The General Estoppels Doctrine - Research Paper Example

Introduction Estoppel is a supplement to common law and provides a distinct body of the principles applied in mitigating the rigorousness of common law. The common law has a duty of creating rights but estoppel relieves the parties against the strict insistence upon those rights in case those insistences are against the conscience1. Estoppel concerns with conscience, particularly with the unconscionable insistence on a strict legal right. Estoppel conduct seeks to offer remedies and it comes to relief the party that labor under a disadvantage or are unconscientiously exploited by the other party. It has fundamentally protected the disadvantaged parties in the commercial dealings as it looks at intent rather than the form of transaction. In conduct, it is against the conscience for the court to enforce a penalty inconsistent to a primary obligation2. Verwayen who was a member in Royal Australian Navy injured in a combat exercise in a collision had commenced an action against Commonwealth on the basis of negligence. The Commonwealth admitted negligence but did not accept the injury or suffer of damages as claimed by the plaintiff. The Commonwealth was estopped from resiling on its promise3. Today, the state of law and the scope of its strict application of rules which could work injustice have promoted the application of a system of rules that moderate the rigorous, through estoppel. Equity recognizes that an obligation can arise due to absence of or despite a formal agreement and in case a party is held to those strict obligations. Body The general estoppels doctrine extends to the representations concerning the future facts and conduct. The operation of estoppels can be accepted from the general conduct of the doctrine. The entitlement to a relief based on the parties assumed state of affairs where one party is estopped from denial is qualified in the case where a relief exceeds what would be justified in application of conscientious conduct. The relief in such cases is framed on by looking at the state of affairs that is assumed. This represents the possible limits by which the relief is appropriate to the justice between the parties. The state of law today in respect to equitable estoppels reflect similar notion where such a state of affair is required to be established. Prima facie is observes in line with the apparent nature of a state of affairs upon the initial observation. The claimant has to provide sufficient evidence to support the legal claim or evidence by itself4. The claimant, who successfully produces enough evidence for all elements of claim to support a claim, can shift the burden of evidence produced to the respondent. Precisely, the court has to establish the state that requires a person to avoid the claims if a party caused the other to rely upon an assumption for the past, present and future. The assumption is induced by one party ad lead the other to hold. The claimant who suffers detriment upon such assumption can have a remedy as the other party had a purpose to avoid5. Giumelli v Giumelli is such a familiar situation concerning a family farm where one of the children worked hard and long and got a little return in an expectation of ultimate ownership. Robert Giumelli had left school at fifteen and worked in the farm with the parents and later became a partner together with the brothers and parents. The parents had persuaded the son to stay after full assurance when he was a youth that for the underpaid efforts, he would receive part of the property6. He later built a house which was confirmed by parent to be his on the basis of use of his expenses. Later, as he was employed by the father in-law the parent confirmed that they would subdivide the farm and transfer his orchard farm and the house would still stay. After the failure in marriage, the parent disapproved Robert’s intention to remarry and he was to choose between the farm and a proposed wife. Robert chooses the wife and proceeded to recover the farm as promised. Upon claiming, the brother had expanded the farmland improved the orchard, the part that belonged to Robert7. The trial judge found established a constructive trust based on promissory estoppels over a house while the Full Court established a detriment for Robert’s continued labor, the employment and share in partnership and declared a constructive trust for parents to achieve farm subdivision to convey the lot as promised based on promissory estoppel. As Deane J maintained in Verwayen, the promissory estoppels promote equity in sense of an obligation or entitlement where equity take cognizance. The plaintiff at this point succeeds by proving that the defendant is held to accept if they were true. As in the case of Grundt v Great Boulder Proprietary Gold Mines Limited1, the party cannot be accepted to depart from an assumption of fact that it caused the other party to adopt8. The same rules govern estoppels today and the rules works on precise grounds and the court holds a party that would want to depart from an assumption. The state of affairs is indispensable where a party is found to have so acted or in essence, abstain from acting by establishing a state of affairs by an assumption that it would suffer detriment in case the other party established rights against the inconsistence with the prior assumption. The essential condition compels the other party to adhere to the assumption upon which the other acted or abstained from action9. The almost conceptual identity by the considerations given by the state of affairs between the promiser to promisee under a contract induces an action. In Waltons Stores Limited V Maher, it was noted that the measure of contractual obligation depended on the terms of the contract together with the arising circumstances which the case applied10. The extent to which the equity was created by the estoppels thus varies according to the necessity to prevent a detriment that result from unconscionable conduct. The object of equitable estoppels leads to avoid the detriment that one party induced11. The dispute is derived from the definition of the detriment. Today, detriment are understood from the sense of real detriment just as it was identified in Grundit where the inducing party was permitted to abandon on the basis of the mutual legal relationship. The prima facie entitlement is qualified only if such relief exceed what can be justified by requirements of a conscientious conduct. The Court today has not wholly adopted the general theory formulated by Deane J by yielding to Verwayen by conduct. Nevertheless, by observing how different cases have taken form, equitable still operates along some precise lines. Where the conduct of one party objectively invites the other to rely on an expectation and the party correspondingly relies on that expectation to their substantial detriment in a way that it would be unconscientiously for the first party to cause that expectation to be disappointed, then equity construe and give rise to trust. The way the court rejected an appellant application in Riches v Hogben [1985] 2 reveals that promissory estoppels is currently based on an equity that binds a promisor to make good the promisee’s expectation. The conclusion following unconscientiouss has been essence of estoppel. An expectation of the fact should not be disappointed if a party asserts the true facts. The expectation cannot be disappointed if one party acts differently by asserting to inconsistent legal rights. When it appears that a relief could exceed what is to be justified by requirements of a conscientious conduct; and would be unjust to an estopped party. Equitable estoppels principles require a promise with a clear or sufficient representation. The Australian Crime Commission v Gray [2003] case is such a ruling that was based on the requirements of conscientious conduct. The existing fact and representations were clear of an existing future conduct though the representation was no t express. The words that the claimant expressed implied that the propounded estoppels satisfied the requirement. The non-contractual representation made in the case represented an oral promise for delivery of large quality of produce as specified by nominated tonnage. The party relied on inference the tons promised and altered it position to its detriment12. In Thorner v Majors [2009] there was a huge reliance on the context and Lord Gestingthorpe observed it. Peter had caused David to believe that he will inherit a farm after working for around 29 years. The assurance policies handled to David provided that the farm would be divided between Peter’s siblings and did not indicate any inheritance for David, a nephew. The court held that Peter indirect conduct and remarks were the basis that encouraged David’s expectation that at death, he would be Peter’s successor. The court orders that David receive the land, buildings and both live and dead stock. Peter’s remarks were not sufficient to establish proprietary estoppels13. In Cobbe v Yeoman’s Row Management Ltd [2008], it was found that the arm length negotiation involving the experienced businessmen raised an expectation on conclusion of successful negotiation14. The sufficient certainty promotes the claim for equitable estoppels. In Thorner V Majors, the context of family relationship generated an expectation through oblique remarks that were certain and clear. There must be circumstances of one party conduct or an established relationship between those parties which objectively invites reliance. It would be unjust to the estopped party. It will be inequitably harsh as in this regard, a promise that seeks equity is required to do equity. The principle of equity is thus given effect not necessarily be recompensing promise for the detriment, but through exclusion of inappropriate gains to the promise at an expense of a promisor above that which would properly inherent in an expectation. The outcome of the value that spring from the subsequent improvements that the promisor made to the property does not account in this case. The qualification is an expression and a recognition that the equity that arise by estoppel is subject to equity principles. Equity establishes the position that avoids unjust act by a party to render equivalent measure to an adjustment as required by equity15. The obligation constitutes some constructive trust in line with the circumstances of a case. Estoppel is effective as long as the conduct invites reliance. A representation into future conduct for instance the acceptance or recurrent payments or reduced rental may invite reliance to a point where a party gives a reasonable notice to revoke the representation. A representation for a repetitive future conduct does not imply that the conduct will indefinitely continue. The matters of facts spring from the reliance that is objectively invited and the meaning of representation. An assumption should therefore be made good if it is clear that no detriment would be suffered than what can be compensated by other remedy16. In Salsbury v. Northwestern Bell Telephone Co., the defendant had promised $15,000 to a college which later closed. The trustees wanted to recover that pledge. In the case, the court held the promise as binding enforced through promissory estoppels even without a show of any detrimental reliance17. In Berryman v. Kmoch case, Berryman provided Kmoch with a contract for a real estate after Kmoch agreed to exchange with $10 that was never paid. However, before the expiry of the option, Berryman sold the real estate property. The contract was held as valid by the court as contract options are supported on the basis of consideration while promissory estoppel also applies to the contracts18. In Wright v. Newman: the intention of Wright that led him to be listed as the father in the birth certificate of Newman’s child and gave his last name had recognized that there was a parent-child relationship. Though the DNA tests demonstrated that Wright was not the biological father, it was held that, Wright had an obligation of paying the child support through promissory estoppel19. In Devecmon v. Shaw: the plaintiff on reliance to his uncle’s reimbursement promise went to Europe. The evidence for the uncle promise to pay was admissible. It was termed irrelevant that a trip was to the benefit of the plaintiff. The judgment was entered for plaintiff since there was a detrimental reliance that promissory estoppel enforced the promise20. Conclusion Hard cases lead to dire law and so was Commonwealth v Verwayen (1990) 170 CLR394. The equitable estoppel today by conduct is used to vindicate an expectation that is created by representation of an estopped party. To protect the other party that was entitled to benefit from any changes that can be detriment by reliance on an expectation, estoppel is used as a remedy. There are various cases that have clarified the application of estoppel. Equity has continued to rely on conscientious behavior and so a party that raised the expectation is bound by those circumstances established. It has therefore been applied in employment, charitable organizations, franchises, gratuitous promises, construction projects, bids and many other areas. Read More