Rae & Partners Pty v Shaw

Rae & Partners Pty Ltd (the appellant) appealed to the Full Court of the Supreme Court of South Australia against a decision of a single judge. The dispute concerned whether the appellant was estopped from denying the validity of a deed it had executed, despite the deed containing a misstatement of law. The respondent, Mr. Shaw, sought to rely on the deed to enforce certain rights.

The central legal issue before the Full Court was whether the doctrine of estoppel by convention could apply to a mutual assumption concerning a matter of law, rather than solely a matter of fact. Specifically, the court had to determine if such an assumption of law was restricted to assumptions relating to private legal rights, or if it extended to broader legal principles.

The Full Court held that estoppel by convention can arise from a mutual assumption of law, not just fact. The court reasoned that the purpose of the doctrine is to prevent a party from departing from an assumption that has been adopted by both parties and upon which they have acted to their detriment. The court found that the deed itself, by its terms, created a mutual assumption that the legal position was as stated within it, and that the appellant was therefore estopped from denying the validity of the deed based on the misstatement of law. The appeal was dismissed.