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Week 8 Equitable Estoppel (Relief (Estoppel and constructive trust:…

- - - - The High Court found that Waltons Stores was estopped from ‘resiling from its implied promises that the contract of lease would be exchanged and that a lease would thereby come into existence’
    - - Proprietary estoppel arises where a property owner encourages another party to believe he or she has an interest in the land or property, and the belief has been acted upon. See Brennan J in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 420:
      - Whereas promissory estoppel could only be used as a defence, proprietary estoppel could be relied upon as a sword or a shield (i.e., sword = an enforceable right; a shield = a defence).
      - There were two ways in which an assumption of an interest could arise:
        
        (1) by encouragement: Dillwyn v Llewelyn (1862) De GFJ 517; and
        
        (2) by acquiescence: Ramsden v Dyson (1866) LR 1 HL 129.
    - - Under promissory estoppel ‘the equity binds the holder of a legal right who induces another to expect that right will not be exercised against him’: Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 420 (Brennan J).
      - The High Court of Australia accepted the doctrine of promissory estoppel in Legione v Hateley (1983) 152 CLR 406.
      - The decision of Central London Property Trust v High Trees House Ltd [1947] 1 KB 130 (High Trees) established promissory estoppel in its contemporary formulation
        
        the promise had to affect a pre-existing legal relationship: Combe v Combe [1951] 2 KB 215, 220; and
        
        it could only be used as a shield (i.e., defence) by the promisor against the promisee (it did not give rise to rights).
- - - - There needs to be a promise or a sufficiently clear and unambiguous representation: Low v Bouverie [1891] 3 Ch 82, 06.
      - The promise or representation as to an existing fact or future conduct can be either express or implied: Legione v Hateley (1983) 152 CLR 406.
      - In Westpac Banking Corporation v The Bell Group Ltd (in liq) (No 3) Drummond JA noted that ‘ambiguity or lack of clarity will be fatal to any promissory estoppel case’: Radan and Stewart [14.53].
      - Whether the relevant representation is clear and unambiguous will depend on the context: Thorner v Major (2009) 3 All ER 845, 964.
    - - One party must adopt an assumption that a certain state of affairs exists or will come to exist
      - The assumption can relate to a representation of fact, a mixture of fact and law, or solely to a legal state of affairs. The representation does not need to be express, but it must be clear and unambiguous (i.e. based on the person’s conduct):
      - The assumption must be reasonable in all the circumstances: Hammond v J P Morgan Trust Australia Ltd [2012] NSWCA 295, [53]
      - In cases of proprietary estoppel, the question is ‘whether the plaintiff assumed that an interest in property would be granted’: Doueihi v Construction Technologies Australia Pty Ltd (2016) 333 ALR 151
    - - The applicant must act or refrain from acting, in reliance of the assumption.
        It is the inducement to rely on the assumption not the representation that is the centre of the doctrine: Waltons Stores (Interstate) Ltd v Maher (1987) 164 CLR 387; Commonwealth v Verwayen (1990) 70 CLR 321.
        Usually this is shown by the representation itself when seen in context.
        However, silence can be enough: Waltons Stores.
      - With regard to the conduct that could induce the assumption, in Commonwealth v Verwayen (1990) 170 CLR 321, 356 Deane J identified four categories:
        
        Deane J identified four categories:
        
        (1) inducement by express or implied representation;
        
        (2) entering a contractual of other material form of relation on the basis of the assumption;
        
        (3) exercising a legal or equitable right that would only exist if the assumption were correct; and
        
        (4) understood that the other person operated under the assumption though refrained from correcting the assumption. Radan and Stewart [14.65]
    - - Waltons Stores, the representor must actually know, or intend, that the relying party will act or refrain from acting in reliance on the assumption of expectation
        Where there has been a representation of a promise knowledge is ‘easily inferred’: Waltons Stores.
        
        Commonwealth v Verwayen (1990) 170 CLR 321
        Dean J must be actual or constructive knowledge.
    - - The representee must suffer detriment or stand to suffer detriment if the assumption is not fulfilled: Radan and Stewart [14.73].
        There must be a link between the detriment and the assumption or expectation: Thompson v Palmer (1933) 49 CLR 507, 547.
        It is not enough (without detriment) that the relying party merely acted on the representor’s promise: Je Maintiendrai Pty Ltd v Quaglia (1980) 26 SASR 101.
      - Sidhu v Van Dyke
        
        promise to subdivide property but did not occur https://blogs.unimelb.edu.au/opinionsonhigh/2014/05/21/barnett-sidhu/
        
        First, Van Dyke was found by the trial judge to be a truthful witness, and in her evidence in chief she said that in reliance on Sidhu’s promise, she did not engage in full-time paid work, she did not seek a divorce settlement and she chose to improve the property. The plurality stated, at [69], ‘[t]hat evidence was likely, as a matter of the probabilities of human behaviour, to be true’. It was concluded that, objectively, Sidhu’s promises were likely to have a significant impact on Van Dyke’s decision-making process.
        
        it was sufficient to find that the representee was influenced by the promise, or that the promise was a significant factor in the representee making the decision that she did.
        
        Court said that the trial judge accepted that Van Dyke was concerned about whether Sidhu would honour his promise. They said that the fact that Van Dyke sought to get Sidhu to put his promises in writing tended to confirm that Sidhu’s promises were a material inducement to her remaining on the property.
    - - Equity seeks to avoid detriment where an assumption or expectation is unfulfilled: Vella v Wah Lai Investments (Australia) Pty Ltd [2004] NSWSC 748.
      - It must be unconscionable for the representor to rely on her strict legal rights and deny the assumption; see Austotel Pty Ltd v Franklin Selfserve Pty Ltd (1989) 16 NSWLR 582.
- - - - In Giumelli v Giumelli the High Court outlined that ‘before a constructive trust is imposed, a court should first determine whether some other remedy that falls short of imposing a constructive trust is appropriate’: Radan and Stewart [14.96].
    - - Constructive trusts
        
        56 He went on to refer to the observations of Ormiston JA in Nolan v Nolan[37] with respect to institutional constructive trusts and applied those observations at [106]:
        In Nolan v Nolan, Ormiston JA said:
        A person becomes an institutional constructive trustee because there is evidence from which it may be inferred either that that person intended to hold property on behalf of others or that he or she should have had such an intention.
        In the subject case, I have accepted the evidence that Mr Turner made the promises that he would leave No 73 on his death to the Grahams if they were to move to No 73 and look after him and his wife. I consider that that is evidence that he intended to hold the property on behalf of them or, at the very least, that he should have had such an intention.[38]
      - Mr Turner asked the Grahams to come and live on the property he owned next door and after he dies they can have the house. Grahams did this for 20 years or so until his death. Left them a life interest in the property with some conditions.
    - - Common intention constructive trust necessary elements
        Evans v Braddock [2015] NSWSC 249.
        [36.24]
        
        the parties must have formed a common intention as to the ownership of the beneficial interest in the identified property
        
        part claiming the beneficial interest must show the he or it has acted to their determinant
        
        it would be a fraud on the beneficiary for the trustee to assert that the claimant had no beneficial interest in the property
      - As remedy to unconscionable / unconscientious conduct
        [36.43]
        
        elements
        [36.67]
      - A “constructive trust” exists where there is an implied agreement. Constructive trusts arise from the parties’ conduct rather than express agreement. Various situations might result in the construction of a trust.
        https://www.awbrisbanelawyers.com.au/litigation-lawyers-brisbane-constructive-trusts/