Example Of Essay On Doctrine Of Promissory Estoppel
This paper seeks to review and analyze the Doctrine of Promissory Estoppel and its application within the Australian legal jurisdiction. According to this doctrine1, it was formulated with the overriding objective of preventing the inequitable dissemination and application of the common law in Australia. However, the Australian courts have recently expended the interpretation and application of the doctrine to the extent that certain critical considerations that are contained in this doctrine are now deemed to be irrelevant2. In this regard, this paper will seek to understand and analyze the origins of this doctrine within the Australian legal system, and the effects that numerous successive rulings by the Australian courts may have had on the doctrine as a legal precedent.
Doctrine of Promissory Estoppel
The doctrine of promissory estoppels refers to the principle which states that a promise is legally enforceable if the person making the promise makes a promise which is subsequently relied on by the person who has been promised, and the promise leads the latter party to suffer injury or different types of losses. In this regard, the person making the promise is referred top as the promisor, while the person who receives the promise is referred to as the promissee3.
The overriding objective of the doctrine of estoppel is the prevention of the denial; by the promisor of making statements, actions and insinuations that did not come to pass, and which is relied on by the promisee. Consequently, this doctrine can be said to have been formulated to protect the promisee from subsequent denials of the promises by the promisor, especially in situations were the promisee relied on this promise, and he suffered injury or other types of legally recognized losses. From a legal perspective, the doctrine of promissory estoppel can be viewed as a legal precedent that prevents malicious actions by the promisor on the promisee4.
Origin of the Doctrine in Australian Law
As a result of the strong traditional between the English legal system and the Australian law, numerous components of the Australian legal framework were largely borrowed and adopted from the English legal framework. Accordingly, the doctrine of promissory estoppels was first widely applied in the English legal system before it was adopted much later into the Australian legal system.
In England, the doctrine of promissory estoppel was first introduced in 1877 through the Hughes Vs. Metropolitan Railway co. case5. Numerous subsequent cases involving this doctrine have been recorded in England since this first case, and they have formed the precedent which has been followed by courts of smaller jurisdiction over time. These cases include the Birmingham and District Land Company v London and NW Railway Company Case of 1988, and the Legive case of 19836. Theses case were initially used as the legal precedents of the doctrine of promissory estoppel when it was first introduced into the Australian Legal system.
In Australia, the doctrine of promissory estoppel was first introduced in 1983 in the case of Legione vs. Hartley7. This case was heard at the ALJR 292 High Court room of Australia. In this case, a property buyer who was interested in a particular parcel of land requested its owner to grant him an extension so as to come up with the required amount of money. However, the property seller declined the request for the extension. The property buyer then approached the seller`s solicitors and he offered them the option of settling the debt on 17 August 1983, which was 7 days overdue from the required settlement date. The secretary at the solicitors’ office made a statement which implied that this proposal may have been acceptable to the solicitors, but she required further confirmation on this matter form her superiors. A few days later, the property buyer received information from the solicitors that the purchase contract of the property had been rescinded. The buyer then moved to court, citing the doctrine of promissory estoppel in regards to the statements that were made by the solicitor’s secretary. The court ruled that this doctrine did not apply in this case because the promise made would have to be clearly implied and not necessarily expressly articulated by the promisor, and these two conditions were not met as a minimum threshold in this context8.
Types of Estoppel
Reliance-based Estoppel – this principle of the doctrine of promissory estoppel applies in a situation when one party directly relied on the statements and actions that were made by another party. In this regard, the party who relied on the statements is the promisee while the maker of these statements is legally perceived as the promisor9. According to this principle, the promisor is subsequently esttopped by the doctrine in regards to the underling legal matter.
Estoppel by Record – This principle applies in a situation where the judgment made in regards to a legal matter touching on the doctrine of estoppel is based primarily on previous legal precedents that were set by higher courts at an earlier point in time. In this regard, these earlier precedents are used to prevent the involved parties from repeating the same outcomes that were previously cited in the earlier legal precedent of the underlying promises in question.
Estoppel by Deed – this principle adequately encompasses the overall notion of the doctrine of promissory estoppel because it touches on the core components of the doctrine. In this regard, this principle is intended at preventing a litigant from denouncing or denying any statements and actions that are made in relation to a particular promise made to a promisee. Consequently, this principle holds the promisor to account for all the damages that may have arisen as a result of the promises that he made, and which he cannot subsequently deny.
Estoppel By Silence – this principle also touches on a core element of the doctrine of promissory estoppels in regard to the actions that may arise as a result of previous promises that were made by an individual10. In this regard, this principle prevents the maker of a promissory statement who is referred to as a promisor, from asserting a statement at subsequent period of time, after the ideal opportunity for him to make such statements may have already passed. As a result, the promise involved in such a case is put at a position of disadvantage by these unfair actions by the promisor.
Laches – this principle of the doctrine of promissory estoppel usually arises in a situation where a promisor deliberately decides to delay the making of a promissory statement or action with the intention of putting the promisee in a position of disadvantage12. In this regard, these actions by the promisor are perceived from a legal perspective to be malicious and intended at causing losses to the promissee.
Effects of Court Decisions on the Doctrine of Estoppel in Australia
According to D. J. Vermayen, the Australian Doctrine of Estoppel stipulates that the court of common law and equity must do all that is required to ensure that the promisee does not suffer significant detriments or injuries arising from actions made based on the assumption implied by the underlying promise13. However, Vermayen also adds that in undertaking this mandate, the courts must realize that the Australian Doctrine of Estoppel is currently at different stages of its development. These stages of development have often been manifested by the different decisions of the Australian High Court that have involved different terminologies by the judges, and an overall difference in their interpretation of this doctrine within the Australian legal system14. These differences in most instances have created confusion in relation to the subsequent interpretation of the doctrine.
Consequently, the current prevailing state of the implementation of the doctrine of Estoppel in the Australian legal system implies that in the event that it is not possible to propose specific formulations of the doctrine, it is subsequently not possible to give a concise representation of this doctrine in Australia. This ability of the doctrine within the Australian legal system may also be attributed to the fact that it can be used by two parties who may not necessarily be in partnership with one another as a source of defense or action to duly remedy each other15.Accordingly, the courts of common law and equity in Australia interpret the doctrine of estoppel as having been established where one party can demonstrate that they took action and suffered corresponding detriments based on the assumptions that were implied in relation to a particular promise by another corresponding party.
The courts of common law and equity in Australia require that the doctrine of estoppel must be implemented on the basis of certain considerations that are made in determining whether it would be unconscionable for one of the concerned parties not to compensate or remedy the other party for the loss or detriment that they suffered due to their dependence on the implied assumptions of the underlying promise. In this regard, the main considerations that are made in determining this conscionability are the remedies stipulated through which a claim can arise based on the Australian doctrine of estoppel at a particular point in time.
Some of the courts of common law and equity have alluded to the fact that care should be taken in ensuring that the Australian doctrine of estoppel does not become a legal system where all the answers to different critical questions in legal cases of the future will be decided purely at the behest of the presiding judge. However, the prevention of unpredictability within Australian courts in regards to this doctrine will require the making of decisions that balance a clear criterion in the interpretation of this doctrine. The objective of this approach is the creation of a judicial modus operandi which yields less predictable decisions than would have been the case if the traditional decision making approaches were used in a particular context. In this regard, this traditional decision making and legal interpreting model refers to the syllogistics reasoning method which is used at a large scale within legal circles.
The above decision making process which is directed at reducing predictability of legal outcomes is summarized by Sir Thomas Bingham. He states that decisions that are significantly based on these guidelines will represent those rulings in which the arbitrary discretion dragon in legal terms will have been accordingly slayed by this legal system. Gallighan also contributes to this debate on the making of legal decisions based on certain guidelines to prevent predictability. In this regard, Gallighan adds that this framework has created an ideal system in which a reasonable comprise can be formulated by the overall certainty and the specific application of the justice system.
The courts of common and equity in Australia require that a judge or other legal authority must start by determining whether or not it might be unconscionable for one of the parties who made an assumption not to remedy the other party who suffered significant detriments based on this promise. In this regard, the biggest dilemma for the courts and their authorities is where the said consideration can be found in the context of these cases. Accordingly, these considerations are found within the principles and clauses that comprise the Australian Doctrine of estoppel.
One of the major considerations that the courts now require in the implementation of the Australian doctrine of estoppel is the confirmation that the assumptions implied by a promise are mainly relevant to the case at hand in terms of the level to which the aggrieved parties relied on them in taking their corresponding actions. Accordingly, the courts of common law and equity also demands that the process of the determination of the doctrine of estoppel within the Australian legal system must effectively consider how the said assumptions which caused detriments to the promise were induced, given a particular case at hand.
The Australian doctrine of estoppel also demands that the overall existence of this estoppel must consider carefully the role which was played by the inducing parties based on the implied assumptions of the promise in the process of adopting the estoppel. Another major consideration which is made in regards to the Australian doctrine of estoppel is the manner and fashion through which the underlying assumptions were induced. In this regard, the courts of common law and equity in Australia will prioritize assumptions that were induced based on express representation as opposed to the use of other forms of communication. These channels include the inducement through the conduct of the promisor, or the use of silence as a communication channel. According to Deane, J. Vermayen, the primary considerations that must be made in determining whether the assumption were induced in appropriate manner is the consideration whether the inducement was made through expression of contract relationships between the parties; the exercise of rights contained in a contracting relationship; and finally, the knowledge by the other parties of the inducement of the assumptions by the promisor.
This paper has reviewed the development of the Doctrine of Estoppel within the Australian legal systems from the time when it was first introduced. The definition and a comprehensive description of the different types of estoppel have also been reviewed in this paper. The role that the courts have played in the development of the doctrine of estoppel within the Australian legal system and the contribution of different authorities has also been undertaken in this paper.