Estoppel

Question 1

An equitable tool that prevents the promisor from asserting their right is known as …

Answer 1

PROMISSORY ESTOPPEL

Question 2

PE can be used as both ‘sword and shield’, a cause of actions where.

What is meant by a ‘sword’ and a ‘shield’?

Answer 2

• In that the ‘sword’ is to enforce the other party to their promise
• In that the ‘shield’ is to prevent the other party from enforcing their legal right.(Walton Stores (Interstate) v Maher (1988) 164 CLR 387)

Question 3

What are the essential element of Estoppel?

Answer 3

1. Assumption - relying party must have adopted an assumption;
2. Inducement - That assumption must have been induced by the conduct of the representor;
3. Detrimental reliance - relying party must act on the assumption in a way that it will suffer detriment if representor does not adhere to the assumption; (Commonwealth v Verwayen (1990) 170 CLR 394)(Je Maintiendrai PL v Quaglia (1980) 26 SASR 101)

Additional Elements

4. Reasonableness - court must be satisfied that relying party acted reasonably in adopting and acting upon assumption;
5. Unconscionability - it must be unconscionable for representor to depart from assumption;
6. Departure - Representor must depart or threaten to depart from assumption adopted and acted upon by relying party.

Question 4

What will be determined wheather it is common law estoppel or an equitable estoppel?

Answer 4

The nature of assumption.

(Walton Stores (Interstate) v Maher (1988) 164 CLR 387)

Question 5

In Walton Stores (Interstate) v Maher (1988) 164 CLR 387, Brennan J ruled the plaintiff must show what for an equitable estoppel to arise?

Answer 5

That the party assumed a particular legal relationship existed or would have existed and that the defendant is not free to withdraw.

Question 6

What were the facts of Mobil v Wellcome (1998) 81 FCR 475

Answer 6

1. Mobil told its franchises that it would reward franchisees who live up to 90% performance standards under a scheme called “Circle of Excellence” over six years.
2. The reward was discussed in a vague way, but essentially would be the extension of the franchisee’s tenure with no cost
3. Mobil abandoned the Circle of Excellence scheme after four years, despite several franchisees spending time and money living up to those standards
4. Mobil franchisees sued.

Question 7

In (Mobil Oil Australia v Wellcome Internation), in terms of assumption, what element is required to establish estoppel?

Answer 7

It is necessary element that the defendant has created or encouraged an assumption that a legal relationship or interest would be granted.

Question 8

In the second element of estoppel of inducement, who must induce the assumption?

Answer 8

By the conduct of the representor.

Question 9

In the second element of estoppel of inducement, how can inducement be made?

Answer 9

By conduct, which may be expressed or implied.

Question 10

In the second element of estoppel of inducement, can silence induce an assumption?

Answer 10

Yes. If it can be shown that the representor intended reliance.

Question 11

In the third element of estoppel - dertriment reliance, what must be shown?

Answer 11

1. Must be shown that the representee acted on the assumption in such a way that they would suffer a detriment if the representor is allowed to depart from the assumption. (Je Maintiendrai PL v Quaglia (1980) 26 SASR 101)​
2. The departure is unjust or unconscionable.
3. Reliance involves the essentail component of the relying party acting upon the assumption.

Question 12

What the facts of (Je Maintiendrai PL v Quaglia (1980) 26 SASR 101)?

Answer 12

1. Landord agreed to lower rent because tenants were having financial difficulties and the units were difficult to rent out.
2. The reduction extended 18 months until the tenants decided to move out. The landlord then demanded the unpaid amount.

Question 13

What was the legal issue in Je Maintiendrai v Quaglia?

Answer 13

Whether a landlords’ gratuitous promise to accept a lower rent would be detrimental to a tenant if there was reliance.

Question 14

What was the detriment in Je Maintiendrai v Quaglia?

Answer 14

This benefit would have become a detriment if the landlord were to reclaim the unpaid rent by way of a lump sum.

Question 15

“[D]eparture from the assumption would be unconscionable … by reference to all the circumstances of the case, including the reasonableness of the conduct by the other party in acting upon the assumption and the nature and extent of the detriment… if departure…were permitted.”

Who made this finding and in which case?

Answer 15

Deane J, Commonwealth v Verwayen (1990) 170 CLR 394

Question 16

An estoppel will not arise unless the representor has … to depart from the assumption.

Answer 16

departed or has threatened

Question 17

What are the facts of Giumelli v Giumelli (1999) 196 CLR 101 ?

Answer 17

1. Robert Giumelli and his father were partners in a family orchard business.
2. Robert lived in a house on one of the properties used by the partnership.
3. Robert’s parents stated the land would be subdivided and the house portion transferred to him if he stayed on the property.
4. Robert gave up the opportunity to pursue another career and stayed on the property.
5. The relationship broke down when Robert married a woman of whom his parents disapproved and the parents refused to transfer the property.

Question 18

The court may grant relief to ensure the relying party does not suffer loss as a result of the reliance on a promise is known as

Answer 18

Reliance-based relief