Menu
Home
Log in / Register
 
Home arrow Law arrow The principles of the law of restitution
Source

(i) Establishing the Estoppel

To establish liability for equitable estoppel a number of conditions need to be satisfied. The defendant must have created or encouraged a belief or expectation on the part of the claimant that he or she would receive some benefit and the claimant must have relied on this to his or her detriment and to the knowledge of the defendant.[1] Sometimes it has been recognized that, rather than the defendant encouraging the claimant’s mistaken expectation, it is sufficient that the defendant has acquiesced in this mistake.[2] Finally, the defendant must have done something or refrained from doing something which prevented the claimant’s expectation from being fulfilled.[3]

(ii) Identifying the Appropriate Relief

Once liability for equitable estoppel has been established the court will determine what is the minimum equity to do justice to the claimant. The range of remedial relief for equitable estoppel was identified by Brennan J in Waltons Stores (Interstate) Ltd v Maher:[4]

Sometimes it is necessary to decree that a party’s expectations be specifically fulfilled by the party bound by the equity; sometimes it is necessary to grant an injunction to restrain the exercise of legal rights either absolutely or on condition; sometimes it is necessary to give an equitable lien on property for the expenditure which a party has made on it.

In identifying the minimum equity the court will consider all the circumstances of the case, but particularly the nature of the defendant’s conduct[5] and the competing interests of the parties. The relief must not be disproportionate to the claimant’s detriment.[6]

Normally the relief which is awarded to satisfy the claimant’s equity cannot be characterized as gain-based, since the response is tailored simply to satisfy the claimant’s expectations which were induced by the defendant.[7] For example, in Dillwyn v Llewelyn[8] the defendant purported to give land to the claimant and approved of the claimant’s construction of a building on the land. The gift was invalid and so the defendant remained owner of the land. But, since the claimant had spent money constructing the building in reliance on his expectation of title, and the defendant knew this, it was considered to be unconscionable for the defendant not to satisfy the claimant’s belief that he owned the land. Consequently, the defendant was required to transfer the land to the claimant. This was not a restitutionary remedy, since it was not assessed by reference to the defendant’s gain as a result of his wrongdoing, but it was a remedy which existed simply to fulfil the claimant’s expectations.[9]

But exceptionally the relief which is awarded can be characterized as gain-based. For example, in Chalmers v Pardoe[10] the defendant, who had leased land from the Native Land Trust Board of Fiji, agreed that the claimant could build a house on part of the land. The defendant also agreed that he would ensure that the claimant became tenant of the land on which the house was built. The claimant consequently built the house but the defendant declined to take the necessary steps to enable the claimant to become the tenant. The Privy Council would have been prepared to grant an equitable charge on the land for the benefit of the claimant but, because the prior consent of the Native Land Trust Board had not been obtained, the transaction was consequently illegal. The Privy Council did, however, recognize that, because it was unconscionable that the defendant should retain the benefit of the building, he would be required to repay to the claimant the sums expended upon the construction of the house. Clearly this remedy can be characterized as restitutionary since, rather than fulfilling the claimant’s expectations, it simply sought to restore the benefit which had been received by the defendant.

  • [1] Gillett v Holt [2001] Ch 210.
  • [2] Ramsden v Dyson (1866) LR 1 HL 129, 140-1 (Lord Cranworth).
  • [3] Attorney-General of Hong Kong v Humphreys Estate (Queen’s Garden) Ltd [1987] 1 AC 114.
  • [4] (1988) 164 CLR 387, 419.
  • [5] Pascoe v Turner [1979] 1 WLR 431, 436 (Cumming-Bruce LJ).
  • [6] Sledmore v Dalby (1996) 72 P & CR 196, 204 (Roch LJ).
  • [7] E Cooke, ‘Estoppel and the Protection of Expectations’ (1997) 17 LS 258.
  • [8] (1862) 4 De GF and J 517, 45 ER 1285.
  • [9] See also Inwards v Baker [1965] 2 QB 29; Crabb v Arun RDC [1976] Ch 179; Salvation Army TrusteeCompany v West Yorkshire Metropolitan County Council (1981) 41 P & CR 179.
  • [10] [1963] 1 WLR 677. See also The Unity Joint Stock Mutual Banking Association v King (1858) 25 Beav 72,53 ER 563 and Lee-Parker v Izzett (No 2) [1972] 1 WLR 775. Hussey v Palmer [1972] 1 WLR 1286 is anothercase where the relief can be characterized as restitutionary since the claimant was content to recover herexpenditure rather than to receive an interest in the property to which she had contributed.
 
Source
Found a mistake? Please highlight the word and press Shift + Enter  
< Prev   CONTENTS   Next >
 
Subjects
Accounting
Business & Finance
Communication
Computer Science
Economics
Education
Engineering
Environment
Geography
Health
History
Language & Literature
Law
Management
Marketing
Mathematics
Political science
Philosophy
Psychology
Religion
Sociology
Travel