Date: Thu, 22 Jun 2006 15:38:01 +1000

From: Andrew Robertson

Subject: Estoppel Query

Dear Jason,

It seems to me that the situation you describe can be dealt with through the application of ordinary principles of estoppel by convention or promissory estoppel. If A, B and C arrange their affairs on the basis of a particular understanding, from which A seeks to resile to the detriment of B, then I don't see why B can't assert against A an estoppel by convention or promissory estoppel as appropriate. In Trident v McNiece (1988) 165 CLR 107, 145 Deane J discussed the possibility of a party to a contract being estopped from denying the enforceability of a promise to benefit a non-party.

An interesting case is Weir v Hoylevans Pty Ltd [2001] WASCA 23, where the manager of a tavern (who was also one of the directors of the company that owned it) induced buyers of the tavern to believe that he would comply with a restraint of trade clause in the contract of sale (to which he was not a party). The trial judge said:

[80] It follows from the preceding analysis that within the principles reflected in Walton's case (supra) that Mr Weir acted unconscionably in allowing Mr Evans and Mr Hoyle, and thus the plaintiff, to proceed with their purchase on the assumption that the trade restraint clause would be complied with, not only by K9 Pty Ltd, but also by its directors and then, at a later stage, acting inconsistently with the representation that had given rise to the assumption. It is not a sufficient answer to this plea that equity should not assist the purchasers in circumstances where they could have insisted on their common law contractual rights to have a deed of restraint signed by the K9 Pty Ltd directors, because the effect of Mr Weir's actions was to create an assumption that a deed of that kind was no longer appropriate or necessary. The plaintiff acted to its detriment in that it paid a substantial amount for goodwill pursuant to a belief created by Mr Weir that the trade restraint clause would be honoured. I find in favour of the plaintiff on this issue.

Kind regards,
Andrew

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From: Jason Neyers
Sent: Wednesday, 21 June 2006 9:45 PM
Subject: ODG: Re: Estoppel Query

The trouble with the Canadian cases, at least from my perspective, is that they do not use the concept of estoppel or detrimental reliance in any explicit fashion. What I was hoping to find was an explicit judicial or academic discussion of this possibility?

Are Andrew Robertson or Lizzie Cooke lurking out there?

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