Re: ALLEN REED and YVONNE REED And: JAMES LAWRENCE SHEEHAN (1982) 56 FLR 206 No. ACTG9 of 1981 Contract - Estoppel
COURT
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY GENERAL DIVISION Fox(1), Blackburn(2) and Deane(3) JJ.
CATCHWORDS
Contract - Licence Agreement with Option to Purchase - Periodical Payments - Varied Time of Payment - Late Payments - Purported Exercise of Option - Whether Conditions of Exercise complied with - Effect of Concessions by Counsel in Course of Argument - Whether Licensors Estopped by Conduct from Relying on Late Payments to Defeat Option.
Estoppel - Contract - Licence and option to purchase - Option conditional upon no breach of contract - Breach of contract by respondent - Purported exercise of option - Whether appellants estopped from alleging breach of contract - Estoppel in pais - Estoppel by representation - Promissory estoppel - Principles - Features of estoppel.
Contract - Licence and option to purchase - Option conditional upon no breach of contract - Breach of contract by respondent - Purported exercise of option - Estoppel - Whether appellants estopped from alleging breach of contract - Estoppel in pais - Estoppel by representation - Promissory estoppel - Principles.
HEADNOTE
The appellants, by a written agreement, granted the respondent a licence to use the hire car number plate A.C.T. H.22 for a specified period. In the same agreement the appellants granted the respondent an option to purchase the number plate provided the respondent was not in breach of the agreement during the term of the licence. Although in breach of the agreement the respondent purported to exercise the option. The Supreme Court of the Australian Capital Territory found that the option had been validly exercised and, on appeal, the respondent conceded that his breaches of the agreement disentitled him from exercising the option unless the appellants were estopped from alleging the breaches.
Held: Fox J. dissenting, allowing the appeal - the conventional estoppel by representation as well as a promissory estoppel have the following relevant features: (1) A representation must be clear and unambiguous before it can found an estoppel.
(3) A person will not be estopped from departing from an assumption or a misrepresentation unless, as a result of adopting it as a basis of action or inaction, the other…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Reed, A. & Y. v. Sheehan, J.L. [1982] FCA 2 ((1982) 56 FLR 206)
Case
[1982] FCA 2
Decision Date
CaseChat Overview and Summary
The case of Reed v Sheehan involved the appellants, Mr and Mrs Reed, and the respondents, Mr and Mrs Sheehan, who were involved in a dispute regarding a licence agreement with an option to purchase property. The matter was heard by the Supreme Court of the Australian Capital Territory, and subsequently, the appellants appealed to a higher court. The appeal was heard by a panel of judges who considered the legal issues raised by the parties.
The primary legal issue in the case was whether the respondents had complied with the conditions outlined in the licence agreement when they purported to exercise the option to purchase the property. The conditions included the requirement for the respondents to make periodical payments, and the appellants argued that the respondents had failed to make these payments on time, thereby breaching the terms of the agreement. The respondents, on the other hand, argued that the late payments did not constitute a breach and that the option to purchase should still be valid. The court had to decide whether the respondents' late payments invalidated their exercise of the option to purchase and whether the appellants were estopped from relying on the late payments to defeat the option.
In delivering the judgment, the court found that the respondents had indeed failed to make the periodical payments on time, as required by the terms of the licence agreement. However, the court also considered the effect of concessions made by counsel for the appellants during the course of the argument. The court held that the appellants were estopped from relying on the late payments to defeat the respondents' exercise of the option to purchase, as they had not raised the issue of the late payments as a ground for invalidating the exercise of the option until the proceedings had commenced. The court further found that the respondents' conduct did not amount to a waiver of their right to rely on the late payments and that the appellants were not estopped from asserting their rights under the agreement.
As a result of the court's decision, the appeal was allowed, and the order of the Supreme Court of the Australian Capital Territory was set aside. The action was dismissed with costs, and the respondents were ordered to pay the appellants' costs of the appeal. This outcome highlights the importance of adhering to the terms of a licence agreement and the potential consequences of failing to do so, as well as the impact of concessions made during legal proceedings on the final outcome of a case.
Orders
Orders of the court
1. The appeal be allowed.
2. The order of the Supreme Court of the Australian Capital Territory be set aside.
3. The action be dismissed with costs.
4. The respondent to pay the appellants' costs of this appeal.