JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: WILSON -v- ARWON FINANCE PTY LTD [2020] WASCA 137
CORAM: QUINLAN CJ
PRITCHARD JA
VAUGHAN JA
HEARD: 9 JUNE 2020
DELIVERED : 31 AUGUST 2020
FILE NO/S: CACV 84 of 2019
BETWEEN: FRANK CULLITY WILSON
Appellant
AND
ARWON FINANCE PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: KENNETH MARTIN J
File Number : CIV 2225 of 2017
Catchwords:
Equity - Promissory estoppel - Alleged error of law - Loan agreement - Purported assumption by appellant that respondent would have recourse to security interest before seeking to recover from appellant personally - Whether primary judge misapprehended and misapplied Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd in finding that recoverability assumption was not reasonable - Whether primary judge ought to have instead considered whether assumption was reasonably open to the appellant.
Appeals - Whether primary judge erred in failing to give adequate reasons for factual finding that appellant did not hold purported recoverability assumption - Turns on own facts.
Equity - Promissory estoppel - Alleged errors of fact - Whether primary judge erred in finding appellant did not hold recoverability assumption - Whether primary judge erred in finding there was no reliance by appellant on recoverability assumption - Whether primary judge erred in finding that departure from assumption by respondent would not cause detriment to appellant - Turns on own facts.
Legislation:
Nil
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
| Appellant | : | G R Donaldson SC & T C Russell |
| Respondent | : | S K Dharmananda SC & V Ghosh |
Solicitors:
| Appellant | : | McInnes Wilson Lawyers |
| Respondent | : | Allens |
Case(s) referred to in decision(s):
Arwon Finance Pty Ltd v Wilson [2019] WASC 244
Attard v James Legal Pty Ltd [2010] NSWCA 311; (2010) 80 ACSR 585
Australian Crime Commission v Gray [2003] NSWCA 318
Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14; (2014) 253 CLR 560
Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191
Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485
Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1
Birla Nifty Pty Ltd v International Mining Industry Underwriters Ltd [2014] WASCA 180; (2014) 47 WAR 522
Browne v Dunn (1893) 6 R 67
Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232
Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394
Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 260 CLR 1
Falkingham v Hoffmans (a firm) ) [2014] WASCA 140; (2014) 46 WAR 510
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
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- Case
- [2020] WASCA 137
- Decision Date
CaseChat Overview and Summary
The legal issues before the court involved whether the primary judge misapprehended and misapplied the decision in Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd by finding that the assumption of recoverability was not reasonable, rather than whether it was reasonably open to the appellant. The court also considered whether the primary judge erred in not providing adequate reasons for the factual finding that the appellant did not hold the recoverability assumption, and whether there were errors in the findings regarding the appellant's reliance on the assumption and the potential detriment caused by the respondent's departure from the assumption.
The court found that the primary judge did not misapply the doctrine of promissory estoppel but rather did not address the issue of whether the assumption was reasonably open to the appellant. The court held that the primary judge's reasoning was inadequate in failing to consider whether the assumption was reasonably open to the appellant. The court further found that the primary judge erred in his findings concerning the appellant's reliance on the assumption and the potential detriment caused by the respondent's departure from the assumption. The appeal was allowed, and the matter was remitted to the primary judge for further consideration.
The court made orders that the appeal be allowed, the decision of the primary judge be set aside, and the matter be remitted to the primary judge for further consideration in light of the findings of the court. The appellant was also awarded costs of the appeal.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
The doctrine of equitable promissory estoppel operates to prevent a party (who we will refer to as the 'charged party') unconscientiously departing from an assumption or expectation which it has induced another party (who we will refer to as the 'claimant') to adopt and to act in reliance on to its detriment. This court has previously approved the following summary of the principle:[F]or there to be an equitable estoppel there must be the creation or encouragement of an assumption that a contract will come into existence or a promise be performed, and reliance upon that promise in circumstances where departure from the assumption by the [charged party] would be unconscionable.[127][127] Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1 [3543(e)]. The quotation is part of a substantially longer passage all of which has been referred to with approval in this court. See Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191 [194]; Birla Nifty Pty Ltd v International Mining Industry Underwriters Ltd [2014] WASCA 180; (2014) 47 WAR 522 [110]. To similar effect see Commonwealth v Verwayen (444 par 2), (455 - 456). Equitable estoppels (promissory and proprietary) are distinguished from common law estoppels by the circumstance that equitable estoppel is concerned with conscience - in particular with the prevention of unconscionable insistence on strict legal rights.[128] Thus it is said that the equitable doctrines result in new rights between the parties when it is unconscionable for a party to rely on his or her strict legal rights.[129] Nettle J has explained that the 'foundational principle on which equitable estoppel in all its forms is grounded is that equity will not permit an unjust or unconscionable departure from an assumption or expectation of fact or law, present or future, which that party has caused another party to adopt for the purpose of their legal relations'.[130][128] P Brereton Equitable Estoppel in Australia: The Court of Conscience in the Antipodes page 5. See also at pages 7, 11 - 12.[129] Commonwealth v Verwayen (500). See also (436 - 437), (440 - 441).[130] Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [213]. See also [211]. Equitable estoppel has its basis in unconscionable or unconscientious conduct - and preventing the suffering of detriment occasioned thereby - rather than making good assumptions or expectations or bringing about the enforcement of promises.[131] It is grounded in the body of equitable doctrine that prevents unconscientious assertion of claimed legal rights.[132] The fundamental object of equitable estoppel is to protect a claimant against unjust detriment which would flow from the charged party's change of position if the charged party were permitted to depart from an assumption or expectation held by the claimant as induced by the charged party's representation or conduct.[133] It is the action or inaction of the claimant as induced by the charged party which is the foundation for equitable intervention as '[i]t is not the breach of promise, but the promisor's responsibility for the detrimental reliance by the promisee, which makes it unconscionable for the promisor to resile from his or her promise'.[134] So understood, detriment is relevant both in establishing the basis for the estoppel and in determining the appropriate relief. It also demonstrates that, while distinct concepts, there is a relationship between detriment and unconscionability.[131] Waltons Stores (Interstate) Ltd v Maher (405); Commonwealth v Verwayen (411), (429), (501).[132] Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14; (2014) 253 CLR 560 [86]. See also Commonwealth v Verwayen (428 - 429) where Brennan J summarises the effect of the judgments of the majority in Waltons Stores (Interstate) Ltd v Maher.[133] Waltons Stores (Interstate) Ltd v Maher (404), (416), (418 - 419), (421), (423), (426 - 427), (453), (458); Commonwealth v Verwayen (409 - 411), (423), (453), (501); Sidhu v Van Dyke [1], [77], [82]; Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [84] - [86]; Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [39], [139] - [141], [217] - [218]. See also Grundt v Great Boulder Pty Gold Mines Ltd [1937] HCA 58; (1937) 59 CLR 641, 674 - 675 (Dixon J's passage there being the source for many of the later statements as to the purpose of an estoppel).[134] Sidhu v Van Dyke [58]. See also Giumelli v Giumelli [35].