Confronting the Forms of Action: the Emergence of Substantive Estoppel Introduction

Linda Kirk* CONFRONTING THE FORMS OF ACTION: THE EMERGENCE OF SUBSTANTIVE ESTOPPEL INTRODUCTION

The fonns of action we have buried but they still rule us from their graves. 1

he deepest, most crucial problem facing the legal system today is embracing and understanding the significance and effects of the abolition of the forms of action.2 The challenge goes beyond simply an appreciation of the impact of the Judicature Acts on the T procedural features of the law, to an understanding of the role of the Acts in the evolution and development of its substantive doctrines. The passage of the Judicature Acts did little to enhance the development of the legal system. On the contrary, the interpretation of the Acts by the judges in the nineteenth century hindered its development by converting procedural restrictions into substantive doctrines of law. As a consequence, the substantive law became trapped within the interstices of procedure,3 procedure which had been made obsolete by the Acts. This article reveals how the High Court of Australia is taking up the challenge presented by Maitland's immortal words. It is engaged in a process of the further abolition of the fonns of action, beyond that effected by the Judicature Acts.

The abolition of the forms of action was thought to have been effected by the Judicature Acts of 1873-1875. These Acts sought to fuse the administration of common law and equity, and to remove the fonns of

* LLB (Hons) BEe. This is a modified version of a dissertation submitted in partial fulfillment of the requirement for an Honours Degree in the Faculty of Law, University of Adelaide, 1990 entitled "Burying the Ghosts of the Past: The Abolition of the Forms of Action. Maitland, The Forms of Action at Common Law (Cambridge, Cambridge University Press 1976) pl. 2 Detmold, "Australian Law: Freedom and Identity" (1990) 12 Syd LR 482 at 511. 3 Maine, Early Law and Custom (John Murray, London 1883) p389. 226 KIRK - CONFRONTING FORMS OF ACTION action. However, in fact, the effect of the Acts was simply to remove the procedural restrictions which the fonns imposed. They did not remove the requirement of establishing a cause of action in a substantive sense. Courts continued to require that plaintiffs establish a cause of action before a claim would succeed. However these causes of action were inextricably linked to the old common law forms of action in that the procedural requirements of the forms, such as consideration, still had to be satisfied before a claim could be successfully made out. To this extent, the forms of action continued to dominate the law, emerging as substantive requirements where they had previously been merely procedural limitations. The fusion of law and equity also played an important role in the development of the substantive law in the post-Judicature system. Prior to the passage of the Judicature Acts, law and equity existed side by side and developed their own rules for the enforcement of representations. At common law, in order for a promise or representation to give rise to legal consequences, it was necessary for the plaintiff to establish either contract or fraud fonn of action. However equity took a more lenient approach, and looked not so much to the requirements of the fonns, but to the substantive merits of the case when deciding whether the equitable jurisdiction could be invoked and equitable remedies provided. Equity's approach was reflected in its attitude to both contract and fraud forms of action. Its concept of consideration was more broadly based and it would enforce an agreement where the common law would refuse to do so. Furthermore, equity's approach to fraud was more sympathetic in that it did not require proof of actual dishonesty. The development of fraud in equity gave rise to a jurisdiction to make representations good, a jurisdiction which existed alongside contract and fraud forms of action as recognised by the common law.

The fusion of the administration of the two jurisdictions of law and equity, as effected by the Judicature Acts, inevitably led to a collision of these two competing and sometimes inconsistent jurisdictions. There was a need to rationalise these two divergent streams if judges were to administer them both in the same court. Inevitably this required one of the two bodies of law to emerge triumphant in the post-Judicature system. It was the common law which was the victor in the field of promissory obligation. Common law concepts of consideration and fraud replaced the more flexible equitable doctrines, reinforcing the continued dominance of the fonns of action. This in turn led to a period of rationalisation of the case law in the now fused system. This was an inevitable result of the common law emerging (1991) 13 ADEL LR 227 victorious in the post-Judicature system. Precedents which were inconsistent with common law conceptions and doctrines had to be over-ruled if the system was to operate efficiently and effectively. The result was the over ruling of the line of cases which established a jurisdiction to make representations good. This was the only way that the sanctity of contract fonn of action could be preserved. The result· was to guarantee, in a substantive sense, the dominance of the common law forms of action.

This was the state of the law until recent times. However, the High Court case of Waltons Stores (Interstate) Ltd v Maher4 provided a fundamental challenge to this historical development of the law. Through the development of a 'new' fonn of action in promissory estoppel, the case opens up the possibility of regulation of relationships presently untouched by the law. Promissory estoppel as a fonn of action has the potential to resurrect equity from the grave dug for it by the Judicature Acts, and in doing so, to deny the place of the fonns of action in the modern system of law.

However the decision did not go so far as to remove the forms of action from the legal system. This is because the Court was trapped within a legal system which is so inherently fonn-bound that its substantive principles cannot be stated independently of the forms of action. As Maine said, "the substantive law is secreted in the interstices ofprocedure".5

However, in Commonwealth v Verwayen,6 Chief Justice Mason indicated his willingness to confront the nineteenth century precedents which guaranteed the continued role of the fonns of action. His Honour's judgment is a classic example of the flexibility which can arise from burying the fonns of action. The case also exposes the rigidity and inconsistencies which result from a continued adherence to the forms of action.

The challenge which Waltons Stores and Verwayen present to the law is the task of determining how, once the substantive restrictions of the forms are removed, rights and duties will be determined and remedies provided. Once the shackles of the past have been cast off, it will be possible to develop the substantive law behind the forms of action.

4 (1988) 164 CLR 387. 5 Maine, Early Law and Custom p389. 6 (1990) 95 ALR 321. 228 KIRK - CONFRONTING FORMS OF ACfION ESTOPPEL

Before the passage of the Judicature Acts, there was in equity a well developed jurisdiction to 'make representations good' which existed alongside the jurisdiction at common law to enforce 'contracts'. The two jurisdictions were, at the time the Acts were passed, quite divergent and inconsistent in their approach to the enforcement of agreements. The collision brought about by the Judicature Acts required one to emerge victorious. It was the common law which triumphed and the sanctity of a contract form of action was preserved.

The jurisdiction to 'make representations· good' emerged as a result of equity's approach to fraud. At common law, from the earliest times, where a representation of fact falsely made was relied on by another, an action lay in the tort of deceit. The leading case was Pasley v Freeman.7 The action for deceit held a person responsible for the truth of an assertion made. When the person making the statement knew it to be false and made the statement with the view of thereby inducing the other to do an act, whereby that person received an injury, an action would lie at his or her suit against the person who made the statement, although he or she may have derived no profit or advantage from it. 8

As the cause of action was fraud in these cases, equity had a concurrent jurisdiction.9 In 1801 in Evans v Bicknell10 Lord Eldon expressed the view that the action in Pasley v Freeman could have been maintained in equity as an obligation to make good a representation known to be false. However in 1805 this principle was applied in equity, where there was no allegation of fraud, in Burrowes v Lock.11 In this case the plaintiff had taken an assignment of the interest of X in a fund of which the defendant was trustee. To the knowledge of the defendant, X had made a prior assignment to Y, yet in response to an enquiry by the plaintiff the defendant, honestly but carelessly, asserted in unambiguous language that the interest of X was unencumbered. 12

7 (1789) 3 Term Rep 51. 8 Dawson, "Making Representations Good" (1982) 1 Cant LR 329 at 330. 9 Hill v Lane (1870) LR 11 Eq 215 at 220-221. 10 (1801) 6 Yes 174. 11 (1805) 10 Yes 470. 12 Today such a case would be characterised as one ofnegligent misrepresentation. (1991) 13 ADEL LR 229

In this jurisdiction, equity went further than the common law and did not enquire whether the person making the statement knew that it was false. Equity took the view that if a deliberate statement was made by one person to another with the intention that it be relied upon, the person who made the statement was held to it and was compelled to make the statement good. 13 Equity's notion of what constituted fraud is described by Story in his treatise on Equity Jurisprudence,14

Whether the party thus misrepresenting a material fact knew it to be false, or made the assertion without knowing whether it were true or false, is wholly immaterial; for the affmnation of what one does not know or believe to be true is equally in morals and law as unjustifiable as the affmnation of what is known to be positively false. And even if the party innocently misrepresents a material fact by mistake, it is equally conclusive, for it operates as a surprise and imposition upon the other party.

The other line of cases where equity required representations to be 'made good' was concerned with informal marriage settlements which faced problems due to the Statute ofFrauds. 15 The leading authority for this line of cases was Hammersley v De Biel. 16 In these cases, a representation of intention which was seriously made, and which to the knowledge of the person making it was going to be acted upon by the person to whom it was made, was binding in equity as soon as it was acted upon, even though the formalities had not been complied with.

At this time the common law courts were willing to admit the force of a representation, but only for the purposes of establishing another cause of action.17 In Pickard v Sears,18 an action was brought in trover at common law. The court admitted the force of a representation made in establishing the basis of the cause of action in trover. In a much cited judgment, Lord Denman CJ stated,19

13 Dawson, "Making Representations Good" (1982) 1 Cant LR 329 at 330. 14 Story, Equity Jurisprudence Vol I (Little Brown, Boston, 13th ed 1886) para 193, emphasis added. 15 29 Car II c3 s4 requires that dispositions of land must be in writing and signed. See s26 Law ofProperty Act 1936 (SA). 16 (1845) 12 CI &F 45; 8 ER 1313. 17 It was, in effect, simply a rule of evidence. 18 (1837) 6 A& E 469. 19 Pickard v Sears at 474. 230 KIRK - CONFRONTING FORMS OF ACTION

But the rule of law is clear, that, where one by his [sic] words or conduct cause another to believe the existence of a certain state of things, and induces him to act on that belief, so as to alter his own previous position, the former is concluded from averring against the latter a different state of things as existing at the same time...

In Freeman v Cooke,20 Parke B after citing Pickard v Sears, expressed the principle (at law) that a man [sic] is estopped from denying what he has represented, not only when he represents as true that which he knows to be untrue, but also when, whatever his

real intention may be he [sic] so conducts himself that a reasonable man would take the representation to be true, and believe that it was meant that he should act upon it and did act upon it as true.

These two judicial statements are universally regarded as the origin of the law ofestoppe1.21

Courts of law were therefore willing to admit the force of a representation in establishing the basis of an independent cause of action. In Pasley v Freeman there was an action brought in the tort ofdeceit. The representation was admitted only to establish the basis of the action in fraud. Although the action was successful, there was no hint that it could have been based on the representation itself Therefore had the representation been innocent, the action would have failed. 22 Similarly in Pickard v Sears and Freeman v Cooke the representation was admitted to fonn the basis of an independent action in trover.

In contrast, the Chancery Courts allowed the representation itself to be the cause of action. Equity was prepared to admit a suit which, although it was said in Evans v Bicknell that the action was similar to the action in deceit brought in Pasley v Freeman, was really quite dijferent.23 In equity it was not necessary to show an independent cause of action in order for the claim to succeed as the action was brought on the representation itself. It acted as a

20 (1848) 2 Exch 654 at 663. 21 Although the word 'estoppel' does not appear in either case. However, in Freeman v Cooke the word 'estoppel' appears in the judgment at 662. 22 Jackson "Estoppel as a Sword" (1965) 81 LQR 84 at 87. 23 As above. (1991) 13 ADEL LR 231 sword in the sense that it established a cause of action based solely on the representation. Equity enforced the representation or gave compensation in lieu.24 The remedy was moulded to fit the circumstances of the case.25 Usually this meant that the court would order that the representation be made good 26 but on occasion a court might order recission,27 or an injunction,28 or even that a representor's security be postponed to the representee's.29

Prior to the fmn establishment of consideration as a necessary element in contract form of action in Eastwood v Kenyon,30 it could well have been that these representations established a contract as understood by equity,31 as the equitable concert of consideration was more broadly based than that of the common law.3 However after the establishment of consideration as a necessary requirement to make out a claim in contract fonn of action, these decisions enforcing representations in the absence of consideration could only be regarded as establishing an independent equitable jurisdiction for making representations good.33

The doctrine was made workable because the Equity judges carefully defined what sort of conduct in reliance was to be protected.34 However the

24 At 88. 25 The remedy was at large and in the discretion of the court. See Pulsford v Richards (1853) 17 Beav 87 at 94-96; 51 ER 965 at 968-969, per Sir John Romoly MR. 26 Burrowes v Lock; Slim v Croucher (1860) 1 De GF & J 518; 45 ER 462. 27 Pulsford v Richards. 28 Piggott v Stratton (1859) 1 De GF & J 33; 45 ER 271. 29 Thompson v Simpson (1870) LR 9 Eq 497. 30 (1840) 11 Ad and Eat447. 31 Some of the seventeenth century cases could be based on contract, as defined today, as distinct from representation. See Hunt v Carew (1649) Nels 46; Hunsden v Cheyney (1690) 2 Vern 150. Cases of simple representation implying an obligation are Hobbs v Norton (1682) 1 Vern 136, relied on in Burrowes v Lock and Wankford v Fotherley (1694) 2 Vern 322. 32 This is discussed in detail in chapter 1 of Kirk, "Burying the Ghosts of the Past: The Abolition of the Forms of Action", Faculty of Law, University of Adelaide, Unpublished Thesis, pp14-19. 33 Jackson, "Estoppel as a Sword" (1965) 81 LQR 84 at 88. 34 Dawson, "Making Representations Good" (1982) 1 Cant LR 329 at 334; Maunsell v Hedges (1854) 4 HLC 1039; 10 ER 769 is a good example of a representation being couched in such terms that the representee could not be said to have reasonably placed reliance upon it. 232 KIRK - CONFRONTING FORMS OF ACTION similarity of this jurisdiction with that of contract fonn of action at common law resulted in the language of contract "bedevilling many of the equity cases".35 For example in Dillwyn v Llewelyn,36 Lord Westbury concluded that,

if A puts B in possession of a piece of land and tells him, "I give it to you that you may build a house on it" and B on the strength of that promise, with the knowledge of A, expends a large sum of money in building a house accordingly, I cannot doubt that the donee acquires a right from the subsequent transaction to call on the donor to perform that contract and complete the imperfect donation which was made.

It was the "erroneous equation" of contract fonn of action with this equitable jurisdiction to make representations 200d which planted the "seeds of destruction" of the doctrine itself.3T The frrst step in the doctrine's destruction was the decision of the House of Lords in Jorden v Money. 38 In this case Mrs Jorden was entitled to a bond which Money had given to secure the payment of a sum of money owed to Mrs Jorden's brother. The brother died leaving all his property to Mrs Jorden. Money who was about to be married was told by Mrs Jorden that she would never enforce the bond. Money subsequently married and certain property settlements were made on the couple which would not necessarily have been made had the assurance not been made. However Mrs Jorden changed her mind and sought to enforce the bond. Money sought an injunction restraining Mrs Jorden from enforcing execution of the judgment entered on ·the bond which she had obtained. Money argued that he was entitled to relief in equity in accordance with the doctrine of making representations good.39 An injunction was obtained at frrst instance but on appeal to the House ofLords it was held that there was no evidence which would found an estoppel within the making representations good doctrine. While emphasising what was said to be the unity of the doctrine at common law and in equity,40 their Lordships

35 Finn, "Equitable Estoppet in Finn (00), Essays in Equity (Law Book Co, Sydney 1985) p64. 36 (1862) 45 ER 1285 at 1286, emphasis added. 37 Finn, "Equitable Estoppel" in Finn (ed), Essays in Equity p64. 38 (1854) 5 HLC 154; 10 ER 868. 39 Money was the plaintiff in equity and therefore needed a ground to supoort his bill. His cause of action was fraud in the equitable sense. Dawson, "Making Representations Good" (1982) 1 Cant LR 329 at 338. 40 Jorden v Money at 210; ER at 880 per Lord Cranworth. (1991) 13 ADEL LR 233 considered that the doctrine applied only if there was a representation offact and not if there was only a representation of intention.41 Hammersley v De Biel was not referred to in the judgment. In dissent, Lord 5t Leonards was of the view that a representation ofintention was sufficient.42

Jorden v Money was decided before the passage of the Judicature Acts and is classic fonns of action reasoning. The majority of the House of Lords identified Money's cause of action as lying in fraud. Therefore in order for him to succeed it was necessary for him to satisfy the requirements of a fraud fonn of action. Fraud (at law) required a false representation of fact. On the facts, the representation was neither false nor of fact. Equity was prepared to intervene where the representation, although not false, was relied on by the representee, to estop the representor from denying knowledge. However, the cause of action remained fraud and this required a statement of fact. As there was no assertion of fact made by Mrs Jorden, but a promise, the action in fraud necessarily failed. The House of Lords was unwilling to recognise that in equity, the cause of action is based on the representation itself. Equity did not require the claim to come within the strict requirements ofa fraud fonn of action.

The House of Lords completely ignored the jurisdiction of making representations good as derived from the equitable conception of fraud. The effect of the decision was to colonise the enforcement of representations as to the future, or 'promises', within the law of contract, as a contract form of action was the only medium available for the enforcement of representations other than those of fact. It established that in order for a refresentation of intention to be enforced it must be contained in a contract.4 The House of Lords refused to recognise that in equity an action could be founded on the representation itself. It insisted on the position at common law that the representation could only be used as evidence to make out an independent cause of action in contract or fraud.

Despite the inroad made in the law by Jorden v Money, after the decision equity continued to give effect to representations of intention under the doctrine of making representations good. In Stephens v Venables (No 2),44

41 At 214-215; ER at 882, per Lord Cranworth; at 225-227; ER at 886-887, per Lord Brougham. 42 At 251; ER at 896-897. 43 Jorden v Money was subsequently accepted in the post-Judicature system in Chadwick v Manning [1896] AC 231. 44 (1862) 31 Beav 124 at 127-128; 54 ER 1084 at 1086. 234 KIRK - CONFRONTING FORMS OF ACTION

Lord Romilly MR treated Burrowes v Lock as surviving the decision in Jorden v Money.45 However all these cases were decided in the pre Judicature system when the streams of law and equity were still apart and free to develop their own rules and doctrines.

However, the passage of the Judicature Acts changed all this. Ifthere was to be fusion between the two administrations of law and equity, and if the same law was to be administered in the one court, then inevitably the two jurisdictions had to be reconciled. The judges could no longer continue to 'wear two hats'. In a fused system, one set of facts demanded one set of principles to give one right answer.46 However, at law, a promise was binding only if it was bargained for, that is, if it was contained in a 'contract', whereas in equity the doctrine of making representations good postulated that a promise or representation may be binding if it was intended to be relied upon, and was in fact relied upon.47 The collision of the two jurisdictions effected by the Judicature Acts meant that inevitably one of the two had to give way. It was the common law which emerged victorious.

Inevitably, in this process ofreconciliation made necessary by the Judicature Acts, Hammersley v De Biel needed to be reconsidered. As outlined above, in this case a statement of intention had been enforced where there had been a non-compliance with the Statute ofFrauds. In a fused system dominated by the common law this had either to be explained as within common law principles, allowed to continue as an independent doctrine in its own right, or removed from the system of law altogether. In 1883 in Maddison v Alderson,48 Hammersley vDe Biel was read down as a contract case and the doctrine of part performance was invoked to qualify the acts of reliance upon oral promises which could give rise to an enforceable contract outside the Statute ofFrauds. Earlier cases which could not be reinterpreted into this 'new contractual framework' were overruled.49 The common law emerged as the victor, introducing into the fused substantive law the restrictions of a contract form of action which existed in the pre-Judicature system.

45 See also Bold v Hutchinson (1855) 20 Beav 250; Prole v Soady (1859) 2 Giff 1; 66 ER 1; Loffus v Maw (1862) 3 Giff 592; 66 ER 544; Williams v Williams (1868) 37 U Ch 854. 46 Dawson, "Making Representations Good" (1982) 1 Cant LR 329 at 342. 47 As above. 48 (1883) 8 App Cas 467. 49 For example, Loffus v Maw (1862) 3 Giff 592; 66 ER 544. (1991) 13 ADEL LR 235

Having colonised the jurisdiction to enforce representations within the law of contract, the common law judges then turned their attention to com~ensation for the failure to make representations good.50 In Derry v Peek51 the actionability at law of false representations was restricted to those which were made knowingly or without belief in their truth or carelessly without such a belief.52 The case established that where misrepresentation was not fraudulent, such that it would not satisfy the requirements of fraud form of action, compensation was no longer available.53 The effect of this decision was to restrict the actionability of representations to those which were made falsely, and to dispossess equity of its compensatory jurisdiction.54 In other words it introduced into a fused system of law a substantive restriction which had once existed only at law, not in equity. The procedural requirements of a fraud fonn of action were now entrenched within the post-Judicature system oflaw.

Although carrying a number of wounds, the equitable jurisdiction survived to give effect to representations of fact, through the medium of estoppel, until it received its final blow in Low v Bouverie.55 In this case the plaintiff acted on the negligent advice ofthe defendant and brought an action to make the defendant liable for the loss. The Court of Appeal held that following Derry v Peek there was no duty to take care between the plaintiff and the defendant with regard to negligent misstatements.56 However the Court distinguished between an action for negligent misstatement and estoppel.57 It said that Derry v Peek had no effect on cases of estoppel, but here there had not been a clear unambiguous representation which is the basis for an

50 Finn, "Equitable Estoppel" in Finn (ed), Essays in Equity (1985) 1'65. 51 (1889) 14 App Cas 337. 52 Derry v Peek came before a House of Lords which did not include a single Chancery Law Lord. 53 Atiyah describes this decision as the [mal triumph ofcommon law over equity. Atiyah, The Rise and Fall of Freedom of Contract (Oxford University Press, Oxford 1979) p672. 54 Finn, "Equitable Estoppel" in Finn (ed), Essays in Equity p65. Somewhat paradoxically the right to obtain recission for non-fraudulent representation survived. See Redgrave v Hurd (1881) 20 Ch D 1. The general right to rescind for innocent misrepresentation is the only part of the doctrine which survived the nineteenth century. 55 [1891] 3 Ch 82. 56 At 105, per Lindley U. 57 As above. 236 KIRK - CONFRONTING FORMS OF ACTION estoppel.58 However despite this, if estoppel were allowed to operate as a cause of action so that the representation could be directly enforced and the representation 'made good' or alternatively there be compensation, then the main force would have gone out of Derry v Peek.59 The effect of Low v Bouverie was to introduce into the substantive law the common law rule that estoppel is only a rule ofevidence. In the words of Bowen U,60

Estoppel is only a rule of evidence: you cannot found an action upon an estoppel. This was to say that it was not possible to have two conflicting causes of action in a fused system. To allow estoppel to operate as a cause of action would cause the paramountcy of fraud form of action, guaranteed by Derry v Peek, to be undermined. To allow a representation of itselfto form the basis of a cause of action in the absence of a recognised form of action, would be to allow equity to assume a role superior to that of the common law in the fused system. The common law judges would not tolerate this, so the limitation of estoppel to a rule of evidence was inevitable. Estoppel by representation was limited to the role it had within the common law system prior to the passage of the Judicature Acts. The common law had emerged victorious in the post-Judicature system ensuring that its form-based rules and doctrines became those of the fused substantive law. The equitable jurisdiction to 'make representations good' was thus buried. The acceptance into the fused system by the nineteenth century judges of the continued authority of the common law forms of action had vanquished equity's conceptions of both consideration and fraud. As a consequence, equity was denied its ability to enforce representations of intention in the absence of 'consideration' as understood by the common law.

58 Although two judges did indicate that they would have allowed the claim of the plaintiff if the facts had fallen within Burrowes v Lock. At 103, per Lindley U; at 113, per KayU. 59 In Burrowes v Lock, the representation was 'made good', on similar facts, that is the trustee was made accountable for any deficiency in the trust. Burrowes v Lock was not overruled by Low v Bouverie and in Nocton v Ashburton [1914] AC 932 Lord Haldane treated the jurisdiction as still alive. In this case relief was granted under another head of equity not overborne by Derry v Peek, namely fraudulent abuse of fiduciary obligation. 60 Low v Bouverie at 105. (1991) 13 ADEL LR 237 PROPRIETARY ESTOPPEL

The inroad into equity's jurisdiction to make representations good, effected by the Judicature Acts, did not go so far as to shorten the life of the jurisdiction which could require a landowner to give effect to another's expectation created or encouraged by him or her that the land belonged to or would be given to that other, and in reliance upon which that other had made outlays.61 In Ramsden v Dyson62 Lord Kingsdown made the often quoted observation that,

If a man, [sic] under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation, created or encouraged by the landlord, that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such a promise or expectation, with the knowledge of the landlord, and without objection by him , lays out money upon the land, a court ofequity will compel the landlord to give effect to such promise or expectation.

This 'statement of principle' is in manifestly the same tradition as Hammersley v De Biel.63 For this reason it is not surprising that it was subsequently attempted to explain it too away in contractual tenns.64 However this statement of principle was able to "evade contract's net".65 It seems that this estoppel was able to survive the Judicature Acts because it differed from the Burrowes v Lock line of cases in that the subject matter of the representations was the property of the representor.66 In Burrowes v Lock the subject matter of the representation was the property of a third party, the assignor, and therefore in providing a remedy it was difficult to

61 Finn, "Equitable Estoppel" in Finn (00), Essays in Equity p66. 62 (1866) LR 1 HL 129 at 170, emphasis added. 63 Finn, "Equitable Estoppel" in Finn (ed), Essays in Equity (1985) p66. 64 As above. See, for example, New South Wales Trotting Club Ltd v The Council ofthe Municipality 01 Glebe (1937) 37 SR (NSW) 288 at 308, per Jordan CJ. 65 Finn, "Equitable Estoppel" in Finn (ed) Essays in Equity p64. Finn goes on to argue that the reason for the survival of this limb of the doctrine was because the relevant 'fraud' was in the later assertion of rights by a landholder which falsifies the expectation upon which he or she knowingly permitted another to acL At p66. See, for example Dann v Spurrier (1802) 7 Yes 231; 32 ER 94. 66 This is the reason given in Meagher, Gummow and Lehane, Equity: Doctrines and Remedies (Butterworths, Sydney, 2nd ed 1984) p405. 238 KIRK - CONFRONTING FORMS OF ACTION tailor the remedy to the property itself, the only remedy being compensation. However, as has been shown, the availability ofequitable compensation was cut short by Derry v Peek. But in cases of proprietary estoppel, the remedy could readily be tailored to the property of the representor. This could be by way of a conveyance of the property to the representee or by the grant of a charge or lien over the land. The jurisdiction thus survived, and went on to fonn the basis of modern day proprietary estoppel.

Traditionally proprietary estoppel was divided into two lines of cases. The first, typified by Dillwyn v Llewelyn67 related to expenditure on the representor's property encouraged by some representation of benefit. This became known as estoppel by encouragement. The second line of cases related to expenditure with passive acquiescence by the representor. This became known as estoppel by acquiescence and Lord Kingsdown's summary of the principle in Ramsden v Dyson is usually cited as authority.

In Dillwyn v Llewelyn the plaintiff was placed by his father in possession of his land, the father signing an instrument intended to operate as a voluntary conveyance which was ineffective for that purpose. With the assent and approval of his father the plaintiff built and occupied a house on the land. The father died and the plaintiff obtained a declaration that he was the equitable owner of the land and a conveyance was ordered in his favour. The decision was subsequently applied in the post-Judicature system by the Privy Council in Plimmer v Wellington Corporation68 where the plaintiff acquired an irrevocable licence over the jetty he had built with the encouragement of the government that his occupation would not be disturbed.

In Olsson v Dyson,69 a case which involved the oral assignment as a gift to the plaintiff of a debt owed to the defendant, the High Court took no point that the doctrine was limited to proposed gifts of real rather than personal property.70 It seems therefore that the doctrine is not necessarily limited to dealings in land.

67 [1862] All ER Rep 384. 68 (1884) 9 App Cas 699. 69 (1969) 120 CLR 365. 70 As above, per Kitto J. In Norris v Perpetual Trustees & Agency Co (WA) Ltd (1942) 44 WALR 21 the doctrine was applied to a gift of the benefit of a life insurance policy. See also Western Fish Products v Penwith DC [1981] 2 All ER 204 at 218. The doctrine may also apply to goods. (1991) 13 ADEL LR 239

Proprietary estoppel emerged from the Judicature Acts unscathed. It therefore differs from the estoppel defined by the common law in fundamental ways. It may give the representee a permanent proprietary interest in the subject property which can be protected by a right of action.71 It retained its ability to be used as a sword as well as a shield. Furthermore, the representation may be of fact or intention and there is no requirement that the parties be in a pre-existing legal relationship.72 Proprietary estoppel evaded the restraints of the fonns of action reasoning which the common law judges invoked in the post-Judicature system to bury the wider jurisdiction to make representations good. Proprietary estoppel lived on in the spirit of the old equitable jurisdiction, to continue to give effect to representations of both fact and intention.

Until recently, the leading case was Willmott v Barber73 where Fry J laid down the five "probanda" that needed to be satisfied to make out proprietary estoppel fonn of action in the post-Judicature system. First, the person said to have been encouraged must have made a mistake as to his or her legal rights. Secondly, the person must have expended some money or done some act on the faith of this mistaken belief. Thirdly, the representor, the possessor of the legal right, must know of the existence of this right which is inconsistent with the right claimed by the other. Fourthly, the representor must be aware of the other party's mistake as to his or her legal rights. Finally, the representor must have encouraged the plaintiffs expenditure of money or acts, either directly or by abstaining from asserting his or her legal rights.74

Although the doctrine was successfully invoked in a number of nineteenth century cases, by the tum of the century the doctrine had become static as a result of the onerous limitations outlined in Willmott v Barber.75 It was not until recently that the doctrine was again invoked and successfully relied on in a number of cases.76 It was Lord Scarman's judgment in Crabb v Arun

71 Heydon, Gummow & Austin, Cases and Materials on Equity and Trusts (Butterworths, Sydney, 3rd ed 1989) p419. 72 As above. 73 (1880) LR Ch 96 at 105-106, perFry J. 74 Dawson, "Making Representations Good" (1982) 1 Cant LR 329 at 344. 75 In Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850 at 884 Lord Diplock clearly considered it essential that all five elements be proved to make out a case ofquasi estoppel by acquiescence. 76 Inwards v Baker [1965] 2 QB 29; Ward v Kirkland [1967] Ch 194; ER Ives Investments Ltd v High [1967] 2 QB 379. 240 KIRK - CONFRONTING FORMS OF ACTION

District Council77 that marked the attainment of the maturity of the doctrine in its modern fonn.78 In this case a property developer negotiated with a local council for a right of way over its land. With the council's knowledge he subdivided his property so that part of it would be landlocked if the right of way were not granted. When the council reneged on the agreement the developer sought a declaration as to his entitlement to access and an injunction restraining the council from interfering with his reasonable enjoyment of the right of way. He framed his case initially in contract but then subsequently amended his pleadings to raise the Ramsden v Dyson equity.79 The plaintiff succeeded in the Court of Appeal which held that the Council was estopped from denying the plaintiff his right of access and were ordered to grant the plaintiff the right of way. Although technically the case was argued within the Ramsden v Dyson principle it goes beyond the orthodox view of the doctrine in that it does not comply with the Willmott v Barber probanda. There was no mistake as to the parties respective rights. All that had occurred was that the plaintiff was encouraged to alter his position irrevocably to his detriment in the belief, which was known to and encouraged by the defendants, that he was going to be given a particular right of access. The 'fraud' arose after the event when the defendants sought by relying on their legal rights to defeat the expectation which was encouraged in the plaintiff.80

The final rejection of the formalism embodied in the Willmott v Barber probanda continued until the 'real test' was perceived as whether "it would be dishonest or unconscionable for ... the person having the right sought to be enforced, to continue to seek to enforce it."81 In Taylors Fashions v Liverpool Victoria Trustees Co Ltd82 Oliver J, commenting on the Willmott probanda, noted that he could discern from recent cases,

77 [1976] Ch 179. 78 Heydon, Gummow, Austin, Cases and Materials on Equity and Trusts p420. 79 The plaintiff could not succeed in contract as no contract was ever concluded and even if it had been there was no consideration provided by him, there was no evidence of writing and there were problems ofagency. 80 Dawson, "Making Representations Good" (1982) 1 Cant LR 329 at 347. See also Crabb v Arun DC [1976] Ch 179 at 195, per Scarman U. 81 Shaw v Applegate [1977] 1 WLR 970 at 978, per Buckley U. See also Taylors Fashions v Liverpool Victoria Trustees Co [1982] QB 133 at 152-154, per Oliver I, endorsed in Habib Bank Ltd v Habib Bank AG Zurich [1981] 1 WLR 1265; AmalgamatedInvestment & Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84. 82 [1982] QB 133 at 154, emphasis added. (1991) 13 ADEL LR 241

the broad test of whether in the circumstances the conduct complained of is unconscionable without the necessity of forcing those incumberances into a Procrustean bed constructed from some unalterable criteria.

The remedy to be provided where proprietary estoppel form of action is made out is the "minimum equity to do justice".83 The extent of the remedy granted has been seen to vary from case to case. In Dillwyn v Llewelyn the court ordered an outright transfer of the property to the plaintiff.84 In other cases the court has substantially fulfilled the expectation of the party,85 although the relief granted is sometimes of a lesser amount, for example the grant of an equitable charge over the property.86 The obvious advantage of the remedy in proprietary estoppel is that it can be moulded to the circumstances ofeach individual case.

In summary, it can be said that the doctrine of making representations good was significantly restricted as a result of the triumph of the common law after the passage of the Judicature Acts. It had been confined to the common law conception of estoppel which operated as a rule of evidence. Equity had been denied its jurisdiction which allowed an action to be brought on the representation itself. All that remained of the doctrine, which once flourished in equity, was a jurisdiction to give effect to representations of intention with respect to land and possibly other property. The reason for the survival of this subsidiary aspect of the jurisdiction was because the remedy for the failure to adhere to the representation made could easily be tied to the property of the representor. However the introduction into the fused system of law of the restrictions which existed in the pre-Judicature system at common law, had the effect of burying the old jurisdiction of making representations good which could give effect to representations where the subject matter in question was not only the property of the representor but also of a third party.

83 Crabb at 198, per Scannan U. 84 See also Pascoe v Turner [1979] 1WLR 431. 85 ER Ives Investments v High [1967] 2 QB 379; Jackson v Crosby (No 2) (1979) 21 SASR 281; Greasley v Cooke [1980] 1 WLR 1306; Riches v Hogben [1986] 1 Qd R 315; Re Basham (Dec'd) [1986] 1WLR 1498. 86 Morris v Morris [1982] 1 NSWLR 61. 242 KIRK - CONFRONTING FORMS OF ACTION PROMISSORY ESTOPPEL

Fortunately, there was another survivor from the restricting effect of the Judicature Acts on the development of these equitable principles. As has been outlined, the collision between law and equity effected by the Judicature Acts required the judges to reconcile the two streams of jurisdiction to ensure consistency and efficiency in the fused system. However the survival of equitable principles required the co-operation of the common law judges. This was not forthcoming, and the effect was, as has been shown, the destruction of the equitable jurisdiction to make representations good. However, in this period of reconciliation, some of the old equity judges continued to fight for the life of the jurisprudence they held so dear. Unfortunately the fight was to be short-lived.

In 1877, shortly after the passage of the Judicature Acts, Lord Cairns LC delivered a judgment which may now be considered as the only survivor, with the exception of proprietary estoppel, from the devastation of the nineteenth century on the doctrine of making representations good. The case was Hughes v Metropolitan Railway Co. 87 In this case a landlord gave his tenant notice requiring him to carry out repairs within six months. During that time they engaged in negotiations for the purchase of the premises. When negotiations broke down, the landlord claimed to forfeit the lease on the ground that the tenant had failed to repair. He obtained a judgment of ejectment, but the tenant moved to stay execution on equitable grounds. The motion failed at first instance, but succeeded in the Court of Appeal and the House of Lords. Lord Cairns LC, in a crucial passage of his judgment states,88

it is the frrst principle upon which all courts of equity proceed that if parties who have entered into definite and distinct terms involving legal results - certain penalties or legal forfeiture afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties.

87 (1877) 2 App Cas 439. 88 At 448, per Lord Cairns LC, emphases added. (1991) 13 ADEL LR 243

There is controversy as to exactly what this case decided.89 It may be an example of equity's jurisdiction to relieve against forfeiture or it may apply a rule of eQuitable fore-bearance to which estoppel is only weakly analagous.90 However at their widest, the observations of Lord Cairns appear to "contemplate with equanimity the enforcement of a representation of intention where it would be inequitable to allow the representor to resile".91 In other words, the decision may be interpreted as a survival of the old equitable jurisdiction.

The words of Lord Cairns were interpreted widely in Birmingham & District Land Co v London & North Western Rail Co.92 In this case Bowen LJ relied upon Lord Cairns's speech as authority for a principle of general application beyond the context of penalties and forfeiture.93 In his Honour's opinion the true principle was,

that if persons who have contractual rights against others induce by their conduct those against whom they have such rights to believe that such rights will either not be enforced or will be kept in abeyance for some particular time, those persons will not be allowed by a court of equity to enforce the rights until such time has elapsed, without at all events placing the parties in the same position as they were before.94

It was on the authority of these cases that Lord Denning found support to produce "one of his most controversial and durable creatures",95 'High Trees' or 'promissory' estoppel. The doctrine was frrst introduced by Lord Denning in Central London Property Trust Ltd v High Trees House Lttfl6. A block of flats had been let for a term of 99 years from September 1937 at 2500 pounds a year. With the advent of the war, the exodus of people from London resulted in the flats not being fully occupied. It was agreed that the rent should be reduced to 1250 pounds a year. In 1945 the flats were again fully let and the landlord claimed the higher rent for the last two quarters of 1945.

89 Heydon, Gummow, Austin, Cases and Materials on Equity and Trusts p406. 90 As above. 91 As above, fn89. 92 (1888) 40 Ch D 268. 93 At 286, per Bowen U. 94 As above, emphasis added. 95 Heydon, Gummow, Austin, Cases and Materials on Equity and Trusts p407. 96 [1947] KB 130. 244 KIRK - CONFRONTING FORMS OF ACTION

Lord Denning recognised that the landlord's statement involved a representation as to the future, namely that the payment of rent would not be enforced at the full rate but only at the reduced rate. His Honour recognised that such a statement would not give rise to an estoppel by representation, because as was said in Jorden v Money, a representation as to the future must be embodied in a contract or it will be unenforceable.97

However his Honour recognised that the law had not been standing still since Jorden v Money and that there had been a series of decisions on cases in which a promise was made which was intended to create legal relations and which, to the knowledge of the person making the promise, was going to be acted on by the person to whom it was made, and was in fact acted on.98 Jorden v Money could be distinguished because there the promisor made it clear that she did not intend to be bound.99 His Honour further referred to Hughes v Metropolitan Railway Co l00 and Birmingham & District Land Co v wndon & North Western Railway Col0l which his Honour said afforded sufficient basis for saying that a party would not be allowed in equity to go back on such a promise notwithstanding the absence of consideration.102 His Honour considered that it was the fusion of law and equity which led to this result as since fusion "principles must be reconsidered in light of their combined effect".103

The case initially received a cautious reaction from the English judiciary,104 but the Privy Council approved a formulation of the doctrine in Ajayi v Briscoe.l05 In Australia the case received support in Wilson v Kingsgate Mining lO6 and ultimately, approval in the strong dicta of Mason and Deane JJ in Legione v Hateley, t07

97 At 134. 98 As above. Fenner v Blake [1900] 1 QB 426; Re William Porter & Co [1937] 2 All ER 361. 99 High Trees at 134. 100 (1877) 2 App Cas 439 at 448. 101 (1888) 40 Ch D 268 at 286. 102 High Trees at 134-135. 103 As above. 104 For example, Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 2 All ER 657. 105 [1964] 3 All ER 556. 106 [1973] 2 NSWLR 713. See also Re Australian Continental Resources Ltd (1976) 10 AClR 19; Je Maintiendrai Pty Ltd v Quaglia (1981) 26 SASR 101. 107 (1983) 152 CLR 406 at 432-437, per Mason and Deane JJ. (1991) 13 ADEL LR 245

There is strong authority in equity for a limited doctrine of promissory estoppel - representations (or promises) as to future conduct restricted to precluding departure from a representation by a person in a pre-existing relationship that he [sic] will not enforce his contractual rights.

The decision in High Trees was recognised as giving birth to the doctrine of promissory estoppel. This was a 'new' estoppel because it was fundamentally different from the estoppel which had emerged as a culmination of the events of the nineteenth century. As has been shown, with the exception of proprietary estoppel, estoppel by representation had been confined to estoppel as understood at common law. Estoppel could only arise from representations of fact to fonn the basis upon which another cause of action could operate, that is, it was but a rule of evidence. However this 'new' estoppel could operate to give effect to representations of intention. Equity would not allow the representor to go back on the promise notwithstanding the absence of consideration. Equity was crying out from its grave.

This decision in High Trees was crucial in the process, now emerging in Australia, of a recognition of the limiting effects of fonns of action reasoning. Lord Denning refused to be tied down by the constraints imposed by Jorden v Money as it is itself simply an example of forms of action reasoning. Jorden v Money simply stands for the proposition that in a fonns of action system, representations of intention can only be given effect to within a recognised form of action, namely contract. Lord Denning recognises this, although not explicitly, in his willingness to overlook the apparent constraints of Jorden v Money. In Jorden v Money the House of Lords refused to take into account the developments occurring in equity. It is for this reason that Lord Denning points out that, given the fusion of law and equity effected by the Judicature Acts, there is no longer any excuse for ignoring this equitable jurisdiction. In a system which recognises the effects of fusion there is no need to satisfy the requirements of the forms of action to succeed. Therefore that which Jorden v Money stands for need no longer constrain the development of the substantive law. Recognising the potential effects of fusion, allows equity to emerge from the grave dug for it by the Judicature Acts, allowing it again to live and prosper within the substantive law.

However, Lord Denning did not directly address this issue of the forms of action and the Judicature Acts. Instead His Honour chose to distinguish Jorden v Money. However, the other ground of Jorden v Money, that representations as to future intention do not suffice at law or in equity to 246 KIRK - CONFRONTING FORMS OF ACTION establish an estoppel, "cannot be passed off as per incuriam or as dictum".108 As has been said, "The truth is that all proponents of the High Trees estoppel must face the issue that it flies in the face of Jorden v Money". 109 The decision in Jorden v Money thus remained as a constraint on the development of the doctrine ofpromissory estoppel.

Prior to the decision in Waltons Stores v Maher,110 despite the acceptance of the doctrine of promissory estoppel by the law, there was some doubt as to its extent and operation. First, did it require that there be a pre-existing legal relationship and if so must it be contractual? Secondly, was promissory estoppel limited to use as a shield and not as a sword, that is could it fonn the basis of a cause of action? Thirdly, was it necessary to show detriment before an estoppel could arise? Pre-existing Relationship

The position was far from clear on the question as to whether before an estoppel could arise the parties were required to be in a prior contractual, or at least legal, relationship. There were three possible alternatives; that promissory estoppel only operated in relation to pre-existing contractual rights, that it extended to any pre-existing legal relationship between the parties, or that it could be applied between parties to a course of negotiations which had not yet established a legal relationship between them.

There was some support for the argument that a legal relationship other than a contractual one will suffice. In Combe v Combe,111 it was suggested that the legal relationship of marriage may suffice. In Durham Fancy Goods Ltd v Michael Jackson (Fancy Goods) Ltd112 Donaldson J considered that a pre existing contractual relationship was not essential "providing there is a pre existing legal relationship which could in certain circumstances give rise to penalties and liabilities". It appeared therefore that the doctrine was limited to where there is a pre-existing legal relationship between the parties to the promise. in question, and the promise was made with respect to the promisor's rights arising under that relationship.

108 Heydon, Gummow, Austin, Cases and Materials on Equity and Trusts p402. 109 As above. 110(1988) 164 CLR 387. 111 [1951] 2 KB 215. 112 [1968] 2 QB 839 at 847. (1991) 13 ADEL LR 247

This raises the question as to why this restncnon was necessary. It is submitted that the question of pre-existing relationship is inextricably linked with the question of whether promissory estoppel could be a cause of action. Shield or Sword?

It was frequently said that promissory estoppel was a shield and not a sword, that is, that no action can ever be founded upon an estoppel. The expression 'a shield and not a sword' appears to have originated in the case of Combe v Combe.113 In this case Lord Denning asserted that promissory estoppel could not be the basis of an independent cause of action. 114 This restriction on promissory estoppel was subjected to much criticism.115 It was argued that if promissory estoppel is a principle of equitable intervention then it is perfectly consistent with this priciple to allow a promise acted upon to be directly enforced. 116 Despite this, it was clear that the law before Waltons Stores was that promissory estoppel could not found a cause of action.

Returning to the question as to why it was necessary to place these two restrictions on the doctrine of promissory estoppel, this is easily explained when the historical development of the law is properly understood. The effect of the Judicature Acts and the entrenchment of substantive restrictions in the law of estoppel, where once there were only procedural restrictions, meant that it was tied to the shackles of the forms of action and therefore not at liberty to develop. It was necessary to limit promissory estoppel to a shield because to allow it to operate as a sword would be to fly in the face of Low v Bouverie. Of course Low v Bouverie introduced into the substantive law the common law rule that estoppel was but a rule of evidence and could be used only to support a recognised form of action.

Secondly, to allow promissory estoppel to operate between parties not in a pre-existing relationship would be to deny the dominance of the forms, that is, to say that rights and obligations can arise between parties in a relationship not recognised by the forms of action. In a substantive law which continues to rely on the forms of action for its rules and doctrines, this

113 Jackson, "Estoppel as a Sword" (1965) 81 LQR 84 at 223. 114 Now see Deane J in Commonwealth v Verwayen (1990) 95 ALR 321 at 349ff. 115 Sheridan, "Equitable Estoppel Today" (1952) 15 MLR 325; Jackson, "Estoppel as a Sword" (1965) 81 LQR 84 at 223; Ducannon, "Equity and Obligations" (1976) Mod LR 268. 116 Morgan, "A Comparative Analysis of the Doctrine of Promissory Estoppel in Australia, Great Britain and the United States" (1985) 15 Melb Univ LR 134 at 147. 248 KIRK - CONFRONTING FORMS OF ACTION is not easily overcome. The events of the nineteenth century set in place the precedents which guaranteed that the fonns of action continued to play a vital role in the limits of the substantive law. Detriment

Did detriment need to be shown before an estoppel could be established? Lord Denning's view was that the alteration of position is sufficient and that a further requirement of detriment should not be imposed. 117 The opposite view insisted upon detriment suffered by the promisee in reliance on the promise.118 The issue was fully considered by the SA Supreme Court in Je Maintiendrai v Quaglia. 119 This was a landlord and tenant case in which the landlord promised to accept a reduced rental and the tenant relied upon the promise at least to the extent of not seeking alternative accomodation. The Court stated that promissory estoppel was part of the law in .Australia and that Ajayi v Briscoe correctly stated the law in that the defendant had incurred some kind of detriment in relying on the promise. The High Court, in Legione v Hateley endorsed the view that in Australia detriment is a requirement ofpromissory estoppel.

It was against this background of uncertainty that the case of Waltons Stores v Maher came to be decided by the High Court. The decision was to throw doubt upon all that has been so far outlined about the restrictions on the doctrine of estoppel. The judges of the High Court were unwilling to allow the fonns of action to stand in the path of securing a just and fair result for the Mahers, despite the weight of authority which suggested a contrary result. WALTONS STORES v MAHER

The Mahers owned commercial premises at Nowra in New South Wales. After negotiations with Waltons Stores, it was agreed that the existing building be demolished and replaced with a new building which was to be leased by Waltons. Solicitors for the parties drew up documents to effect the transaction. The Mahers' solicitor informed Waltons' solicitor that the

117 Denning, "Recent Developments in the Doctrine ofConsideration" (1952) 15 MLR 1 at 5; Ajayi v Briscoe [1964] 1 WLR 1326 at 1330; WI Allan's Co Ltd \1 EI Nasar & Import Co [1972] 2 All ER 127 at 140. 118 See Grundt v Great Boulder Gold Mines Ltd (1938) 39 CLR 641 at 674-675, per Dixon J. 119 (1981) 26 SASR 101. (1991) 13 ADEL LR 249 agreement must be concluded "within the next day or so" otherwise it would be impossible for the Mooers to complete it. There was much urgency in finalising the agreement. In response, Waltons' solicitor sent new documents incorporating amendments stating that he believed that approval from Waltons would be forthcoming, and that he would let the Mahers' solicitor know if any amendments were not agreed to. Some days later the Mooers' solicitors, having heard nothing about the amendments, submitted executed documents "by way of exchange".120 Their covering letter was not acknowledged for nearly two months as Waltons was privately reconsidering its position in light of advice that the lease of the premises might not suit its retailing strategy in rural centres. A later letter indicated that Waltons was not proceeding with the transaction. At no stage had a contract been concluded between the parties, as Waltons had never executed the original deed. Meanwhile the Mahers, to the knowledge of Waltons, had caused the old building to be demolished and new construction was well advanced. The Mahers commenced proceedings in the Supreme Court of New South Wales for a declaration that there was in existence a valid and enforceable agreement for a lease, an order for specific performance, and alternatively damages in lieu thereof.

Kearney J in the Supreme Court of NSW121 awarded damages in lieu of specific performance, holding that Waltons was estopped from denying that a concluded contract by way of exchange existed. lITThe Court of Appeal dismissed the appeal of Waltons,123 but considered the estoppel to relate not to a representation that a contract existed, but to an omission to correct the respondents' mistaken belief that there had been an exchange of documents or that there was a binding contract. Therefore Waltons was estopped from denying the existence of a binding contract. 124 In a unanimous decision the High Court dismissed the appeal of Waltons Stores and held that it was estopped in the circumstances from retreating from its implied promise to complete the contract.

120 This is a conveyancing procedure in NSW. Once there has been an 'exchange' of contracts it means that both parties are in a position to enforce the contract. 121 Maher v Waltons Stores (Interstate) Ltd (1984) 1BeL 187. 122 That is common law estoppel by representation. 123 Waltons Stores (Interstate) Ltd v Maher (1986) 5 NSWLR 407. 124 That is common law estoppel based on omission. 250 KIRK - CONFRONTING FORMS OF ACTION

Mason CJ and Wilson J

Mason CJ and Wilson J considered that the assumption by the Mahers was not that a contract had come into existence but that the signing and exchange of the contracts were a mere formality, and therefore they had an expectation as to future rather than existing state of affairs. 125 This excluded the possibility of a common law estoppel by representation, as their Honours were not prepared to undermine the longheld view since Jorden v Money that estoppel by representation required the representation to be one of existing fact. 126Instead they sought to outflank Jorden v Money by invoking the doctrine of promissory estoppel. 127 Promissory estoppel was recognised as extending to representations (or promises) as to future conduct.128 However, unlike Legione v Hateley the parties were not in any pre-existing contractual relationship. Despite this, their Honours thought that there was no reason in principle why the doctrine should not apply so as to preclude departure from a representation in respect of a non-contractual right.129

Their Honours referred to the reluctance of courts to invoke promissory estoppel to positively enforce a representation, that is, to confine it to use as a shield and not as a sword.130 They stated that the principal objection to enforcement of a non-contractual promise in the absence of a pre-existing relationship was that it would outflank the principles of the law of contract. l31 Their Honours considered that although there was force in these

125 (1988) 164 CLR 387 at 398. 126 As above, citing Maddison v Alderson (1883) 8 App Cas 467; Chadwick v Manning [1896] AC 231. In Foran v Wight (1989) 88 ALR 413 at 430, Mason CJ indicates that it should now be recognised that a common law estoppel as well as an equitable estoppel may arise out of a representation or mistaken assumption as to future conduct. His Honour said that to do so would be to give greater unity and consistency to the general doctrine of estoppel: See also Deane J at 448. Now Commonwealth v Verwayen (1990) 95 ALR 321 at 331 indicates that "neither the decision nor the reasoning in [Jorden v Money] can now be sustained". 127 Waltons Stores v Maher at 399. Their Honours saw reversing Jorden v Money as a "formidable exercise" and as there had not been any argument on this their Honours refused to do so. 128 At 389, citing Legione v Hateley (1983) 152 CLR 406. 129 At 389, citing Durham Fancy Goods Ltd v Michael Jackson Fancy Goods Ltd [1968] 2 QB 839. 130 At 400. 131 As above. In Foran v Wight (1990) 88 ALR 413 at 431 Mason CJ states that in Waltons Stores the recognition of promissory estoppel and its ability to give effect to (1991) 13 ADEL LR 251 arguments, equity comes to nntIgate the rigours of strict law, and accordingly there was no logical justification for refusing to enforce a non contractual promise in the absence of a pre-existing relationship. 132

Their Honours referred to the position in the United States where promises are directly enforced in the absence of consideration, however they considered that this approach should be treated with caution. 133 Pointing out that in the United States promissory estoppel was developed partly in response to the limiting effects of the bargain theory of consideration, their Honours said this approach had never been expressly adopted in Australia or England,134 and in Australia courts may be willin2 to imply consideration in situations where the bargain theory would deny it~35 However they went on to say that in the United States, as in Australia, there is an obvious inter relationship between the doctrines of consideration and promissory estoppel with "promissory estoppel tending to occupy ground left vacant due to the constraints affecting consideration." 136

Their Honours continued, stating that our promissory estoppel, "with its origins in the equitable concept of unconscionable conduct", was not unlike estoppels referred to in English cases. 137 In Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd,138 the Court of Appeal treated proprietary estoppel (estoppel by acquiescence) and promissory estoppel as "mere facets of the same general principle".139 Their Honours considered that what gives rise to the need for court intervention is the defendant's unconscionable attempt to go back on the assumptions which were the foundation of the dealing.140

representations as to future conduct shows that "the dam wall has fractured at its most crucial point". Now see Commonwealth v Verwayen (1990) 95 ALR 321 at 331. 132 At 401, citing Crabb v Arun District Council [1976] Ch 179 at 187, per Lord Denning MR. 133 At 401- 402. 134 At 402. 135 As above. 136 As above, fnl3. 137 At 402-403, citing Amalgamated Property Co v Texas Bank [1982] QB 84 and Pacol Ltd v Trade Lines Ltd [1982] 1Lloyd's Rep 456. 138 [1982] QB 133 at 153. 139 Waltons Stores v Maher at 403. 140 At 403-404. 252 KIRK - CONFRONTING FORMS OF ACTION

Their Honours saw a "common thread" which linked these cases together, namely that "equity will come to the relief of a plaintiff who has acted to his detriment on the basis of a basic assumption in relation to which the other party to the transaction has played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it".141 "Equity comes to the relief of such a plaintiff on the footing that it would be unconscionable conduct on the part of the other party to ignore the assumption". 142

Next, their Honours turned their attention to the question of voluntary promises. They said that until now equity had "set its face" a~ainst the enforcement of promises and future representations as such.T43 Their Honours rejected the objection in Maddison v Alderson that promissory estoppel outflanks the doctrine of part perfonnance saying that equitable estoppel depends on different considerations from part performance. 1M

Their Honours referred to the recent English case ofAttorney General (Hong Kong) v Humphrey's Estate145 which was not unlike the present case in that it arose in the course of negotiations antecedent to the making of a contract. Their Honours went on to say that the doctrine of promissory estoppel extends to the enforcement of voluntary promises on the footing that a departure from the basic assumptions underlying the transaction between the parties must be unconscionable. 146 A failure to fulfil a promise does not of itself amount to unconscionable conduct, mere reliance on an executory promise to do something, resulting in the promisee changing his position or suffering detriment does not bring promissory estoppel into play, "something more would be required". 147

Their Honours did not state what this "something more" may be, except that, as Humphrey's Estate suggests, it may be found in the creation or encouragement by the party estopped of an assumption in the other that a contract will come into existence, or that a promise will be performed, and

141 At 404, citing Dixon J in Grundt v Great Boulder Pty Gold Mines Ltd (1938) 59 CLR 641 at 675. 142 At 404. 143 At 404. 144 At 405. 145 [1987] 1AC 114. 146 Waltons Stores vMaher at 406. 147 At 406. (1991) 13 ADEL LR 253 reliance on that assumption by the other party to his or her detriment, to the other party's knowledge.148

Applying this to the facts of the case, their Honours saw the crucial question as being whether Waltons was entitled to "stand by in silence when it must have known that the Mahers were proceeding on the assumption that they had an a~eement and that the completion of the exchange was a mere fonnality".149 Their Honours considered that the urgency of the matter and the fact the executed counterpart deed had been forwarded to Waltons' solicitor was sufficient to put Waltons under an "obligation to communicate" with Maher within a reasonable time of receiving it and certainly upon learning of the demolition. 150 The inaction of Waltons constituted "clear encouragement or inducement" to the Mahers to continue to "act on the basis of the assumption they had made".151 Waltons behavior was therefore unconscionable and they were estopped from retreating from the implied promise to complete the contract. 152 Their Honours dismissed the appeal. 153

Brennan J

As the factual basis of his decision, Brennan J also treated the assumption upon which Maher acted as being that the exchange of contracts would take place. His Honour held therefore that there was no estoppel by conduct (in pais) as defined by the common law, because it does not extend to compel adherence to representations of future intentions. 154 His Honour also agreed with Mason CJ and Wilson J in holding that the facts did however warrant a finding of equitable estoppel. His Honour considered that promissory estoppel was merely one type ofequitable estoppel. 155

148 At 406 149 At 406-407. 150 At 407. 151 As above. 152 At 407-408. 153 They noted that as the other judgments demonstrate, there was no substance in the argument based on section 54A of the Conveyancing Act 1919 (NSW). 154 At 415. Estoppel in pais includes both common law estoppel and estoppel by representation: Legione v Hateley (1983) 152 CLR 406 at 430, per Mason and Deane JJ. However as has been shown, estoppel by representation was limited to its common law basis as a result ofthe events of the nineteenth century. 155 At 421 and 426. 254 KIRK - CONFRONTING FORMS OF ACTION

Before addressing the question of equitable estoppel, his Honour examined the nature of estoppel in pais. His Honour thought that the effect of an estoppel in pais is not to create a right in one party against the other, rather it is to establish the state of affairs by reference to which the legal relationship between them is ascertained.156 However on the facts, estoppel in pais did not apply as it does not "compel adherence to representations of intention".157 Discussing the limited nature of estoppel in pais as a rule of evidence, his Honour thought that this was true except to the extent that the estoppel compels the party bound to adhere to the assumption that the contract exists.158 It is the contract between the parties which confers the cause of action on the party raising the estoppel, the source of legal obligation is the contract not the representation which gives rise to the estoppel.159

In contrast, equitable estoppel is a source of legal obligation arising out of an actual state of affairs. l60 His Honour thought that an equitable estoppel is more accurately described as an equity created by estoppel. 161 Equitable estoppel with its origins in the "~eneral principles of equity" binds the conscience of the party estopped.16T

His Honour considered there were three bases upon which an estoppel could arise; an assumption that Waltons would exchange, that exchange had occurred, and that there was an existing agreement. Turning to the frrst basis that Waltons would exchange, his Honour stated that as this was a representation as to a future state of affairs·it required an analysis of equitable estoppel. His Honour was of the view that an "equity created by estoppel" or "~uitable estoppel" protects so that "an injustice may not be perpetrated".163 His Honour recognised that this principle goes back to

156 At 387 and 414. 157 At 415, citing Jorden v Money. 158 At 415, citing Laws Holdings Ply Ltd v Short (1972) 46 AUR 563. 159 At 415. This is to restate the common law position on estoppel which was subsequently introduced into the fused substantive law after the passage of the Judicature Acts. 160 At 416. 161 At416. 162 At 416. It seems that Brennan J considers equitable estoppel to be not unlike the old doctrine of making representations good. 163 At418. (1991) 13 ADEL LR 255

Ramsden v Dy.son and Plimmer v Mayor ofWellington. 164 His Honour went on to say that,165

the element which both attracts the jurisdiction of a court of equity and shapes the remedy to be given is the unconscionable conduct on the part of the person bound by the equity, and the remedy required to satisfy an equity varies according to the circumstances of the case.

His Honour thought it "both impossible and unnecessary" to define unconscionable conduct. l66 However, some indication of what constitutes unconscionable conduct could be seen from the cases in which an equity created by estoppel has been found. 167 His Honour considered that cases of equitable estoppel were in truth simply particular instances of the operation of the general principles of equity. For this reason he found it unhelpful to divide equitable estoppel into classes.168 In all cases of equitable estoppel, the party raising the equity has acted or abstained from acting on an assumption or expectation as to the legal relationship between himself and the party who induced him to adopt the assumption or expectation. 169 This assumption may be one of fact or law. 170

The promise which induces the assumption or expectation must be intended to affect legal relations. 171 Referring to Denning LJ's enunciation of equitable estoppel in Combe v Combe,172 his Honour stated that this, although it emphasises the need for legal relations to be affected, does not bring out the basic object of equitable estoppel which, like estoppel in pais, is to avoid the detriment which the promisee would suffer if the promisor fails to fulfill the promise. 173

164 At 418, citing Dillwyn v Llewelyn [1861-73] All ER 384; ER Ives Investment Ltd v High [1967] 2 QB 379 at 400; per Dwerts U; Olsson v Dyson (1969) 120 CLR 365. 165 At419. 166 At419. 167 At 420. 168 At 420. 169 At 420. 170 At 420-421. 171 At421. 172 [1951] 2 KB 215 at 220. 173 Waltons Stores vMaher at 421. 256 KIRK - CONFRONTING FORMS OF ACTION

Referring to the situation where parties are negotiating a contract, his Honour stated that so long as both parties recognise that they are free to withdraw at any time before the contract is made, it cannot be unconscionable for them to do so.174 However if one party "induces the other to believe that the other is already bound it would be unconscionable for him to subsequently assert that he is legally free to withdraw".175

His Honour considered it essential for the purposes of equitable estoppel that the party who induces the assumption or expectation "knows or intends that the party who adopts it will act or abstain from acting in reliance of the assumption or expectation".176 It is then the failure of the party who induced the assumption or expectation to fulfil it or otherwise avoid the detriment which results which is the unconscionable conduct. 177 The object of the equity is to avoid the detriment, not to compel the party to fulfil the promise. 178

His Honour considered that it is in this way that equitable estoppel avoids making non-contractual promises enforceable as contractual promises. 179 Non-contractual promises are only enforced to the extent that it is necessary to avoid the detriment which arises due to the non-fulfilment of the induced assumption or expectation. In this case, equitable estoppel almost "wears the appearance of contractU.180 However a contract differs from an equity created by estoppel. 181 A contract is created by agreement, whereas an equity created by estoppel may be imposed. 182 A contract must be supported by consideration whereas an equity need not be supported by consideration in the strict sense. 183 The measure of contractual obligation depends on the terms of the contract whereas the measure of an equity will vary according to what is necessary to avoid the detriment resulting from unconscionable conduct. 184

174 At 423. 175 At 423. 176 At 423, referring to Lord Denning MR in Crabb v Arun DC [1976] Ch 179 at 188. 177 At 423. 178 At 423. 179 At 423. 180 At 424, referring to Lord Westbury in Dillwyn v Llewelyn (1862) 4 De GF & J 517 at 521; 45 ER 1285 at 1286. 181 At 425. 182 At 425. 183 At 425. 184 At 425. (1991) 13 ADEL LR 257

Turning to the shield versus sword question, Brennan J thought that there was a "logical difficulty" with limiting equitable estoppel so that it affected only existing rights.18S-Furthermore, his Honour said that it was illogical to allow proprietary estoppel to form a cause of action and yet limit promissory estoppel to a defensive role. As both estoppels have at their basis the avoidance of detriment occasioned by unconscionable conduct, they should have the same operation.186 His Honour stated that once equitable estoppel is seen as enforcing promises only to the extent necessary to avoid detriment, the doctrine of consideration remains, and non-contractual promises will not be elevated to the status ofcontractual promises. 187

His- Honour next considered whether silence is capable of giving rise to an equity created by estoppel. He concluded that this would only be the case where it would be inequitable to assert a legal relationship different from the one which to the knowledge of the silent party, the other party assumed or expected. 188

Finally Brennan J listed the six elements which he considered necessary to establish an equitable estoppel. 189 First, that the plaintiff assumed or expected that a particular legal relationship exists or will exist between him and the defendant and that the defendant is not free to withdraw from the expected relationship. Secondly, that the defendant has induced the plaintiff to adopt this expectation or assumption. Thirdly, that the plaintiff acts or abstains from acting in reliance on the assumption or expectation. Fourthly that the defendant knew or intended him to do so. Fifthly, that the plaintiffs action or inaction will occasion detriment if the expectation is not fulfilled. Finally, that the defendant failed to act to avoid that detriment.

Turning to the facts of the case, Brennan J considered that the retention of the counterpart deed by Waltons was tantamount to a promise that it would complete the exchange.190 Furthermore, Waltons' silence induced Maher to assume that Waltons was bound and not free to withdraw. It was thus

185 At 425, referring to Denning U in Combe v Combe [1951] KB 215 who limited promissory estoppel to a "defensive equity". See now the approach of Deane and Dawson JJ in Commonwealth v Verwayen (1990) 95 ALR 321 at 349ff and 367ff. 186 At 426. 187 At 426-427. 188 At 427-428, citing Ramsden v Dyson (1866) LR 1HL 129; Willmott v Barber (1880) 15 LRCh96. 189 At 428-429. 190 At 429. 258 KIRK - CONFRONTING FORMS OF ACTION unconscionable for Waltons to withdraw leaving the Mahers to bear the detriment. An equity was raised against Waltons, which was satisfied by treating Waltons as though it had done what it had induced Maher to expect it would do, that is execute the contract. The detriment could be avoided by awarding damages in lieu of specific perfonnance.191

Although this was sufficient to dispose of the appeal, another possible basis of liability was an assumption that exchange had occurred, that is the basis of an estoppel in pais. Brennan J thought this was not made out on the facts. 192 The third basis of liability was where an agreement was thought to be existing. Brennan J thought it doubtful whether the evidence supported this. 193

Waltons sought to rely on section 54A of the Conveyancing Act (1919) NSW which requires a contract to be in writing. However Brennan J said that equitable estoppel does not create a contract to which s54A might apply and therefore it had no application. 194 The action to enforce the equity is not brought "upon any contract" for the equity arises out of the circumstances.195 The appeal was dismissed. DeaneJ

Deane J supported the finding of Kearney J and the Court of Appeal that Maher thought that a contract existed between the parties. 196 He considered that the facts sufficed to found an estoppel precluding Waltons from denying the existence of a binding agreement for a lease. The estoppel was an emanation of estoppel by conduct (in pais), the principle which precludes departure from a representation or an induced assumption of existing fact in circumstances where the party estopped has knowingly and silently stood by and watched the other party act to his or her detriment. 197

Addressing the notion that estoppel can be used only as a shield and not as a sword, Deane J stated that as far as estoppel by conduct was concerned, this

191 At 430. 192 At 430-431. This was because Maher's solicitor knew that there had been no exchange. 193 At 431-432. 194 At 433. 195 As above. 196 At 443. That is the assumption was of existing fact. 197 At 443, citing Thompson v Palmer (1933) 49 CLR 507 at 547; Grundt v Great Boulder Ply Gold Mines Ltd (1938) 59 CLR 641 at 676 (1991) 13 ADEL LR 259 is only true in the sense that such an estoppel "operates negatively to preclude the denial of, or a departure from, the assumed or promised state of affairs and does not of itself constitute an independent cause of action". 198 But his Honour did not consider that there was a reason to constrict the doctrine "in a way which would preclude a plaintiff from relying upon the assumed or represented mistaken state of affairs ... as the factual foundation of a cause of action arising under ordinary principles of law".199 His Honour, like the other judges, thought that s54A had no application as the estoppel outflanks its provisions.200

Although this was sufficient to dispose of the appeal, his Honour went on to consider what his view would have been had the evidence been different.201 His Honour stated he would have also dismissed the appeal had the evidence established that Waltons by its conduct led the Mahers to assume mistakenly that the exchange of contracts was a mere formality, and Waltons knowing that assumption had become false remained silent when it became aware that the Mahers were acting to their detriment.202

His Honour then embarked upon an explanation of the history of estoppel by conduct.203 He highlighted the fact that pre-Judicature cases indicate that the separation of law and equity had a substantive effect in the operation of the doctrine of estoppel in relation to promises and expectations as to future conduct.204 However, apart from this, there was a general consistency both in content and rationale between common law and equitable principles of estoppel by conduct.205 However, upon fusion of the common law and equity under the Judicature Acts, there was no point in maintaining

198 At 445. It seems from this statement that Deane J was not prepared to recognise that estoppel by conduct could be a sword. This comes out clearly in his judgment in Commonwealth v Verwayen (1990) 95 ALR 321 at 349ff. 199 At 445. It seems that Deane J accepts the common law position and as his judgment in Commonwealth v Verwayen (1990) 95 ALR 321 at 349ff indicates that he has now introduced this into the 'fused' system. 200 At 445-446. 201 At446. 202 At 446. 203 At 446-448, citing NSW v Rutile Mining Co Pty Ltd v Eagle Metal & Industrial Products Ply Ltd [1960] SR (NSW) 495, a pre-Judicature system case from New South Wales. 204 At 447. 205 At 447. "This unity of the doctrine of estoppel by conduct at law and in equity has been consistently assumed by this Court". 260 KIRK - CONFRONTING FORMS OF ACTION independent equitable and common law doctrines under a fused system.206 Despite this, the situation was seen as different in relation to representations as to future conduct. Estoppel by conduct was "routed at law" by the doctrine of consideration however it continued to wage a "sporadic battle in equity" under the nomenclature of an equity.207 It was from these "persisting heads of ~uity" that the modern doctrine of promissory estoppel developed.20 This in turn led to a perception that promissory estoppel is an exclusively equitable doctrine which has resulted in a dichotomy between common law and equity in a field which did not exist even before the Judicature Acts system. His Honour considered this to be a mistake.209 In a fused system where equitable and legal remedies are all generally available there is no reason for promissory estoppel to be seen as exclusively equitable.210

His Honour continued, stating that once it is accepted that the doctrine of estoppel by conduct is one of substantive law the question of what is precluded from the operation of estoppel can then be seen as a matter of substance and common sense.211 Once this is recognised, an assumption or representation about future conduct will be as effective to preclude unconscionable conduct as one ofexisting fact. 212

On this approach, His Honour considered that Legione v Hateley213 must be seen as establishing that earlier decisions to the effect that estoppel by conduct could not extend to representations or assumptions of future fact, that is, Jorden v Money and the cases following it, are no longer good law in Australia.214 His Honour considered taking the step taken by Lord Denning in Moorgate Ltd v Twitchings215 in concluding that estoppel by conduct should be generally extended "to include an assumption of fact or law, present or future", however he decided that the development of the law

206 At 448. 207 At 448, citing Hughes v Metropolitan Railway Co (1877) 2 App Cas 439. 208 At 448. 209 As above. 210 At 449. 211 At 449-450. 212 At 450. 213 (1983) 152 CLR 406. 214 Waltons Stores v Maher at 452, including Chadwick v Manning [1896] AC 231. 215 [1976] QB 225 at 242. (1991) 13 ADEL LR 261 should proceed on a more cautious basis.216 In identifying the categories of representations of future fact to which the doctrine extends, his Honour thought it necessary to be conscious of the currently entrenched importance of the doctrine of consideration.217 However, His Honour considered that the extension of the doctrine to these categories of case would in many instances strengthen the doctrine of consideration by overcoming its unlust operation in "special circumstances with which it is inadequate to deal".2 8

The final matter addressed by Deane J was the notion that estoppel by conduct operates so as to avoid injustice which would result from the operation ofother laws.219 His Honour pointed out that where liability arises under an "other law", for example negligence, there is little point in invoking the doctrine of estoppel so as to fmd liability on assumed facts when the actual facts give rise to a duty of care in negligence.220 In his opinion, the Mahers had a good cause of action in negligence against Waltons, although this was not argued.221 According to Deane J the development of the common law should be as a

coherent body ofprinciples which can be applied to ascertained facts to produce a legal definition ofrights and liabilities and not as a miscellany of overlapping, competing and sometimes inconsistent sets of laws from which a £laintiff may selectively choose to the detriment of a defendant.2 2

His Honour dismissed the appeal. GaudronJ

Gaudron J drew a distinction between common law estoppel which she saw as operating by reference to an assumption of fact and eQuitable estoppel which operated by reference to an assumption as to rights~23 Her Honour

216 Waltons Stores v Maher at 452. In Foran v Wight (1989) 88 ALR 413 at 448 Deane J indicated that he was now willing to take this step. See also Commonwealth v Verwayen (1990) 95 ALR 321 at 356. 217 At 452. 218 At 453. 219 At 453. 220 At 453. 221 At 454. 222 At 455, emphasis added. 223 At 458. 262 KIRK - CONFRONTING FORMS OF ACTION said that the assumption that contracts would be exchanged was an assumption as to future rights which may provide the basis of an equitable estoppel, however it could not form the basis of an common law estoppel due to Jorden v Money.224 Her Honour considered that whether an assumption as to a future contractual right will found an equitable estoppel may depend on whether proprietary estoppel and promissory estoppel are discrete categories of equitable estoppel or merely illustrative of different assumptions as to rights.225 Her Honour agreed with the view of Scarman U in Crabb226 who supported the latter approach.

Her Honour chose to base her judgment however, on the ground that there had been an assumption of fact, that is that the exchange had taken place.227 Although she was not prepared to find that Waltons knew of the Maher's mistaken belief that contracts had been exchanged,228 she was prepared to find an estoppel on the ground that knowledge by the Waltons of the demolition work should have made them aware of Maher's reasonable expectation that exchange would take place, and thereupon Waltons came under a duty to inform Maher that the situation had materially changed.229 The lack of prudence on Waltons part was considered a proximate cause of Maher adopting the assumption and for this reason Waltons was estopped from denying the truth of the assumption.230 Her Honour dismissed the appeal.

CONFRONTING THE FORMS OF ACTION

The decision in Waltons Stores v Maher gave new life to the doctrine of estoppel. The devastation of the nineteenth century had limited it to a rule of evidenc~. A representation could only found an estoppel where it was one of fact, and it could only be used for the purposes of establishing another form of action.231 The interpretation of the Judicature Acts by the common law

224 At 459. 225 At 459-460. 226 [1976] Ch 179 at 192-193. 227 Waltons Stores v Maher at 460. 228 At 462. 229 At 462. 230 At 462-464. 231 Except of course for the doctrine of proprietary estoppel which survived this 'devastation', and the doctrine emanating from Hughes v Metropolitan Railway Co (1877) 2 App Cas 439 and Birmingham & District Land Co v London & North Western Rail Co (1888) 40 Ch D 268. (1991) 13 ADEL LR 263 judges in the nineteenth century had guaranteed the continued role of the common law forms of action in the fused system at the expense of the equitable doctrine of making representations good which had flourished in the pre-Judicature system, giving effect to representations or providing compensation in lieu thereof.

However in Waltons Stores, by expanding the doctrine of promissory estoppel as developed by Lord Denning in High Trees, the High Court gave equity a new lease of life, resurrecting it from the grave dug for it by the Judicature Acts. The remainder of this article will explore the implications of recognising that promissory estoppel can be a sword as well as a shield, so as to give effect to or compensation for representations of intention reasonably and detrimentally relied upon in the absence of consideration. It will question why it was necessary to create a 'new' form of action to provide relief for the Mahers in the circumstances of the case, and to what extent the decision challenges the continued authority of the nineteenth century precedents which guaranteed the continued role of the forms in the post Judicature system. Finally, it will be considered how far the decision goes in revitalising the old doctrine of making representations good and therefore in resurrecting the dichotomy which faced the nineteenth century judges at the time of the passage of the Judicature Acts.

As outlined above, before Waltons Stores promissory estoppel was limited in two inter-related ways. First, it operated only where the parties were in a pre-existing contractual (or legal) relationship, and second, it was seen as operating only defensively, in that it was not recognised as giving rise to a cause of action. The decision in Waltons Stores had the effect of removing these two restrictions. It was held that promissory estoppel can arise in the absence of a pre-existing legal relationship, and give rise to a cause of action on the representation itself. It was recognised as a source of legal obligation which gave the right to a remedy where its elements could be satisfied.

By recognising that promissory estoppel can be a cause of action, the High Court introduced another 'head' of liability into the law, a new form of action. Traditionally, it has always been the law of contract and tort, as derived from Assumpsit and Case, which have regulated relations between parties where representations are made and subsequently relied on occasioning damage. However, giving promissory estoppel the ability to be used as a sword, to give rise to obligations, creates the possibility of rights and duties arising in relationships which are presently unregulated by the law simply because they do not fall within the scope of a recognised form of action. 264 KIRK - CONFRONTING FORMS OF ACTION

The crucial question which arises from Waltons Stores is why was it necessary for the High Court to create a 'new' form of action to provide relief for the Mahers? It is the argument of this article that Waltons Stores is a fundamentally significant decision for the legal system because it exposes the fallacy behind the abolition of the fonns of action effected by the Judicature Acts. It was necessary for the justices of the High Court to create a new form of action in promissory estoppel because their Honours are trapped within a legal system which is inherently form-bound, to the extent that the substantive law cannot be stated independently of th.e forms of action. As Maine observed in the nineteenth century, the substantive law is "secreted in the interstices ofprocedure".232

Despite the abolition of the fonns of action effected by the Judicature Acts of the nineteenth century, the fonns of action continue to dominate the way the law is conceived. Although in practice the. fonns of action have been abolished, in reality the law still maintains the idea of the forms in the way it classifies its 'causes of action'. As Pollock observed,233

The forms of action ... were only the marks and appointed trappings of causes of action; and to maintain an action there must still be some cause of action known to the law ... The question, therefore, whether any cause of action is raised by given facts is as important as it ever was.

The substance of a claim must fall within a recognised cause of action before a remedy can be provided. Where there is no 'right' there is still no remedy.

As has been shown, the interpretation of the Judicature Acts was to entrench the fonns of action into the system of law as substantive restrictions. In the pre-Judicature system, 'not in this form of action' did not necessarily mean that the law did not recognise the plaintiffs claim under another form, as the restrictions were purely procedural. However in the post-Judicature system 'not in this form of action' came to mean 'no substantive law', that is no rights and duties. If the claim could not be made out in the appropriate form it would fail. Consider for example Derry v Peek.234 This case introduced into the substantive law the proposition that in the absence offraud an action on a representation cannot be sustained, that is unless the requirements of a fraud fonn of action at common law can be satisfied there will be no

232 Maine, Early Law and Custom p389. 233 Pollock, Law ofTorts (Stevens & Sons, London, 12th ed 1923) p540, emphasis added., 234 (1889) 14 App Cas 337. (1991) 13 ADEL LR 265 remedy. As Lord Herschell pointed out "to support an action of deceit fraud must be proved and nothing less than fraud will do".235

It was thus accepted that fraud was a pre-requisite for an action on a representation, and that if falsity could not be shown then the action would fail. Of course, as outlined above the decision completely ignored the jurisdiction in equity which did not require proof of actual dishonesty. Simply because an action could not be established at law did not mean that an action could not have been sustained in equity. But this would be to deny the place of the common law in the fused system. Subsequent interpretations of Derry v Peek were to entrench the common law position into the fused law, thereby imposing a substantive restriction where once the restriction was purely jurisdictional.

A similar step was taken in the introduction into the fused system of the fonns of action reasoning in Jorden v Money.236 This established that in a fused system, representations of intention can only be given effect to if contained in a contract. Of course this ignored the doctrine of making representations good which had flourished in equity in the pre-Judicature system, and ensured that it would have no place in the post-Judicature system.

In the post-Judicature legal system the forms of action came to represent substantive obstacles in the path of the actionability of representations. A negative proposition such as 'not contract' had no status in the post Judicature system. As a result of the nineteenth century cases discussed above, the substantive law of promissory obligations could only be understood in the context of the fonns of action. It was "secreted in the interstices ofprocedure".237

Parties that are not yet in a contractual relationship, due to, for example, a failure of exchange as in Waltons Stores, can be said to be in a relationship of 'near contract' or 'not contract'. During the course of negotiations prior to the establishment of a binding contract, one party may make statements or representations to the other, or give assurances as to his or her future conduct, which may in turn lead to detrimental reliance on this by the other party. However the colonisation of the actionability ofrepresentations within contract and fraud forms ofaction ensured that such representations were not

235 At 367. 236 (1854) 5 HLC 154; 10 ER 868; Chadwick v Manning [1896] AC 231. 237 Maine, Early Law and Custom p389. 266 KIRK - CONFRONTING FORMS OF ACTION actionable in the event that they were detrimentally relied upon. Such statements quite often are not made with an intention to be bound by them, that is they may not constitute terms of the contract, they are considered mere representations.238 These have no contractual force and will not give rise to a claim for breach of contract. Furthermore, due to the restrictions placed on fraud by the decision in Derry v Peek, in order for a statement to be actionable it must be false. This means that any such statement relied upon by the other party to the contract to his or her detriment will not give rise to any obligation on the representor recognised by the common law.239 The dominance of the forms in the substantive law ensured that these representations would have no effect on the relations between parties because they do not fall within the scope of contract or fraud forms of action and are therefore not actionable.

Waltons Stores was an example of a relationship of 'not-contract' due to a failure of 'exchange'. The Court found 'not contract', that is the requisite elements of contract form of action were not made out, yet the substantive merits were with the Mahers and they were entitled to relief. However the Court could not simply conclude 'not contract' and provide a remedy, as this has no substantive meaning in the form-bound law. But the Court recognised that on the facts 'not contract' did not mean no substantive law but simply 'not in a contract form of action'. Therefore this did not exclude liability arising from another fonn of action. It was necessary for the Court to find a reason to provide the Mahers with a remedy and this could only be achieved through the creation of another form of action, namely promissory estoppel, as the substantive law can only be defined in terms of positive statements which derive from the forms of action. The substantive law is "secreted within the interstices ofprocedure".240

The dominance of the forms is revealed in the reasoning of the judgments of the High Court. Mason CJ and Wilson J consider that they are restricted by the nineteenth century precedents which entrenched the place of the forms as

238 Lindgren, Carter and Harland, Contract Law in Australia (Butterworths, Sydney 1986) p325. 239 Although now the law of negligence has expanded so as to impose liability for negligent mis-statements. Hedley Byrne & Co v Heller & Partners [1964] AC 465. See Misrepresentation Act 1971 (SA) s7 and also the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (SA) which allow actions in respect of false and misleading conduct inducing a contractual relationship. However some statements of future conduct are not actionable. 240 Maine, Early Law and Custom p389. (1991) 13 ADEL LR 267 substantive restrictions in the post-Judicature system.241 They recognise that these place substantive restrictions on the doctrine of estoppel by conduct. However, they seek to circumvent these cases by creating a 'new' fonn of action in promissory estoppel. However this is simply to accept the dominance of the fonns and to find a way of providing relief within the restraints of a form-bound system.

Deane J is also a forms of action judge. Although his Honour indicates that he sees no reason to limit estoppel by conduct to representations of fact, that is he is willing to deny Jorden v Money to the extent that it provides that representations of intention are insufficient to found an estoppel, he does not address the more fundamental aspect of Jorden v Money, namely that representations of intention that are not contained in a contract are unenforceable.

The acceptance of the forms of action reasoning of Jorden v Money as a substantive limitation in the post-Judicature system, established that a representation of intention must be contained in a contract or it will be unenjorceable.242 In other words, unless the requirements of contract form of action are satisfied, including consideration, a statement of intention will be unactionable. This excluded the possibility of any other form of action enforcing promises. Deane J does not acknowledge this fundamental aspect of Jorden v Money and it is for this reason that he goes on to say that estoppel by conduct can strengthen consideration by operating in circumstances with which it is inadequate to deal.243 However this cannot be the case unless the substantive restriction imposed by Jorden v Money is buried. That is, unless it is recognised that statements of intention not contained in contracts can be enforceable then the forms of action will continue to dominate the law. It is in this sense that Deane J is a forms of action judge. It is Brennan J who appears to go the furthest in denying the forms of action. His Honour recognises that 'not contract' should not necessarily mean that there are no rights and duties, no substantive law. As outlined above, in a fonn-bound system negative propositions have no substantive significance. Brennan J attempts to give substance to 'not contract', and to this extent he denies the dominance of the forms of action. He does this by recognising that proprietary estoppel provides relief in a situation of not contract and that

241 Particularly Jorden v Money. 242 Chadwick v Manning [1896] AC 231. 243 Waltons Stores v Maher at 453. 268 KIRK - CONFRONTING FORMS OF ACTION there is no reason why promissory estoppel cannot perfonn the same role. Equity will allow an action on the representation where there is 'unconscionable conduct' on the part of the defendant, to provide a remedy in the absence of a contract His Honour defmes equitable estoppel so that it accomodates the relationship of 'not contract'. Brennan J attempts to give substance to that which has no status in a system dominated by the fonns of action by invoking the aid ofequity.

In what sense is Waltons Stores a confrontation of the fonns of action? Recognising that promissory estoppel can be a source of legal obligation, in the absence of a pre-existing legal relationship, is to say that promissory estoppel compels adherence to the representation itself where it would be unconscionable for the defendant to resile from the promise occasioning detriment to the plaintiff. This is to deny the authority of the nineteenth century precedents which establish that estoppel cannot of itself give rise to a cause of action but can only prevent a departure from an assumed state of affairs for the purposes of establishing another cause of action.244 It is clear from Brennan J's judgment that promissory estoppel compels adherence to an actual state of affairs, it acts on the representation itself] it is a source of legal obligation, independent of any other cause of action.245 To suggest this is clearly to reject the authority of the nineteenth century precedents which disavowed equity of its jurisdiction to make representations good which provided an action on the representation itself. By revitalising the equitable jurisdiction Waltons Stores is a confrontation of the fonns of action. THE EMERGENCE OF EQUITABLE ESTOPPEL

In Waltons Stores the Court assimilated the doctrines of promissory and proprietary estoppel.246 The Court considered that these were "mere facets of the same general principle".247 What is the significance of equating promissory estoppel and proprietary estoppel? If promissory estoppel is now to operate in the same way as proprietary estoppel what effect will this have on the relationship of parties in a 'not-contract' situation? How will it assist the promisee who, for one reason or another, is unable to gain the safety of a contractual relationship?

244 Low v Bouverie [1891] 3 Ch 82. 245 Waltons Stores v Maher at 428-429, per Brennan J. 246 See the judgments ofMason CJ and Wilson J at 402-403 and Brennan J at 426. 247 At 403. (1991) 13 ADEL LR 269

As was outlined above, proprietary estoppel has always been recognised as giving rise to a cause of action. It was able to evade the substantive restrictions imposed by the nineteenth century precedents and as such was the only survival from the old equitable jurisdiction of making representations good. It has always been more than a mere shield, it could be used to compel the conveyance of a legal estate.248 However in Waltons Stores the High Court accepted promissory estoppel as a cause of action, and thereby brought promissory estoppel into line with proprietary estoppel. The two estoppels were seen as being merely types of 'equitable' estoppel. The decision makes it clear that where an equitable estoppel arises. the court has a broad discretion to grant relief. The Court endorsed the words of Scarman LJ in Crabb that the remedy is the "minimum equity to do justice".249 According to Mason CJ and Wilson J the object of the remedy is to prevent the detriment which is brought about by the unconscionable conduct. It is not concerned with making the representation good or giving effect to the expectation interest per se but rather providing a remedy to remove the injustice.250 Their Honours considered that it is this which distinguishes equitable estoppel from contract.251 !:# However in a number of proprietary estoppel cases the court has ordered an outright transfer of the property to the plaintiff,252 or otherwise substantially fulfilled the expectations of the representee.253 The explanation behind these cases may be that it was the fulfillment of the expectation which was the minimum equity to do justice. However it also shows a willingness of the court to 'make representations good'. As has been shown, the satisfaction of expectation interests has, since the devastation of the nineteenth century brought about by the Judicature Acts, been the province of the law of contract. It was settled that a promise could only be enforced if it was contained in a contract.254 Proprietary estoppel survived these events,

248 Lord Denning said "... there are estoppels and estoppels. Some do give rise to a cause of action. Some do not. In the species of estoppel we call proprietary estoppel, it does give rise to a cause of action." Crabb at 187. 249 At 198. See also Waltons Stores v Maher at 404, per Mason CJ and Wilson J; Commonwealth v Verwayen (1990) 95 ALR 321 at 345, per Brennan J. 250 Waltons Stores v Maher at 406. 251 At 406. 252 Dillwyn v Llewelyn (1862) 4 De GF & J 517; Pascoe v Turner [1979] 1WLR 431. 253 Jackson v Crosby (No 2) (1979) 21 SASR 281; Greasley v Cooke [1980] 1WLR 1306; Riches v Hogben [1986] 1 Qd R 315; ER Ives Investments v High [1967] 2 QB 379; Re Basham (Dec'd) [1986] 1WLR 1498. 254 Jorden v Money. 270 KIRK - CONFRONTING FORMS OF ACI10N however to equate promissory estoppel with proprietary estoppel, so that it too can give effect to expectations, is to inflict a severe blow to the doctrine of consideration and therefore the law ofcontract.

Furthennore, the decision in Derry v Peek colonised the actionability of representations of fact to those which were false, and was subsequently interpreted as disavowing equity of its compensatory jurisdiction. If equitable estoppel cannot provide compensation then the only available remedy is to enforce the promise. If this is the case then equitable estoppel has emerged .,.as a more lethal weapon than its predecessor in the pre Judicature system which could make representations good or provide compensation in lieu thereof. If equitable estoppel is to provide compensation where it would be inequitable to compel adherence to the representation, then it is necessary to deny the authority ofDerry v Peek.

Despite the denials from the Bench in Waltons Stores255 this assimilated doctrine of equitable estoppel is not only a "case of equity supplementing where the law of contract offers no remedy .... but of equity supplying an additional and perhaps alternative cause of acttbn to the one in contract".256 It creates the potential for "much of the area of enforcement of expectations traditionally protected by the law of contract to be by-passed."25THowever in Waltons Stores the High Court was at pains to point out that equitable estoppel does not undennine the doctrine of consideration rather it occupies "ground left vacant due to the constraints" on the doctrine,258 or "in special circumstances in which it is inadequate to deal".259 But, as has been seen above, with its potential to give effect to expectations, equitable estoppel has the potential to create a &tgnificant inroad into the doctrine of consideration and contract law itself.26

255 Waltons Stores vMaher at 429-425, per Brennan J; 453, per Deane J. 256 Nicholson, "Riches v Hogben: Part Perfonnance and the Doctrines of Equitable and Proprietary Estoppel" (1986) 60 AU 345 at 348. 257 As above. 258 Waltons Stores v Maher at 402. 259 At 453. 260 Swanton, "The Convergence ofContract and Tort" (1989) 12 Syd LR 40 at 53. 261 Bower & Turner, Estoppel by Representation (Butterworths, London, 3rd ed 1977) p387. (1991) 13 ADEL LR 271 reconciliation. As this article has shown, the nineteenth century judges resolved this in favour of a contract form of action.

By throwing the doctrine of consideration into doubt, the decision raises the possibility of gratuitous promises being enforced, an idea heretical to the common lawyer of the twentieth century.262 However this article has revealed it was the Judicature Acts which converted procedural restrictions such as consideration into substantive doctrines of law. Once it is recognised that it was the interpretation of the Judicature Acts which gave consideration its status as a substantive doctrine of law, it is inevitable that it should come under scrutiny by a Court committed to the abolition of the forms of action. Consideration is merely tied to the forms of action, it is a 'not contract' doctrine. Once the forms are confronted, and the reality behind the nineteenth century precedents is exposed, it will be necessary to consider whether it ought to remain as a substantive requirement for the enforcement of representations of intention. It will be necessary to redefme the substantive limits of the law, absent fonn.

However, with the exception of Deane J, none of the justices of the High Court recognised that they were challenging the authority of these nineteenth century precedents which guarantee the place of the forms of action in the post-Judicature system. Their Honours considered that these precedents could be circumvented by invoking the aid of equity in its emanation of promissory estoppel.263 However this is to say that the forms of action continue to define the substance of the law, but where equity is invoked the fonns can be dispensed with. Waltons Stores exposes not only the fallacy behind the 'abolition' of the forms of action but also the fallacy of the 'fusion' of law and equity effected by the Judicature Acts. The law continues to rely on equity in the manner it did in the pre-Judicature system. The role of the forms ·of action is accepted but equity is invoked where adherence to the

262 Waltons Stores v Maher at 406. In their joint judgment, Mason CJ and Wilson J state that the doctrine of promissory estoppel extends to the ttenforcement of voluntary promises on the footing that a departure from the basic assumptions underlying the

ttansaction between the parties must be unconscionableIt. However a mere failure to fulfill a promise is not unconscionable, something more is required. Referring to Humphrey's Estate their Honours said that the requirement would be satisfied by the creation or encouragement in another that a contract will come into existence or a promise will be performed, and this is relied upon to the detriment of the other party who created the expectation or assumption. 263 At 399ff, per Mason CJ and Wilson J; 416ff, per Brennan J. 272 KIRK - CONFRONTING FORMS OF ACTION fonns of action would cause injustice. This is to continue to be a slave to the fonns of action. They still rule us from their graves.

In contrast to the rest of the Court, Deane J advocates the unification of common law and equitable estoppel. His Honour recognises that in a fused system of law, the doctrine of estoppel should be seen as a substantive doctrine not simply as an equitable creation. However to say that there is unity between estoppel by conduct (as defined by the common law) and equitable estoppel, is to challenge the authority of the nineteenth century precedents which ensure the authority of the common law in the post Judicature system. IT equitable estoppel can operate so as to give effect to representations in the absence of a contract or any other traditional form of action, then there is an obvious inconsistency in the law. There are two jurisdictions in need of reconciliation. It is not possible to say that contract law insists upon the presence of consideration but upon the "incantation of the magic word Equity", this is dispensed with.264 By advocating thefusion of law and equity Deane J poses the very dilemma which faced the judges in the post-Judicature system, that which they resolved by entrenching the place of the common law forms of action. Deane J is in effect challenging the Court to reconsider whether it should be the common law, which is dominated by the forms, or equity, which denies the forms, which should emerge as the victor in the post-Judicature system.265 Fusion requires the Court to decide which of these two divergent streams ought to represent the substantive law of estoppel. However more recent cases indicate that the Court is taking up this challenge and defining the substantive law of estoppel.

THE EMERGENCE OF SUBSTANTIVE ESTOPPEL

In Foran v Wight,266 a case decided at the end of 1989, vendors under a contract for the sale of land were unable to and failed to convey title on the day made essential for the settlement of the contract. They had caused the appellant purchasers to be advised in advance of their inability. The purchasers did not tender perfonnance on the stipulated day, having themselves problems in obtaining finance. After an interval the purchasers purported to rescind. The High Court upheld the decision of Needham J,

264 Dawson, "Making Representations Good" (1982) 1 Cant LR 329 at 341. 265 However, given that Deane J is essentially a foons of action judge, it is not surprising that, as will be shown in the analysis of Commonwealth v Verwayen, he reconciles this in favour ofcontract form ofaction and thus the common law. 266 (1989) 88 ALR 413. (1991) 13 ADEL LR 273 reversing the decision of the New South Wales Court of Appeal, that the purchasers were entitled to rescind for repudiation or anticipatory breach. The case concerned principally the requirement that a party be ready and willing to perform its contractual obligations in order to terminate for breach of the other party's concurrent obligations, however the High Court found it necessary to consider the expanding scope and application of the principles ofestoppel. The Court considered that a party who intimates to another party that he or she does not intend to perform part of the contract, thus rendering it useless for the other to perform, will be estopped from asserting that the failure to perform is a breach of contract or a failure to fulfil an obligation upon which the frrst party's obligation depends, provided that there was detrimental reliance on the intimation.267

Of significance are the comments made by Mason CJ and Deane J about the doctrine of estoppel. Mason CJ found that upon reflection after Waltons Stores, it should be recognised that a common law estoppel as well as an equitable estoppel may arise out of a representation or mistaken assumption as to future conduct.268 To do so would be to give greater unity and consistency to the general doctrine of estoppel.U,9 His Honour pointed out that it was the "apprehension that representations as to future conduct, unsupported by consideration would invade the territory of promises for valuable consideration that led to the confinement of common law estoppel to representations of existing fact".270 With respect, this is an accurate assessment of Jorden v Money. His Honour went on to say that now "the dam wall has fractured at its most crucial point".271

In Foran v Wight His Honour showed his willingness to break: free from the constraints of the forms of action reasoning in Jorden v Money and recognised that representations of intention can be given effect to in the absence of consideration through the medium of estoppel by conduct, which ought to be seen as a substantive doctrine of law in a fused system. Deane J agreed, endorsing the view he proposed in Waltons Stores that estoppel by

267 Jackman, "Contract for Sale of Land" (1990) 64 AU 287 at 288. There was much common ground in the five judgments, but differences emerged on the question whether the requirement of detrimental reliance had been made out. At 431, per Mason CJ; at 437, per Brennan J; at 450, per Deane J; at 460, per Dawson J; at 464, per GaudronJ. 268 Foran v Wight at 431. 269 At431, endorsing the view of Deane J in Waltons Stores at 451-452 and 459. 270 Foran v Wight at 431. 271 At431. 274 KIRK - CONFRONTING FORMS OF ACTION conduct ought to be seen as a substantive doctrine in a fused system.272 Despite the fact that both of their Honours indicated their recognition of the substantive effects of fusion, neither of them attempted to reconcile the inconsistency this introduces in the law. This was not to be addressed until the decision in Commonwealth v Verwayen. 273

In this case the appellant, who was injured as a result of a collision between HMAS Voyager and HMAS Melbourne on the night of 10 February 1964, relied on an undertaking by the Commonwealth to admit liability in negligence and to waive the Statute of Limitations.274 Having admitted liability, only the question of damages remained in issue. However, the Commonwealth subsequently amended its defence claiming it owed no duty of care and that the action was statute barred. Verwayen argued that the Commonwealth was estopped from resilin~. from its promise and was successful. In the Victorian Supreme Court275 Kaye and Marks JJ, in their joint judgment, stated that the proper interpretation of the Commonwealth's conduct was that it had made a representation to the appellant as to its future conduct which had been relied on by him to his detriment.276 Their Honours considered that promissory estoppel, as outlined in Waltons Stores, was applicable on the facts, and had been successfully made out by the appellant. The Commonwealth was therefore estopped from resiling from its promise not to plead the statute.277 In dissent, King J was not prepared to find an estoppel. His Honour was not convinced that the detriment sufferred by the

272 However on the facts his Honour considered that it was unneccessary to decide whether the vendor's representation related to a present or future state of affairs or whether the purchasers were seeking to use estoppel as a sword rather than as a shield. His Honour indicated that he was now prepared to take the step he refrained from taking in Waltons Stores to accept that "the doctrine of estoppel by conduct extends as a matter of principle, to a representation or induced assumption of fact or law, present or future". At 448 quoting Denning U in Moorgate Mercantile Co Ltd v Twitchings [1976] QB 225 at 242. 273 (1990) 95 ALR 321. 274 It is interesting to note that this was in a non-contractual context and a much broader approach was taken than in Austotel Ply Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR582. 275 Verwayen v Commonwealth [1989] VR 712. 276 Their Honours dismissed the argument of waiver. 277 See also Waverley Transit Ply Lty v Metropolitan Transit Authority (1988) 16 ACLD 253 in which equitable estoppel was applied to a case where a transit authority induced an expectation that a short-term contract would be renegotiated and renewed. The remedy given was to compel the authority to renew the contract for a further two years. (1991) 13 ADEL LR 275

appellant was as a result of acting in reliance of the assumption. Turning to the question of remedy, his Honour noted that equity gives a remedy "conuilensurate with the detriment sufferred"278 and in the circumstances he would have ordered an enquiry into the out of pocket expenses as a result of the Commonwealth's change of mind.279

The Commonwealth appealed to the High Court and in a 4:3 decision delivered on 5 September 1990, the Court dismissed the appeal, holding that the Commonwealth was prevented from resiling from its undertaking not to plead the defences.28O The minority dismissed both the estoppel and waiver arguments, Mason CJ and Brennan J fmding insufficient detriment beyond an order for costs.281 In the majority, Deane and Dawson JJ held in favour of Verwayen on the issue of estoppel, finding that the Comonwealth was estopped from resiling from its promise not to rely on the defences.282 For the purposes of this article it is necessary only to consider the argument of estoppel.

Mason CJ expressed his view that estoppel is "a label which covers a complex array of rules spanning various categories",283 yet all of these categories are intended to serve the same fundamental purpose, namely "protection against the detriment which would otherwise flow from a party's change of position if the assumption (or expectation) that led to it were deserted".284

Examining again the proposition in Jorden v Money that to establish an estoppel by conduct the representation must be one of fact, his Honour pointed out that this was "seemingly founded on the notion that to hold a person to his conduct which he caused another to adopt or accept was tantamount to enforcing a voluntary promise in the absence of

278 Verwayen v Commonwealth at 734. 279 With respect, the approach of King J on the question of remedy is more appropriate. Whatever the merits of the plaintiffs case, the detriment sufferred by him as a result of his reliance were only his costs and the delay. See Nicholson, "Two Recent Decisions Following Waltons Stores (Interstate) Ltd v Maher" (1989) 2 CBU 195 at 199. 280 Deane, Dawson, Toohey, Gaudron JJ; Mason CJ, Brennan, McHugh JJ dissenting. 281 McHugh J dismissed both arguments of estoppel and waiver. 282 Toohey and Gaudron JJ found for Verwayen on the basis of waiver. 283 Commonwealth v Verwayen at 330 284 At 330. Mason CJ cited Waltons Stores vMaher at 404, per Mason CJ and Wilson J; at 419, per Brennan J; Grundt v Great Boulder Pty Gold Mines (1938) 59 CLR 541 at 674-675. 276 KIRK - CONFRONTING FORMS OF ACTION consideration".285 However now neither "the decision nor the reasoning in that case can be sustained".286 Promissory estoppel had "undennined the idea that volunt~ promises cannot be enforced in the absence of consideration".287

Turning to the question of the fusion of the doctrine of estoppel by conduct at law and in equity, his Honour pointed out that the trend of modern decisions "points inexorably towards the emergence of one doctrine of estoppel rather than a series of independent rules."288 However the "obstacle" which prevented this "single overarchinjt doctrine" was the "suggested difference" in the protection they afford.289 At common law, estoppel by conduct was seen as merely evidentary whereas "equity was more flexible" and "would do what was necessary to prevent the suffering of detriment".290 However his Honour went on to say that "estoppel by conduct has expanded beyond its evidentary function into a substantive doctrine" and that "there is no longer any purpose to be served in recognising an evidentary fonn of estoppel operating in the same circumstances as the emergent rules of substantive estoppel".291

Mason CJ stated that "a central element" of the doctrine is that there be a "proportionality between the remedy and the detriment which is its purpose to avoid".292 His Honour pointed out that "it must be borne in mind that a voluntary promise is generally not enforceable" and that "the breaking of a promise, without more, is morally reprehensible, but not unconscionable in the sense that equity will necessarily prevent its occurrence or remedy the consequent loss".293 However he indicated that "reliance upon an assumption for an extended period may give rise to an estoppel justifying a court in requiring that the assumption be made good. "294 Furthennore, "the

285 Commonwealth v Verwayen at 331. 286 At 331. 287 At 331. 288 At 331, citing Waltons Stores (1988) 164 CLR 387; Foran v Wight (1990) 64 AUR 1; (1989) 88 ALR 413; Collin v Holden [1989] VR 510; Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133; Amalgamated Property Co v Texas Bank [1982] QB 84; A-G (Hong Kong) v Humphreys Estate Ltd [1987] 1 AC 14. 289 Commonwealth v Verwayen at 331. 290 At 332. 291 At 332. 292 At 333. 293 At 335. 294 At 335, emphasis added. (1991) 13 ADEL LR 277 same result may follow from substantial and irreversible detriment suffered in reliance upon the assumption or from detriment which cannot satisfactorily be compensated or remedied".295 However on the facts the detriment suffered by Verwayen was "of a more limited nature"296 and "to hold the Commonwealth to its representations would be a disproportionate response to the detriment suffered "297 His Honour therefore made an order for costs.

It is submitted that Mason CJ's judgment is crucial in the process of the abolition of the substantive limits of the fonns of action. His Honour takes up the challenge posed by Deane J in Waltons Stores, and accepts the responsibility of burying the nineteenth century precedents from the substantive law of estoppel. As explained above, to suggest that law and equity are now unified and that the doctrine of estoppel should be seen as a substantive doctrine in a fused system, is to challenge the authority of the ninteenth century precedents, to challenge the authority of the forms of action.298 This is because these nineteenth precedents guaranteed the place of the common law in the fused system and denied the equitable doctrine of making representations good. By ensuring that representations of intention can only be given effect to in contracts (Jorden v Money), that estoppel cannot give rise to a cause of action (Low v Bouverie), and that representations are only actionable if they are false representations of fact (Derry v Peek), the common law judges ensured the authority of the common law in the fused system.

In Waltons Stores it was unnecessary for Mason CJ to confront these issues as his Honour treated promissory estoppel as an independent equitable doctrine which could circumvent Jorden v Money,299 and avoid the other restrictions on estoppel as defined by the common law, particularly Low v Bouverie. However in order to unite common law estoppel with promissory (or equitable) estoppel it was necessary to reconcile their inconsistencies and determine what ought to represent the substantive elements of the doctrine. It was necessary to determine whether promises can only be given effect to in contracts or whether the jurisdiction recognised in the pre-Judicature system in equity ought to represent the substantive law. Unlike the common law judges of the nineteenth century, Mason CJ resolved the problem in

295 At 335. 296 At 335. 297 At 336, emphasis added. 298 Query whether Gaudron J also recognises this. 299 Waltons Stores v Maher at 399ff. 278 KIRK - CONFRONTING FORMS OF ACTION favour ofequity. In this way his Honour avoided the restrictive results which derive from an adherence to the forms of action, and ensured that the remedy could be made commensurate with the detriment suffered.

Brennan J also recognised that to hold the Commonwealth to its representation would be a remedy disproportionate to the detriment suffered. He found that an equitable estoppel which "ensures that a party who acts in reliance on what another has represented or promised suffers no unjust detriment thereby" arose on the facts. 3OO He pointed out that "there is at least a theoretical possibility that an equity arising from estoppel could be invoked to debar a defendant from resiling from a promise not to contest an issue at trial or not to raise a defence".301 The remedy associated with equitable estoppel "is not designed to enforce the promise although, in some situations, the minimum equity will not be satisfied by anything short of enforcing the promise".302 On the facts enforcing the promise was "not the minimum equity needed to avoid the relevant detriment", as the only relevant detriment was the financial loss in continuing with the action until the defence was amended.303

McHugh J found that on the facts the claim of estoppel failed. 304 His Honour considered that it was "unnecessary to decide" whether "common law and equitable estoppel are now unified"305 but he considered that common law estoppel was still confined to representations of fact. 306 However his Honour did indicate that had the claim succeeded "his equity would be satisfied by an award of compensation ... and would not require that the Commonwealth be estopped from relying on the Limitation Act."307 His Honour further considered that "often the only way to prevent the promisee suffering detriment will be to enforce the promise" although "the enforcement of promises is not the object of the doctrine of equitable estoppel", this is "the province ofcontract".308

300 Commonwealth v Verwayen at 341. It can be said that Brennan J in no way departed from his approach in Waltons Stores. 301 At 344. 302 At 345. 303 At 345. 304 It can be said that in substance McHugh J adopted the approach of Brennan J in Waltons Stores as regards the law ofestoppel. 305 Commonwealth v Verwayen at 396. 306 At 396. 307 At 400. 308 At 397. (1991) 13 ADEL LR 279

Gaudron J did not decide the case on grounds of estoppel however she did point out that "the object of an estoppel is to avoid detriment and not to make good the assumption on which it is founded".309 Her Honour indicated that she agreed with Mason CJ that "the substantive doctrine of estoppel permits a court to do what is required to avoid detriment, and does not in every case, require the making good of the assumption".310 Toohey J also indicated that "the consequence of promissory estoppel is that the court should enforce the promise only as a means of avoiding detriment and to the extent necesary to achieve that end."311

In contrast Deane J, the fonns of action judge, an adherence to the fonns of action found that the only remedy he could provide was an enforcement of the assumption which on the facts of the case was clearly disproportionate to the detriment suffered by Verwayen. The judgment of Deane J is a classic example of the rigidity associated with forms of action reasoning. Although his Honour adhered to the view he advocated in WaltonsStores and Foran v Wight that "promissory estoppel is but one aspect of a general doctrine of estoppel by conduct which should, under a modern Judicature Act system with merged availability of remedies, be seen as operating indifferently in both law and equity",3I2 he made it clear that he has now been caused to "reconsider the question ofthe relationship between the two". 313

Fundamental to this "reconsideration" was a recognition that promissory estoppel "does not create new causes of action" but only "prevents a party from insisting upon his strict legal rights",314 and that it "does not of itself give rise to any entitlement to relief in equity".315 Promissory estoppel confonns with "the true proposition of law, that while a party cannot in terms found a cause of action on an estoppel, he [sic] may, as a result of being able to rely on an estoppel, succeed on a cause of action on which,

309 At 387. 310 At 387, emphasis added. Although her Honour did not pursue the issue it seems that she has recognised that estoppel by conduct (as defmed by the common law) and equitable estoppel are now "fused". 311 At 379. 312 At 347. 313 At 347. 314 At 347, quoting Denning U in Combe v Combe [1951] 2 KB 215 at 219. 315 At 350. 280 KIRK - CONFRONTING FORMS OF ACTION without being able to rely on that estoppel, he would necessarily have failed."316

In a statement which summarises his Honour's understanding of the doctrine ofestoppel by conduct he said,317

... estoppel does not of itself provide a cause of action either in law or in equity. A fortiori, estoppel does not ofitselfprovide an independent cause of action either in equity for non-traditional equitable relief in the fonn of compensatory damages, under Lord Cairns' Act or subsequent statutory provisions, for the detriment caused by a departure from an otherwise unenforceable promise as to future conduct. If it did, promissory estoppel could no longer be said to provide a basis upon which ordinary principles of law, including the doctrine of consideration, would operate. To the contrary, it would directly confound the doctrine of consideration and, in a case of promissory estoppel where consideration had moved from the promisee but compensatory damages for detriment sustained exceeded damages for loss of bargain, simply override the law ofcontract.

As subrrJtted above, Deane J's judgment is classic fonns of action reasoning. He no longer accepts the view of the majority in Waltons Stores that promissory estoppel can be a sword as well as a shield.318 Rather promissory estoppel is simply an 'ingredient' which may be used in an evidentary way to establish another form of action. This is to accurately state the common law rule of estoppel as accepted in Pickard v Sears and as entrenched into the fused system by Low v Bouverie, and to deny the equitable jurisdiction to make representations good which allows an action to be brought on the representation itself in the absence of any recognised fonn of action. However to say that this restriction should apply to promissory estoppel, and then say that this ought to represent the substantive law of estoppel in the post-Judicature system, is to do precisely what the common law judges did in the nineteenth century when they entrenched fonns of action reasoning into the fused law. Deane J's approach is to

316 At 350, quoting Amalgamated Property Co v Texas Bank [1982] QB 84 at 131-132, per Brandon U, emphasis added. 317 Commonwealth v Verwayen at 352-353, emphasis added. 318 It is open to debate whether Deane J actually ever did hold the same view as the majority in Waltons Stores on this point See Waltons Stores v Maher at 444-445. (1991) 13 ADEL LR 281 introduce the restrictions of the common law into the fused system and to guarantee the continued authority of the forms of action. Deane J's refusal to come to terms with the fundamental proposition in Jorden v Money that representations of intention can only be given effect to in contracts caused him to 'reconsider' promissory estoppel as a cause of action because, as this article has shown, it has the potential to undermine this aspect of Jorden v Money and thus contract law itself.

It is clear from the judgment that it was the obstacle of consideration which led Deane J to reach this conclusion.319 Unlike Mason CJ, Deane J, as a fonns of action judge, is concerned that to allow a promise to be enforced in the absence of consideration would be to undermine a contract fonn of action. However, as this article has shown, it was only in the post-Judicature system that consideration was recognised as a substantive limitation on the enforcement of a pronnse,320 and that prior to the Acts, equity, in its role as denier of the fonns, provided a remedy. Once this is recognised, consideration can, if necessary, be regarded as merely a procedural restriction made obsolete by the Judicature Acts. In a fused system which has buried the forms of action there is no reason why the equitable jurisdiction should not revitalised, if it is decided that the substantive elements of promissory obligation do not of necessity include consideration. However Deane J rejects the notion that equity can give rise to "some imprecise cause· of action for whatever relief might seem fair in the circumstances".321 Deane J, being a fonns of action judge, accepts the authority of the fonns and therefore must deny the place of equity and its doctrines because equity's role has traditionally been as denier of the fonns.

It is on the question of remedy that the rigidity of the judgment is revealed. His Honour was of the view that "if the Commonwealth were now allowed to depart from the assumed state of affairs, the detriment which Mr Verwayen would sustain could not be measured in terms merely of wasted legal costs".322 His Honour considered that the appropriate remedy was to enforce the promise. However, given that he has limited the substantive doctrine of estoppel by conduct to its common law basis as a rule of evidence, enforcement of the promise was the only available remedy. As a

319 Commonwealth v Verwayen at 352. 320 In the forms of action system it was purely procedural. This is discussed in more detail in Kirk, "Burying the Ghosts of the Past: The Abolition of the Forms of Action" ppl4 19. 321 Commonwealth v Verwayen at 352. 322 At 359. 282 KIRK - CONFRONTING FORMS OF ACTION rule of evidence, estoppel allows the introduction of the representation to establish an assumed state of affairs for an independent cause of action which, if it was not allowed to be relied on, would cause the action to fail. Therefore on these facts, the representation by the Commonwealth that it would not rely on the defences was crucial in establishing its liability in negligence, the cause of action upon which Verwayen relied. Therefore this representation was being admitted to establish the assumed state of affairs, namely that the Commonwealth was liable in negligence for the injuries sustained, and the Commonwealth was estopped from departing from its representation. Once this is recognised, it is clear why the appropriate remedy was enforcement of the representation. Adherence to the forms of action required the promise to be enforced in circumstances where compensation for reliance was more appropriate.

Deane J did recognise that323

there could be circumstances in which the potential damage to an allegedly estopped party [is] disproportionately greater than any detriment which would be sustained by the other party to an extent that good conscience could not reasonably be seen as precluding a departure from the assumed state of affairs if adequate compensation were made or offered by the allegedly estopped party for any detriment sustained by the other party.

However it is difficult to see how a remedy could be other than the enforcement of the representation if estoppel is but a rule of evidence. It is only when estoppel by conduct is freed from the forms of action in the way recognised by Mason CJ that it can provide a remedy comensurate to the detriment. Mason CJ acknowledges this in his judgment,324

... the fact that estoppel by conduct has expanded beyond its evidentary function into a substantive doctrine means that there is no longer any justification for insisting on the making good of assumptions in every case.

Deane J's judgment reveals the extent to which an adherence to forms of action reasoning leads to inconsistency. The obvious inconsistency which arises from the judgment is that to say that estoppel by conduct compels adherence to a future state of affairs when this future state of affairs is a

323 At 354. 324 At 332. (1991) 13 ADEL LR 283 promise made without consideration, is quite simply to say that an action can be brought on a promise outside a contract form of action. Deane J is at pains to dispel the notion that estoppel by conduct can be a sword, however this is the consequence ofhis judgment.

The other anomaly in the judgment is that Deane J precludes the intervention of equity in the detennination of a 'right' but allows it to operate in the detennination of a 'remedy'. As a fonns of action judge, Deane J cannot pennit equity to intervene in the detennination of right, as this would be to deny the place of the forms of action. However, when it comes to the provision of a remedy, Deane J recognises that to hold the representor to the representation in every case, which is what the forms require, would "exceed the requirements of good conscience".325 This reveals the difficulties associated with an adherence to the forms. Deane J's judgment is inconsistent because he allows the role of equity in detennining remedy but not in detennining right. This is in contrast to Mason CJ who allows equity to detennine both right and remedy. Because equity is the denier of the forms, to allow equity to take a leading role in the determination of the substantive law of estoppel in a fused system is to abolish the forms of action.

It appears that Dawson J is a forms of action judge like his brother Deane J. His Honour recognises that the basic considerations underlying common law and equitable estoppel have always been the same however the "only thing standing in the way of their parallel development has been the persistence of the view at common law that to succumb to a doctrine of promissory estoppel would be to undennine the foundations of the law of contract".3Z6 However his Honour goes on to say that it is the "requirement of unconscionable conduct" and "the discretionary nature of the relief in equity" which "is now seen as the protection against undue intrusion upon the law of contract, for a voluntary promise ofitself will not give rise to an estoppel".327 ,

His Honour, like Deane J, confines estoppel to its common law basis, that is as a rule of evidence.328 Finding that the Commonwealth had induced Verwayen to adopt the assumption that it would not plead the defences,

325 At 359. 326 At 362. 327 At 363, emphasis added. 328 At 367. 284 KIRK - CONFRONTING FORMS OF ACTION which he relied on to his detriment,329 lead "inevitably to the conclusion that in conscience" it was unable to depart from its representation "having stood by for so long whilst the respondent pursued his claim upon the basis that he was assured of success, subject only to the proof of damage".330 In his Honour's opinion "the appellant was estopped from insisting upon the Statute ofLimitations", and the "equity raised by the appellant's conduct was such ... that it could only be accounted for by the fulfillment of the assumption upon which the respondent's action were based".331 Dawson J's judgment is fonns of action reasoning because he refuses to recognise that promissory estoppel can be a fonn of action, so as to deny the authority of the nineteenth century precedents, particularly Jorden v Money. Like Deane J, his Honour refuses to undennine the fundamental proposition in Jorden v Money, namely that representations of intention can only be given effect to in contracts. He recognises the operation of estoppel as a defensive weapon which can be used as evidence to establish another cause of action, not as a cause of action in its own right. A representation of itself cannot give rise to an estoppel. Dawson J, like Deane J, confines estoppel to its common law basis. It is for this reason that the appropriate remedy was the enforcement of the representation. As his Honour recognises himself, "at common law ... the party who acted to his [sic] detriment was, in effect, given the benefit of the assumption. It was all or nothing".332 However, unlike Deane J, Dawson J refuses to recognise the fusion of law and equity brought about by the Judicature Acts. Dawson J is a common law judge operating in a pre-Judicature forms of action system. It seems, with respect, that his Honour has little appreciation of the 'abolition' of the forms of action.

On the facts in Verwayen, Mason CJ considered that an order for costs was sufficient to compensate for the detriment suffered. Neither his Honour nor any of the other judges indicated the juridical basis for an order for 'compensation' had the detriment suffered been recognised as exceeding simply the costs incurred as a result of the continued litigation. This remains unclear after the decision, however it is submitted that a burial of the decision in Derry v Peek, which denied a compensatory jurisdiction in equity, would remove this obstacle in the path of the provision of a remedy which can compensate for the detriment suffered. Alternatively, now that it

329 At 367. 330 At 368. 331 At 369. 332 At 363. (1991) 13 ADEL LR 285 is recognised that estoppel by conduct is a substantive doctrine of law and equity, there is no reason to maintain a distinction between the remedies which each jurisdiction has traditionally provided.333

In conclusion, it can be said that the decision in Commonwealth v Verwayen was an important step in the process, commenced in Waltons Stores, of recognising the fallacy of the 'abolition' of the fonns of action effected by the Judicature Acts. It indicates a willingness on the part of some members of the Court to challenge the authority of the nineteenth century precedents which guaranteed the role of the fonns as substantive restrictions in the law of promissory obligations. The emergence of estoppel as a substantive doctrine demanded a reconsideration of the dilemma which faced the nineteenth century judges in the early days of the post-Judicature system. However, it is evident that some members of the High Court, particularly Mason CJ, are recognising the error which was made by their forefathers, and are attempting to oust the substantive dominance of the common law fonns of action in the fused system. The judgment of Mason CJ reveals the the flexibility of both right and remedy which results when the forms of action are abolished. In contrast, the judgments of Deane and Dawson JJ reveal the rigidity and inconsistency which follow from a continued adherence to the forms of action. Mason CJ is leading the way in the abolition of the forms of action, and if the other judges follow his lead then the outcome may well be a radical transfonnation of the law of promissory obligations. It will require a reassessment of the doctrines which have, until now, been considered sacred. CONCLUSION

These fonns of action have served their day. They did at one time form a guide to substantive rights but they do so no longer.334

A recognition of the fallacy behind the abolition of the forms of action effected by the Judicature Acts is fundamental to an understanding of the modern legal system. The fallacy is twofold and manifests itself in the substantive principles of the law. The effect of the Acts was not to abolish the fonns of action and fuse law and equity, but rather to convert the procedural restrictions of the forms of action into substantive doctrines of

333 This question of fusion between legal and equitable remedies is pursued in chapter 5 of Kirk, "Burying the Ghosts of the Past: The Abolition of the Forms of Action". 334 Letang v Cooper [1964] 2 All ER 929 at 932-933, per Lord Denning MR. 286 KIRK - CONFRONTING FORMS OF ACTION law, and to deny the place of equitable doctrines in the fused system. The interpretation of the Acts by the common law judges of the nineteenth century was not to bury the fonns of action but to give them status as substantive limits of the law in the post-Judicature system.

As a consequence the substantive law became "secreted within the interstices of procedure"335 to the extent that it did not have an existence independent of the forms of action. The modern law could only be understood in the context of the fonns of action. The substantive dominance of the forms was felt perhaps most significantly in the area of promissory obligations. The continued reign of these ghosts of the past into the twentieth century ensured that a representation of intention could only be given effect to if it was contained in a contract. This was the state of the law until the decision in Waltons Stores v Maher.

Waltons Stores v Maher was a crucial decision for the modern legal system because it took up the challenge presented by Maitland's immortal words. The High Court was not prepared to allow the substantive restrictions of the forms of action to prevent it from reaching a just result. To say, as was said in Waltons Stores, that simply because a representation does not fulfil the requirements of contract fonn of action does not mean that the representation cannot be given effect to in another form of action, is to radically transform the law. To recognise that equity can be invoked where the forms of action lead to an unjust result is to return equity to the position it held in the pre-Judicature system. It is to restore equity to its rightful role as denier of the forms.

However once it is recognised that in a fused system it is no longer possible to have two divergent streams of jurisdiction, it is necessary to reconcile these two conflicting streams of law and equity and determine which should represent the substantive law. Whereas in the nineteenth century the common law judges resolved this in favour of the common law, certain members of the High Court are resolving this in favour of equity. This is the significance of Commonwealth v Verwayen because it indicates that some members of the Court are recognising that in a fused system equity should assume a superior role. However more significantly, Commonwealth v Verwayen indicates that the Chief Justice is leading the way in ensuring that equity is now the representor of the substantive law. Once the substantive

335 Maine, Early Law and Custom p389. (1991) 13 ADEL LR 287 effects of fusion are recognised and the forms of action are buried equity will be revealed for what it is; "the common law's greatest fiction".336

To abolish the forms of action requires a reassessment of the substantive limits of the law. It requires a reconsideration of whether, for example, privity and consideration should remain as substantive restrictions in the law of promissory obligations, or whether they should be disregarded as substance derived from form. This is the challenge which lies ahead. However the "secretion and the sovereignty of which Maitland and Maine spoke"337 cannot be removed overnight. It is only on a case by case basis that the substantive limits of the law, absent the forms of action, can be fonnulated and defined. The mistakes of the past must be recognised and rectified so as to ensure that they no longer continue to hinder the development of the law. However most importantly it must be borne in mind that338'"

When these ghosts of the past stand in the path of justice, clanking their mediaeval chains the proper course for the judge is to pass through them undeterred.

336 Detmold, "Australian Law: Freedom and Identity" (1990) 12 Syd LR 482 at 526. 337 Cooke, "The Changing Place ofRemedies" (1989) unpublished. 338 United Australia Ltd v Barclay's Bank [1941] AC 1 at 29, per Lord Atkin.