s why some students skip reading the cases altogether and just look up the rule online (“Easy peasy, here’s the rule!”). But using the common law is a two-step process. In order to determine in every instance (whether a law school assessment or for a real-life client) whether a given rule applies to a given situation, we need to know not only the rule itself but also what result that rule mandates to those facts. Waltons Stores v Maher is an excellent example. Waltons Stores is about estoppel. Our job here is complicated by the fact that there exist several different kinds of estoppel (ie, they have different tests and different consequences). And to make matters worse, the different judges refer sometimes in their judgments to the same kinds of estoppel by different names. But we’ll survive! Here, we want to be thinking about:  what is estoppel?  what are the different kinds of estoppel?  what are the different factors that trigger the different kinds of estoppel, and what are the consequences (remedies) of the different kinds?  last but not least, why is this case significant? That is, in what way or ways does it change estoppel as it had existed in Australia up until this time? This is a big case. We’ll go through it in much more detail than many of our other cases, so don’t be daunted, many of the others will be much easier … and quicker! Ok, there are several judgments here. Let’s take them in order. MASON AND WILSON Section 1: Read the first sentence. [here we can read it together]

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Contracts LAWS3040/6140 Semester 1, 2020

What is this? The issue! So this tells us what the whole case is about. Think also in IRAC terms … here is our I. Note also that this judgment is quite well structured. After this ‘I’ of IRAC, Mason and Wilson then give us the facts. Then they describe the general state of the law [this would be the R in our IRAC]. And then their final section applies the facts to the law [voilà, our A section], wrapping up with a C/conclusion. Section 2: We’re going to divide Mason and Wilson’s summary of the facts into two sections. So first, read to the middle of 395, where it says “building was complete as to 40%”. [optional pause] This is the main body of the facts. Here we’re interested in what happened in the case. (Before we start thinking about the law, we need to understand the story … how did it start, what went wrong?) As always – and here is a good example – it’s important to have a good understanding of parties and dates, parties and dates (sounds like a bad Beevis and Butthead joke!). To begin with, in order to make sense of all this, we need to be clear on who the appellant is and who the respondent is. Since this is our first case, I’ll help us along: the appellant is Waltons Stores … and their solicitor is Roth from Dawson Waldron. The respondents are Mr and Mrs Maher … and their solicitor is Elvy from Morten and Harris. Now:  why were Waltons Stores and the Mahers negotiating with each other? what did each want/what was each getting out of the deal?  what were the key communications between the parties? o in particular, what was so important in the covering letter that Dawson Waldron sent to Morton & Harris (on 7 November)?  also of importance, what was going on with the timing – why was Waltons Stores in a rush to build? Why were the Mahers in a rush to finalise the agreement?  what happened with the progress of the building? why did Waltons Stores delay in ending the relationship? [optional pause] Section 3: Read through 398 [optional pause] This is all about the so-called exchange of contracts. First of all, why was there no contract here? Second, what’s the whole issue about the exchange – why was that relevant? What is the conclusion of Mason and Wilson about the relationship between the exchange and why there was no contract? [optional pause] Page 2 of 5

Contracts LAWS3040/6140 Semester 1, 2020

Section 4: Read from 399 through 406 (well, really, to the end of the big paragraph in 406) [optional pause] This is where Mason and Wilson set out the general law of estoppel, as it existed up to this case. What do they say:  about whether a party claiming estoppel needs to be in a pre-existing contractual relationship?  about the traditional notion of estoppel being a shield and not a sword?  about issues of offer, acceptance and consideration in regard to estoppel?  and about reliance? [optional pause]

Section 5: Read from the last two sentences of 406 (“The application of these principles to the present case is not without difficulty. But the crucial question remains: was…”) Read through 408. [optional pause] This is the application section. They first frame the issue: “was [Walton Stores] entitled to stand by in silence when it must have known that the respondents were proceeding on the assumption that they had an agreement and that completion and exchange was a formality?” What do they say about the usual rule in regard to the exercise of a legal right? What two facts do Mason and Wilson say are the keys here – that cause this case to be different? And according to Mason and Wilson, when did Waltons Stores have an obligation to notify the Mahers? What is their ultimate Conclusion on the Issue that we started the judgment with (in the first sentence)? [optional pause]

BRENNAN Note: as I said, one of the confusing aspects of estoppel is that there are several names for the same concepts. Here, Brennan refers to “estoppel in pais” – this is the same as “common law estoppel” that is referred to in other of the judgments. Section 1: Read 412 and the first two sentences of 413. [read the second sentence of 413 with the students: “The first is an expectation by Mr Maher that Waltons would duly complete the exchange; the second is an assumption by Mr Maher that Waltons had

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Contracts LAWS3040/6140 Semester 1, 2020

duly completed; the third is an assumption by Mr Maher that there was a contract whether or not exchange had been completed.”] This is yet another example of the importance of the facts. Here, the outcome of the case is dependent on how one characterises this issue of exchange. Brennan is suggesting that there are three possible ways of doing so based on what we know of the facts. And each different characterisation potentially leads to a different outcome (by “outcome” I mean who wins and who loses in the case). Although not clearly stated by Brennan, this is the I in our IRAC. Section 2: Now read through almost the end of 417. [optional pause] Here Brennan is describing the two kinds of estoppel that might be at issue in the case. [This would be the R in our IRAC.] [optional pause]

Section 3: Read almost to the end of 430 [optional pause] This is a loooong discussion of the first of the three possibilities that Brennan is interested in. Here he is doing the A of the IRAC: he’s saying, IF the facts are such as I’ve presented them in what he calls the “first basis”, THEN the law will apply to them thus and the outcome will be thus. In particular:  which estoppel does he say applies here?  what is the relationship between silence and inducement, especially in 423 and 427?  what is the expansion in the law that he writes about in 426 and 427? [optional pause] Section 4: Re-read the last paragraph of 429 and then 430 [optional pause] What is the conclusion that Brennan reaches here and why?

[optional pause]

Section 5:

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Contracts LAWS3040/6140 Semester 1, 2020

Read through 433 [optional pause] These are the other two possible interpretations of the facts, according to Brennan. But he rejects both of them. Why? [optional pause] the judgments of DEANE and then also of GAUDRON After all the intellectual heavy-lifting that we’ve been doing, these two judgments are interesting but don’t add tons. Have a skim through them to see how they fit with your understanding of estoppel from the prior judgments (Deane is happy to expand estoppel (on what grounds??) and Gaudron is more focused on a certain interpretation of the facts. In particular, have a look and a think about what Deane says about detriment at the end of 442 and then 443.

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