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PRINCIPLES OF AUSTRALIAN EQUITY AND TRUSTS property. Ultimately it is a question of what is appropriate in the circumstances: Tadrous v Tadrous at [43]–[49]. 12.64 In Giumelli v Giumelli, parents promised their son that, if he continued to live on a property owned by them, they would subdivide it and give him the portion containing the house in which he lived. On the basis of this the son stayed and gave up a career opportunity that would have taken him away from the property. The relationship between the parents and son broke down when the son married a woman of whom his parents did not approve, and they refused to transfer the property to the son. The High Court granted the son monetary relief to the value of the property that should have been transferred to him by his parents. The High Court did not order a transfer of the property to the son. However, the monetary compensation was nevertheless a remedy based upon the son’s lost expectation rather than reliance loss or any actual detriment suffered by the son. 12.65 Thus, generally relief in promissory estoppel cases will be reliance based whereas in proprietary estoppel cases it will be expectation based. In ACN 074 971 109 v The National Mutual Life Association of Australasia at 394, Dodds-Streeton JA summarised the current state of the law on relief for equitable estoppel as follows: It is true that in Giumelli v Giumelli, Gleeson CJ and McHugh, Gummow and Callinan JJ said that Verwayen did not foreclose as a matter of doctrine relief making good the assumption in an appropriate case. But nothing which their Honours said in Giumelli suggests that there was any change from the view expressed in Verwayen that the doctrine of equitable estoppel enables a court to do what is required to avoid detriment to the party who has been induced to act upon an assumed state of affairs, and thus that the relief required in a given case may be less than making good the assumption. Accordingly, since Giumelli, in the majority of commercial cases not involving the acquisition of an interest in real property in which the doctrine of equitable estoppel had been invoked, the relief accorded it has been no more than was necessary to avoid detriment. FUSION OF EQUITABLE AND COMMON LAW ESTOPPELS? 12.66 The complexity attendant upon having so many varieties of estoppel makes unification an attractive prospect. The successful merger of promissory and proprietary estoppels in Waltons Stores v Maher has fuelled speculation as to the possibility of an even more challenging simplification — the joining of common law and equitable estoppels. The leading advocates of this were Mason CJ and Deane J, neither of whom agreed with the model designed by the other and both of whom have now vacated the High Court bench. While the present members of the High Court have not dismissed the possibility of unification they are yet to find a suitable occasion for the implementation of such an innovation. It is clear, however, that the legacy left them by Mason CJ and Deane J is far from uncomplicated. 12.67 The principal difficulty in fusing common law and equitable estoppel lies in reconciling their very different origins and purposes so as to decide upon the form that a single doctrine would ultimately take. The different functions of the estoppels in the two jurisdictions are most apparent in the remedies they provide. The contrary positions adopted by Mason CJ and Deane J in Commonwealth v Verwayen reflect the differing emphasis they placed upon the two jurisdictions when formulating their own particular model. Deane J’s unified estoppel reflected common law Copyright LexisNexis. Sample only, not for classroom use or distribution. 284 Spi-Radan & Stewart - Principles of Australian Equity and Trusts 2nd ed. Ch.12.indd 284 10/10/2012 05:22:31 200595
285 CHAPTER 12: EQUITABLE ESTOPPEL roots at the expense of equitable influences. He denied that it could act as a sword and limited its role to establishing the state of affairs by which the court was to resolve the dispute — in other words, his estoppel was to have the evidentiary quality so often referred to at common law. Consequently, his view that the ‘prima facie entitlement’ of a successful claimant is simply to have the assumption made good is a logical conclusion. However, he did admit that the availability of that remedy should be qualified if such ‘relief would exceed what could be justified by the requirements of conscientious conduct and would be unjust to the estopped party’: Commonwealth v Verwayen at CLR 442; ALR 354. For a number of reasons, Deane J’s view has not attracted much support from commentators or his fellow judges. Its chief failure would seem to be the rejection of estoppel as a source of substantive rights — a position to which it would now seem quite difficult to return. 12.68 The proposal by Mason CJ is very different from that of Deane J. In Commonwealth v Verwayen, at CLR 413; ALR 333, Mason CJ said: [I]t would confound principle and common sense to maintain that estoppel by conduct occupies a special field which has as its hallmark function the making good of assumptions. There is no longer any purpose to be served in recognising an evidentiary form of estoppel operating in the same circumstances as the emergent rules of substantive estoppel. The result is that it should be accepted that there is but one doctrine of estoppel, which provides that a court of common law or equity may do what is required, but not more, to prevent a person who has relied upon an assumption as to a present, past or future state of affairs (including a legal state of affairs), which assumption the party estopped has induced him to hold, from suffering detriment in reliance upon the assumption as a result of the denial of its correctness. A central element of that doctrine is that there must be a proportionality between the remedy and the detriment which is its purpose to avoid. It would be wholly inequitable and unjust to insist upon a disproportionate making good of the relevant assumption. 12.69 The impetus for unification seems to have lessened since the decision in Commonwealth v Verwayen. Writing extra-judicially in 2006, Justice Handley of the New South Wales Court of Appeal said: Any single overarching doctrine [of estoppel] would be at such a high level of abstraction that it would serve no useful purpose. Each form of estoppel has its own elements, although some are common to others. The similarities warrant their recognition as a form of estoppel but the differences make each a distinct form with its own history and requirements. There is no more need for a single overarching doctrine for estoppel than there is for torts. Estoppel by deed, by grant, and by convention are common law doctrines which preclude contradiction but do not require a change of position induced by belief in the truth of facts. Estoppel by representation, developed in equity and borrowed by law, precludes contradiction if the representee’s belief in the truth of the representation induced a detrimental change of position and the rights of the parties are governed by the facts as represented. Proprietary and promissory estoppels are equitable. Proprietary estoppel by encouragement enforces proprietary expectations which the person estopped has created or encouraged when their repudiation would be unconscionable. Proprietary estoppel by standing by enforces an equity against the fraud of an owner who seeks to rely on his property rights to profit from the known mistake of another. Promissory estoppel is a defensive equity which restrains the enforcement of positive rights by a person whose promise induced a change of position which makes such enforcement inequitable. The distinctly equitable Copyright LexisNexis. Sample only, not for classroom use or distribution. Spi-Radan & Stewart - Principles of Australian Equity and Trusts 2nd ed. Ch.12.indd 285 10/10/2012 05:22:31 200595
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