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PRINCIPLES OF AUSTRALIAN EQUITY AND TRUSTS 12.29 However, the courts have cautioned against the ‘undisciplined recourse to the principle [of equitable estoppel] as a ready panacea for real or imagined grievances arising from negotiations between parties’: Capron v Government of Turks & Caicos Islands [2010] UKPC 2 at [34]. Thus, in Yeoman’s Row Management Ltd v Cobbe [2008] 4 All ER 713 at 737–8, in the context of a property development agreement between sophisticated commercial parties, Lord Walker of Gestingthorpe said: [E]quitable estoppel is a flexible doctrine which the court can use, in appropriate circumstances, to prevent injustice caused by the vagaries and inconstancy of human nature. But it is not a sort of joker or wild card to be used whenever the court disapproves of the conduct of a litigant who seems to have the law on his side. Flexible though it is, the doctrine must be formulated and applied in a disciplined and principled way. Certainty is important in property transactions. As Deane J said in the High Court of Australia in Muschinski v Dodds (1985) 62 ALR 429 at 452: Under the law of [Australia] — as, I venture to think, under the present law of England … proprietary rights fall to be governed by principles of law and not by some mix of judicial discretion … subjective views about which party ‘ought to win’ … and ‘the formless void of individual moral opinion’. 2 It is thus generally difficult to establish an equitable estoppel in a legal relationship between commercial parties operating at arms length and where their rights and obligations are carefully and extensively set out in formal documents: Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 at 585–6. Clear and unambiguous representation 12.30 To establish a case based upon principles of equitable estoppel there needs to be a promise or a sufficiently clear and unambiguous representation. In relation to this requirement, in Tadrous v Tadrous [2012] NSWCA 16 at [39], Meagher JA observed that ‘an equitable estoppel can be established notwithstanding that the expectation contains elements that would not be sufficiently certain to amount to a valid contract or is formed on the basis of vague assurance’. The rationale for this requirement of certainty stems from the fact that equitable estoppel is founded on the principle of unconscientiousness and unconscientiousness is difficult to establish if the representation is ambiguous or unclear: Australian Crime Commission v Gray [2003] NSWCA 318 at [200]. 12.31 The promise or representation can be either express or implied. In Legione v Hateley at CLR 438–9; ALR 1 at 23–4, Mason and Deane JJ said: The requirement that a representation as to existing fact or future conduct must be clear … does not mean that the representation must be express. Such a clear representation may properly be seen as implied by the words used or to be adduced from either the failure to speak where there was a duty to speak or from conduct. Nor is it necessary that a representation be clear in its 2. Writing extra-judicially about this case, Lord Neuberger of Abbotsbury said: ‘The message from the House of Lords in Cobbe v YRML is that it is simply not for the courts to go galumphing in, wielding some Denningesque sword of justice to rescue a miscalculating, improvident or optimistic property developer from the commercially unattractive, or even ruthless, actions of a property owner, which are lawful in common law’: Lord Neuberger of Abbotsbury, ‘Thoughts on the Law of Equitable Estoppel’ (2010) 84 Australian Law Journal 225, p 230. Copyright LexisNexis. Sample only, not for classroom use or distribution. 274 Spi-Radan & Stewart - Principles of Australian Equity and Trusts 2nd ed. Ch.12.indd 274 10/10/2012 05:22:31 200595
275 CHAPTER 12: EQUITABLE ESTOPPEL entirety. It will suffice if so much of the representation as is necessary to found the propounded estoppel satisfies the requirement. 12.32 In relation to the statement by Mason and Deane JJ that the representation does not have to be totally clear and unambiguous or free of any uncertainty, in Australian Crime Commission v Gray at [205], Ipp JA proffered the following example: Say, for example, a non-contractual representation was made whereby the representor orally promised to deliver a large quantity of produce specified by a nominated tonnage. Assume that the promise did not specify imperial tons or metric tonnes in circumstances where it was not reasonably possible to infer whether tons or tonnes were promised. Assume that the [relying party] relied on the promise and altered its position to its detriment. Assume further that the representor made no delivery whatever and repudiated its promise. If, in these circumstances, the [relying party] sued on the grounds of a promissory estoppel, I suggest that it would be selfevident that the representor would be liable to pay equitable compensation even though it was not possible to determine whether the quantity promised was in metric or imperial quantities. The unconscionability of the situation would not be negated by the ambiguity. Equity would intervene by fashioning relief based on the concept of ‘minimum detriment’. However, in Westpac Banking Corporation v the Bell Group Ltd (in liq) (No 3) [2012] WASCA 157 at [1748]–[1751], Drummond AJA expressed the view that ambiguity or lack of clarity will be fatal to any promissory estoppel case. However, this was not necessarily so in proprietary estoppel cases where ‘vague and imprecise conduct is often enough to give rise to an equitable proprietary estoppel’. His Honour, at [1753], observed that this was so because, unlike promissory estoppel cases, proprietary estoppel cases ‘do not depend on proof of clear representations or promises but on conduct with respect to property of the parties said to be estopped that is often diffuse and ambiguous, but which is sufficient, in the circumstances of the particular case, to attract the intervention of equity’. 12.33 Furthermore, whether the relevant representation is sufficiently clear and unambiguous is, as Lord Walker of Gestingthorpe observed in Thorner v Major [2009] 3 All ER 945 at 964, ‘hugely dependent on context’. Thus, in Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd [2008] VSCA 86 at [178], Dodds-Streeton JA said: A representation which is insufficiently certain or complete to create a contract may found proprietary estoppel. Where necessary to inhibit unconscionability, equity will construe a representation robustly in context, to determine its meaning as reasonably understood by the addressee. In my opinion, the standard of certainty, clarity and completeness required of the representation cannot sensibly be determined in isolation from other elements of proprietary estoppel in the circumstances of each particular case. Moreover, ambiguity or indeterminacy generated by the representor in the context of unconscionable conduct should not confer immunity from equity’s ‘long arm’. 12.34 In light of the above, it is understandable that in Yeoman’s Row Management Ltd v Cobbe at 726, Lord Scott of Foscote said that, in the context of an arm’s length negotiation between experienced businessmen, ‘[a]n expectation dependent upon the conclusion of a successful negotiation is not an expectation of an interest having [sufficient] certainty’ to ground a claim in equitable estoppel. However, in Thorner v Major, in the context of a family relationship, an Copyright LexisNexis. Sample only, not for classroom use or distribution. Spi-Radan & Stewart - Principles of Australian Equity and Trusts 2nd ed. Ch.12.indd 275 10/10/2012 05:22:31 200595
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