Commonwealth v Verwayen (LAWS1050)

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Citation: (1990) 170 CLR 394

This information can be found in the Textbook: Paterson, Robertson & Duke, Principles of Contract Law (Lawbook Co, 3rd ed, 2009), pp. 153-4 [9.80]

Contents

Background facts

  • Verwayn was a soldier, claimed damages from the Commonwealth for negligence.
  • Commonwealth made representations that a policy has been made not to try defend those claims in court.
  • In reliance on those assumptions, Verwayn continued with his claim in reliance on those representations.
  • Commonwealth changed its policy, tried to defend itself in court

Argument

  • Commonwealth irrevocably waived its right to plead defence
  • Or alternatively, the Commonwealth should be estopped from going back on its promise not to defend.

Legal Issues

Judgment

Detrimental Reliance

  • Deane & Dawson JJ:
    • Estoppel arose
    • Detrimental reliance can be non-financial, but must be affirmatively demonstrated
    • Reliance loss came in a non-financial form of increased stress, anxiety, inconvenience and ill health.

Relief

  • Deane J:
    • Relief should come in the form of ensuring the Commonwealth ‘makes good’ of its promise – specific performance.
    • This protects the Relying Party’s expected interest.

Cause of Action

  • Deane J:
    • Estoppel “does not in itself constitute an independent cause of action.[1]
  • McHugh J:
    • “The equitable doctrines of estoppel create rights. They give rise to equities which are enforceable against the party estopped.[2]
  • Brennan J:
    • “in strict theory, a party who is entitled to equitable relief to make good some detriment suffered in reliance on a promise has a cause of action.[3]
  • Court recognised that the court exercises discretion in giving effect to equitable estoppel. The discretion means that it is the estoppel which generates the remedy.
  • Remedial flexibility argument: Court recognised that the court exercises discretion in giving effect to equitable estoppel. The discretion means that it is the estoppel which generates the remedy, and thus it is a cause of action.

References

  1. (1990) 170 CLR 394, 445
  2. (1990) 170 CLR 394, 500
  3. (1990) 170 CLR 394, 430
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