Estoppel – from the French estoupe, from which the English word ‘stop’ is derived, operates in law to prevent a party from asserting in legal proceedings a position contrary to that which has already been established by some means.
Cooke (2000: 1) defines estoppel as “a mechanism for enforcing consistency; when I have said or done something that leads you to believe in a particular state of affairs, I may be obliged to stand by what I have said or done, even though I am not contractually bound to do so.”
There is no legal consensus on the elements of estoppel. However, three elements have been proven to be necessary as a base:
- Assumption (Austotel v Franklins Selfserve)
The relying party must have adopted an assumption.
- Inducement (Murphy v Overton Investments Pty Ltd)
The assumption adopted by the relying party must have been induced by the representor in some way.
- Detrimental reliance (Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd)
The relying party must have relied on the assumption to the extent that he/she has or will suffer detriment if the representor is allowed to limit their liability for the inducement of the assumption.
Estoppel has evolved significantly throughout legal history, and there are now many different classifications of estoppel. Some of the main variations of estoppel include:
- Estoppel of record
Where the fact at issue has already been judicially determined in earlier proceedings.
- Estoppel in pais (by conduct/representation)
Where the party previously conducted himself/herself in a manner consistent with the position he/she now seeks to deny. There are two types of estoppel in pais: common law and equitable.
- Common law (Jordan v Money) – where the relying party acted upon an assumption of an existing fact.
- Equitable – where the relying party acted upon an assumption as to the future conduct of the representor.
There are a further two types of equitable estoppel in pais: proprietary and promissory.
- Proprietary – where the representor owns land and induces the relying party to believe that they have or will gain an interest in the land.
- Promissory (Waltons Stores (Interstate) Ltd v Maher) – where the representor induces the relying party to believe that certain contractual provisions or pre-contractual negotiations will not be enforced.
- Estoppel by deed
Where the statement a party now seeks to deny was previously asserted by him/her in a deed.