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Estoppel in the Australian Law System

Info: 2926 words (12 pages) Law Essay
Published: 8th Aug 2019

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Jurisdiction(s): Australian Law

Promises can be considered as special in our society because to keep a promise is the moral thing to do. In human society, despite moving towards modernism and progression, there is still what we call “societal” or “moral convention” to which the individual stating the promise is to be treated as bound to his promise. Ancient British laws reflects such moral convention, exhibited in the enforcement of promises given in substitute for other promises, ordering the individual who promised to either execute the promise or to compensate anticipated detriments. Such legally binding promises are now more popularly known as “contracts.” Once there has been a clear establishment of a contract, the contents of it cannot be modified without supplementary or additional promises (Kramer 2002). Under such contracts, there exist different principles to which a party can respond to the contracts or agreements yet do not occur from the binding nature of the contract. Such principles occur from different moral codes, an example of which is the estoppel. This research paper will be exploring the estoppel system in the context of the Australian law system. The paper will discuss the meaning and development of estoppel, as well as the implications it has on society and the development of laws.


A Brief History and Meaning of Estoppel

Some 380 years ago, Coke (1932:352) described the origins and meaning of “estoppel;” he wrote:

‘Estoppe’, commeth for the French word estoupe, from whence the English word stopped, and it is called an estoppel or conclusion, because a man’s own act or acceptance stoppeth or closeth up his mouth to allege or plead the truth.

It can be argued that the term, “estoppel,” can only mean “stopped.” For some reasons, it has broadened into the law system into something that has more meanings rather than “stopped.” For Kinsella (1992: 61), for example, he identified estoppel as:

a principle of equity or justice, which is invoked by a judge to prevent, or estop, a party from making a certain claim, if the party’s prior actions are in some sense inconsistent with making such a claim, and if another relied on such prior actions to his detriment.

Cooke (2000: 1), on the other hand, defines estoppel in a simple and contemporary approach, describing it as:

a mechanism for enforcing consistency; when I have said or done something that leads you to believe in a particular state of affairs, I may be obliged to stand by what I have said or done, even though I am not contractually bound to do so.

The law of estoppel can be best described as a modern concept with a highly medieval tag concerning the enforcement of responsibilities outside the law of contract and tort. Cooke (2001) asserts to name it the law of consistency, which compels people to stand by what they have said. To fully grasp the context of the estoppel system, it is necessary to look into its history and how it was developed. Nevertheless, the development of the estoppel system is one that is colourful and quite complex in such a way that there are many variations within this system. Lord Demming in McIlkenny v Chief of the West Midlands (1980: 316-317) wrote that from the simple origins of the estoppel, which is literally “stopped,” it had grown into something bigger with different branches; he wrote:

From that simple origin there has been built up over the centuries in our law a big house with many rooms. It is the house called Estoppel. In Coke’s time it was a small house with only three rooms, namely, estoppel by matter of record, by matter in writing, and by matter in pais. But by our time we have so many rooms that we are apt to get confused between them. Estoppel per rem judicatam, issue estoppel, estoppel by deed, estoppel by representation, estoppel by conduct, estoppel by acquiescence, estoppel by election or waiver, estoppel by negligence, promissory estoppel, proprietary estoppel, and goodness knows what else. These several rooms have this much in common: They are all under one roof. Someone is stopped from saying something or other, or doing something or other, or contesting something or other. But each room is used differently from the others. If you go into one room, you will find a notice saying, “Estoppel is only a rule of evidence.” If you go into another room you will find a different notice, “Estoppel can give rise to a cause of action.” Each room has its own separate notices. It is a mistake to suppose that what you find in one room, you will also find in the others.’

Cartwright (2006) outlines four of the major forms of estoppel: (1) estoppel by record, or estoppel per rem juricatam, (2) estoppel by deed, (3) estoppel by convention, and (4) estoppel by representation.

Estoppel by Record or Estoppel per Rem Judicatan

According to Cartwright (2006), this variation of estoppel normally arises as an issue of judicial estoppel or action estoppel wherein the decisions made from preceding legal proceedings avert the same parties from retaking legal actions on the same issues or causes of action.

Estoppel by Deed

The term “deed” refers to an official document, which may be used to make either an independent promise or bilateral contract binding, as well as other transactions (i.e. transfer of the legal title to property, formation of specific property interests such as leases). Within this variation of estoppel, a declaration of fact completed by a specific party in a deed cannot be disputed by that party as in opposition to the other party of the deed. To all intents and purposes, once a party has obligated themselves to an unambiguous declaration of fact in a deed, the lawful end results must be settled on the foundation that the fact is true. In simpler terms, the confirmation cannot be directed to disagree with the fact; that party is “estopped” from denying the fact (Cartwright 2006). Cartwright adds that this variation of estoppel also includes such cases wherein a party comes into a deed to award rights that party itself has no right. For example, an individual declares awarding a lease of land to which he has no title. In such cases, a so-called “tenancy by estoppel” takes place, wherein once both parties have proceeded on the supposition that the deed created a lease contract, neither is permitted to deny to the other that their affiliation has all the occurrences of the lease. Their official affiliation is then made compulsory by each as it were a rightfully granted tenancy.

Estoppel by Convention

Estoppel under this variation include such cases wherein parties to a transaction proceed on an implicit circumstance of facts or law wherein the supposition is either being shared by both parties or prepared by one and agreed upon the other party ; however, it should be noted that so long as the assumption is being corresponded by all parties to one another, then every party is “estopped” from denying the unspoken facts of law if it would be unwarranted to consent the party to return to the assumption (Cartwright 2006). Cartwright adds that is variation of estoppel was not created for the intention of building new legal rights; nevertheless, it can have a more or less similar effect such that when the parties share an oversight over the official consequence especially in the terms of a contract, then the erroneous consequence can be put into effect.

Estoppel by Representation

This variation of estoppel has been the focus on recent discussions on estoppel. Generally known as the common law estoppel by representation, this happens when an individual representing himself to another, intending that the latter should proceed on it to his disadvantage and loss to which he does proceed on it, is “estopped” from denying the substance of his representation. The application of this principle was not directly applied to statements of intention and/or promises. Its application started only to demonstrations of existing facts. Regularly illustrated as a statute of evidence, a party who illustrated a fact would not be allowed to direct substantiation to oppose that fact in an act by or against the party to whom the demonstrations of facts were made as well as those who relied on it, given that he/she had changed his position on the faith of the demonstrations of the fact, in some way, to his/her own disadvantage (Cartwright 2006). According to Cartwright (2006), the estoppel itself is not the basis of the action to which a claim is made, but rather, it influences the consequences of a claim through making amends of the factual grounds of the claim as it was demonstrated to be.

Under the estoppel of representation, there are two other variations of estoppel developed, which influenced the demonstration of facts made by one party that another party has relied upon on: promissory estoppel and proprietary estoppel. Promissory estoppel, which has been developed as an extension by equity of common law estoppel by representation, is such when a party has made or given to another party a distinct and unambiguous statement or promise, with original intentions of influencing the official affiliations between the two parties, to which to be for that reason enacted upon, then, that party who made or gave the promise is “estopped” to regress to their original official affiliations as if there was no such promise made or given by that party; furthermore, that party is obligated to accept their official dealings subject to the criterion that that party has introduced (Bailey 2005). Proprietary estoppel, on the other hand, is a well-established doctrine concerning the laws of land. The principle of proprietary estoppel applies in such cases wherein an individual implementing and claiming his/her legal rights is “estopped” or prevented to do so (Bryan 2008). Bailey (2005: 510) describes proprietary estoppel in a much detailed scope:

The owner of land, A, in some ways leads or allows claimant, B, to believe that he has or can expect some kind of right or interest over A’s land. To A’s knowledge, B acts to his detriment in that belief. A then refuses B the anticipated right or interest in circumstances that make the refusal unconscionable. In these circumstances, equity arises in B’s favour. This gives B the right to go to court and seek relief.


Estoppel in Australian Law System

The principle promissory estoppel was first adopted into Australian law in Legione v. Hateley (1983), concerning primarily of a contract for the procurement of a portion of land. The contract specified a clause indicating time as the fundamental foundation of the contract. Part of the contract also indicated that parties must issue a written notice prior to implementing rights and remedies. The buyer built a house on that land prior to completion. The seller issues a notice to complete which expires on 10 August 1978. However, on 8 August that same year, the buyer’s solicitor called the seller’s solicitor, and conversed to the seller’s clerk indicating that bank financing has been arranged, but settlement was to be completed only on 17 August 1978. Seller, however, refused to complete and forfeited all money paid under that contract. The seller’s tender of the purchase price on 15 August 1978 was discarded. And so the buyer sued the seller for particular performance of the contract. However, the plaintiffs were unsuccessful due to unreasonable reliance as well as ambiguous promise.

Walton Stores (interstate) Ltd v Maher (1988) was perhaps the most significant case on matters of promissory estoppel such that it influenced the removal of the limitations on the implementation of the doctrine of promissory estoppel. These limitations included: (1) that the promise must be in the milieu of a pre-existing lawful affiliations, and (2) that promissory estoppel could only be used as a defence to an act acquired by the party who promised to the party to whom he/she promised. Walton Stores (interstate) Ltd v Maher paved way in establishing the conditions that if estoppel is proven, equity arises in favour of the claimant, and the High Court will execute minimum equity that is just and fair in the given situations. Aside from which, this also established the condition that the promise can come from either silence or inaction.

Spence (1997) describes the Australian estoppel system as “embryonic” wherein it is still in a stage of development. Accordingly, passages of the Australian estoppel system indicate one that is written in the most general forms, leaving many questions open, especially in terms of its practical application and its interrelation with other liabilities. According to Spence (1997), while the doctrine of Australian estoppel may seem rather clear and comprehensible from afar, but one examined closely, its impreciseness and ambiguity becomes known. Spence further argues that while there is a possibility to recommend a specific mix of the Australian estoppel, there is very little probability in giving the current Australian estoppel a well-defined and exact representation. Spence (1997: 211) writes, “It would be a bold lawyer who would assert knowledge of what the law of estoppel was today in Australia.” Of particular interest in the doctrine of Australian estoppel are the two primary and perhaps most challenging aspects, which are: (1) the different considerations that should be taken into account in determining such occasions when the case would be unconscionable for a party not to fix the disadvantage that it has caused, experienced by the other party upon confidence and trust on an induce assumption, and (2) the cures to which a petition in Australian estoppel might give rise.

Kinsella (1992) noted that the very core of the concept of the estoppel is the concept of consistency, wherein in the case of estoppel, a person in court is he cannot on any grounds make a declaration or a statement that is completely inconsistent with his previous statement and/or action and/or behaviour. With such challenges in Australian estoppel system, such conditions might produce an implemented responsibility despite devoid of considerations under such circumstances like: (1) promise, (2) deceitful behaviour, (3) special relationships, and (4) irreversible modification of the situation. It can be said that using estoppel as a defence in claims has relevant and substantial role in the development of law especially in unwarranted enrichment, in such ways of careful and comprehensive analysis of the requirements found in the case, wherein the majority of the observed injustices to the claimant may be lightened through the restriction of the application of the defence to worthy cases. Moreover, by developing and effectively managing the estoppel structure can accommodate the potential limitations of the estoppel framework, rather than choosing to the unclear and imprecise concept of unconscionability (Taylor 2003).

Implications of estoppel point out that it works as a rule of evidence, which thwarts the claimants in making out his grounds of action in unwarranted fortification. Nevertheless, the considerable consequence of the estoppel defence is the realization of the defendant’s expectations. Through the acknowledgement of the claimant’s promise as the corresponding contractual force, courts may come to a decision to confiscate the evidential bar, and consequently have resort to a variety of contractual alternatives available. Taylor (2003) believes that such action might produce criticisms of the “all or nothing” consequence of estoppel and allow the recuperation by the claimant in event where the loss of practical expectations of the defendant was not able to weaken his enhancement. The option would then be consider estoppel by representation into the law of consent. On the other hand, the doctrine of consideration continues to be a difficult barrier to any development in this direction.


This research paper has explored the topic of estoppel, especially its implications to law and society in the Australian context. Estoppel, which originally meant “stopped,” has gone through many developments since it began. At present, it is recognised as a principle to which enforcing consistency in the claims made now and claims made preceding the contract. Accordingly, the law of estoppel has many variations: estoppel by record or estoppel per rem juricatan, estoppel by deed, estoppel by convention and estoppel by representation. The last of which has undergone several developments and improvements due to its ambiguity. Developments and improvements included the development of the promissory estoppel and proprietary estoppel, wherein the former was further improved by the elimination of its limitations. Nevertheless, the estoppel system in Australian law system is such that it is still very young, “embryonic” as some authors would say. It has still so much to learn and improve, especially with the challenges that this paper has identified. The cases using the estoppel defence serves as specific examples to which the Australian law system can learn from.

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