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Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 (CB p227) Facts: -

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W negotiated for some months with M for the grant of a lease over property owned by M M would demolish the existing building and erect a new one fitting W’s requirements for them to occupy Agreement reached on terms and rent W Solicitor sent draft lease to M solicitors on 21 OCT - Changes were discussed and accepted by W to the lease - Revised lease sent from M to W NOV, M informed W that demolition had begun and it was important to conclude lease ASAP before Xmas shutdown Late NOV, W didn’t really want the lease and was informed that they were not bound by agreement, instructed solicitors to go slow Early JAN, M started construction of the new building, however later that month W informed M that it did not wish to proceed - Approx.. 40% of building work was complete M sought to enforce the agreement

Findings: -

TJ held in favour of Maher Court of Appeal held in favour Maher

Discussion: -

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Maher could rely on promissory estoppel which extends to representations as to a future conduct Although in these circumstances, equity intervenes as it would be unconscionable conduct on Waltons’ part to ignore the assumption Element of urgency and M executed and forwarded on 11/11 and assumed that execution by W was formality - Both factors impact Waltons’ conduct and made it unconscionable Waltons under obligation to communicate with Maher within a reasonable time and certainty when it heard of the demolition - Since they didn’t, their inaction constituted clear encouragement for Maher to continue and as such was estopped from withdrawing from its implied promise to complete their end of the promise

1. Inducement - Waltons solicitors drew up the draft of the lease, and the reason for talking to Mahers in the first place, “believe approval will be forthcoming and will let them know if it isn’t tomorrow” 2. Assumption - Maher that waltons would enter the agreement 3. Detrimental Alliance 4. Unconscionability - inaction by Waltons to do anything → the next day and when they know the demolitions being done 5. What relief did the court make available? -

Mobil Oil Australia Ltd v Wellcome International Pty Ltd (1988) 81 FCR 475 (CB pp63-66) FACTS: Mr Stumbles, who works for Mobil, told franchisees that Mobil was seeking to implement a ‘tenure for performance’ scheme whereby if franchisees received over 90% in the ‘Circle of Excellence’ incentive in each of the six years following 1991, they would be granted a nine-year renewal of their franchise without cost. Several franchisees achieved this score in the four years following this announcement. In 1994, Mobil retracted the scheme. 154 franchisees commenced proceedings against Mobil, claiming relief on the basis of breach of contract, equitable estoppel or misleading or deceptive conduct. At trial, Wilcox J held that franchisees were not entitled to a renewal of their franchises on the basis of promissory estoppel. The detriment the franchisees had suffered in reliance on Mobil’s promise did not justify holding Mobil to its promise - the relief claimed was disproportionate to the detriment suffered. Trial judge held that the franchisees were entitled to the contract claim of renewal, which Mobil Oil appealed to the Full Court. On appeal, the franchisees filed notices of contention in respect of dismissal of the estoppel claims. DISCUSSION ON ESTOPPEL R.e. Principles of Estoppel: The Court finds that ‘it is a necessary element of the principle that the defendant has created or encouraged an assumption that “a particular legal relationship” or “an interest” would arise or be granted by the respondent if certain things are done or not done by the applicant in reliance thereon and that it is contrary to good conscience for the defendant to depart from the assumption’ [3.80] ‘[promissory estoppel] is intended to relieve against the detriment suffered and not to make good an expectation’ [3.85]

Issue in present case: ‘whether the statements as to the one-for-one and nine-for-six proposals were sufficiently unqualified, firm and specific so as to induce an assumption that a ‘particular legal relationship’ would be established…’ Held: -

The incentive scheme was too generalised to give rise to an expectation/assumption Essential elements and details lacking, no specific details relating to duration or terms, no provision made as to any criteria for eligibility etc The detriment suffered by the franchisees in aiming to achieve 90% (hiring new staff, cleanliness, uniforms, advertising and promotion etc) was disproportionate to the relief sought. ‘Much of the expenditure and efforts were of a nature which might reasonably be expected to lead to increased profitability and efficiency in day-to-day operations…’

Conclusion: There was no assurance or promise for either the one-for-one or nine-for-six incentives which activated the principles of estoppel. No detriment was suffered which would attract the application of estoppel. The applicants have not made out any estoppel case against Mobil. the promise from Mobil regarding the nine-for-six scheme was insufficiently certain, and the franchisees could not prove detrimental reliance on the promise.

6. Inducement - to vague on specific performace 7. Assumption - to vague and no real promise 8. Detrimental reliance - was not really to their detriment, as even though they did put in some money in training this would have made profit for the companies. 9. Unconscionability 10. What relief did the court make available? - no relief

Giumelli v Giumelli (1999) 196 CLR 101 (CB p238) Facts -

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Robert Giumelli was a partner in a family orchard business. Operates on two properties owned by his parents. Alongside other family members, Robert worked to improve and develop one of those properties, Dwellingup property. Partnership paid for everything (materials and contractors) for improvement but Robert worked without wages. He did work with a little pocket money and credited with earnings in the partnership accounts. Three promises made by parents to Robert

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1. 1974: would be given part of the Dwellingup property to compensate him for working without wages and for developing the property. Trial judge labels this as the ‘general promise’. 2. 1980: when planning to marry, parents promise he could build a house on the Dwellingup property 3. 1981: if he stayed on the property and rejected the offer of work from his father-in-law, he would be given a subdivided part of the Dwellingup property. This includes the house and orchard. Married and divorced. Robert then sought to marry another lady, whom the parents disapproved. 1985, parents told he either had to leave property or leave fiance. Robert chose the former. Robert’s brother, Stephen, then moved onto the property with his family and made substantial improvements to the promised lot (third promise). 1986, instituted proceedings to wind up partnership 1990, went to court as parents held onto the property under equitable estoppel

Procedural history -

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Trial judge, Supreme Court of WA, acted to the detriment of the second promise but not the third (because he continued to earn income from partnership and work improved profitability). Ordered parents to pay Robert greater sum expended on house and present value of the house and land which it stood. Appealed to the High Court, found Robert suffered detriment on the third promise.

Findings Gleeson CJ, McHugh, Gummon and Callinan JJ -

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Dillwyn v Llewelyn and Ramsden v Dyson:‘Equity which founded the relief obtained was found in an assumption as to the future acquisition of ownership of property which had been induced by representations upon which there had been detrimental reliance by the plaintiff’ Following Brennan J’s statement about equitable estoppel prevents unconscionable conduct from Verwayen (1990) 170 CLR 394, 428-9. Applied Plimmer v Mayor v Wellington. Detriment from third contract: loss of property which he worked to improve, didn’t gain immediate income rather sought to gain the proprietary interest. This meant he gave up an alternative career path, would not have stayed and improved the orchard. Possibility of poor harvest, that is why Robert was reluctant and parents promised the property. ‘Distinguishing factors between the equitable principle and enforcement of contractual obligation: 1. No legally binding promise in equitable principle 2. Not the promise itself but the expectation it creates

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3. Has no application where the transaction remains wholly executory on the plaintiff’s part. It’s the conduct of the plaintiff in acting upon the expectation to which equity intervention arises.’ Remedy: based on expectation of what was to happen but so as not to exceed its limit and be unjust to the estopped party.

11. Inducement - promises by parents to robert for property and to build the house 12. Assumption - future acquisition of the property, 13. Detrimental reliance - building the house, keeping up the land, turning down the job opportunity 14. Unconscionability - the parents were that he was aware changing his position 15. What relief did the court make available? - a sum of money was more important than the property → the defendant should make good on their promise - 3 original promises - Unfair impact on a 3rd party - as they younger brother moved in and improved the house and land

Sidhu v Van Dyke (2014) 251 CLR 505 (CB p245) This High Court of Australia decision revolved around a building, Oaks Cottage, situated on a 32 hectare rural property in New South Wales known as Burra Station. The appellant, Mr Sidhu, lived in the main homestead on Burra Station. The respondent, Ms Van Dyke, and her husband lived in Oaks Cottage, approximately 100 metres away. Ms Van Dyke and her husband paid rent to Mr Sidhu’s wife in respect of Oaks Cottage. Both the main homestead and Oaks Cottage were located on an unsubdivided block of land owned by Mr Sidhu and his wife as joint tenants. -

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Sidhu and Van Dyke embarked on a sexual relationship, to which the appellant promised to subdivide the property and transfer the cottage to her so that she would have a place to raise her son. The relationship between Sidhu and Van Dyke later broke down and Mr and Mrs Sidhu refused to convey any land to the respondent. Van Dyke sought relief on the basis of equitable or proprietary estoppel.

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The primary judge held that it was not reasonable for Van Dyke to rely on the promises because they were conditional on the subdivision of the land and required the consent of Mrs Sidhu.

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The Court of Appeal held that the primary judge should have applied a presumption of reliance which shifts the burden of proof to the representor to establish that the relying party did not rely on the promises in acting to her detriment. Since the evidence was insufficient to displace such a presumption the appeal was allowed and Sidhu was ordered to pay compensation to Van Dyke representing the value of the land that was promised

16. Inducement 17. Assumption - Sidhu promised van dyke she could get the property and that she could raise her son there 18. Detrimental reliance - 8 years renovating the cottage and if she did not get the property she would have left and gotten a job, and did not pursue a property payment after the divorce (detrimental alliance could be turning down opportunities) 19. Unconscionability 20. What relief did the court make available? - Sidhu had to pay her cost and equitable assessment for the cottage

Je Maintiendrai Pty Ltd v Quaglia (1980) 26 SASR 101 (CB p220) -

Estoppel can provide a remedy where assumptions are induced within an existing contractual relationship, in cases such as; - Where parties to a contract believe they have agreed to a contractual variation but the variation fails for want of consideration. - e.g. Lessor agrees to accept a lesser rent part way through the term of the lease.

Facts -

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The respondent tenant operates a hairdressing business in a shopping centre owned by the appellant landlord. There was little demand for shops in the shopping centre and the landlord had experienced some difficulty in finding and keeping tenants. (practical benefits) The landlord and tenant signed a three year lease fixing the rent for the shop at $278 per month, to be increased annually in accordance with rises in the consumer price index. Some months after the lease was signed the landlord agreed to reduce the rent of $240 per month for an indefinite period. The landlord then claimed the accumulated arrears (Arrears is a legal term for the part of a debt that is overdue after missing one or more required payments) of rent The trial judge held that the landlord was estopped from claiming this amount. Landlord appealed to the Supreme Court

Issue -

Whether or not a landlord who had reduced the rent to a tenant and then later demanded back payment of this rent amounted to a detriment to the tenant sufficient to give rise to the equitable relief of estoppel.

Judgement

HELD King CJ There can be no estoppel unless the promisee has altered their position on the faith of the promise. A person who makes a promise which is intended to be acted upon is not prevented from resigning from that position unless in doing so, it would result in some detriment or injustice to the promisee. In the present case, no doubt the promisor could revert to the original position with respect to future payments upon giving due notice. But would recognising this entitlement to the full rent for the period elapsed work any injustice? Evidence of detriment is sparse but the trial judge made a finding that accumulation of debt can be a problem. On this basis the plaintiff should be estopped from claiming full rental arrears. The defendant had provided no consideration for the plaintiff's promise to forgo his contractual right to the rent. This point was made in quite unambiguous terms by: -

“The appellant's promise to reduce the rent has no contractual force because it was made without consideration. The acceptance of a sum which is less than that legally due is not binding and does not extinguish liability for the balance unless there is fresh consideration. . . . The evidence does not disclose fresh consideration. The respondents' case therefore rests upon an estoppel to which the facts are alleged to give rise.”

HELD White J Detriment is to be assessed as at the time the promisor proposes to resile from the promise. In this case D may have suffered detriment by continuing in the relationship in reliance on the promise to reduce rent. Otherwise D could have abandoned the contract and taken a chance on being sued for breach; or D may have been able to assign the balance of the lease to another. The tenant had no doubt spent the money on other things and may not have had it to meet a demand for a lump sum. HELD Cox J (dissenting) The detriment must not be speculative or conjectural but substantive. The evidence here failed to establish detriment. It is not established merely by the court speculating about possible alternatives and then attributing them to the party. Held -

Appeal dismissed

21. Inducement - was that he reduced it (240 rather than 278) 22. Assumption - reduced rent would be kept with no back pay

23. Detrimental reliance - (hardly any) more money than what was agreed → assumed bc small business owner that she wouldn't have the funds Wasn't much evidence, as there was no embarrassment 24. Unconscionability - (not really talked about) backpay, when it was asked and no talk about it before 25. What relief did the court make available? - didn't have to pay the backpay...