Waltons Stores (Interstate) Ltd v Maher

Waltons Stores (Interstate) Ltd v Maher
Court	High Court of Australia
Citation(s)	[1988] HCA 7, (1988) 164 CLR 387, 62 ALJ 110
Case opinions
Mason CJ and Wilson J
Keywords
Estoppel, consideration, pre-contractual negotiations

Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7, is a leading case in Australian contract law. The Australian High Court decided that estoppel, in certain circumstances could be a cause of action.

Maher owned some property with buildings on it in Nowra. He was negotiating with a department store company called Waltons Stores for a lease of the land. They wanted an existing building to be demolished and a new one erected.

In reliance on representations made before a contract was completed, Maher demolished the building and started to erect a new one. But the contract never came to completion because Waltons Stores did not sign the lease as Maher had yelled at them and become hostile towards them. Waltons told their solicitors to slow the deal while they did further investigations as to whether the transaction would be good business, but allowed Maher to remain under the impression that the deal would be completed.

The High Court held that to avoid detriment through Waltons' unconscionable behaviour, Waltons was estopped from denying the contract. Whilst the mere exercise of legal right not to exchange contracts was not unconscionable, there were two additional elements which made Waltons' conduct unconscionable: a) element of urgency, b) Maher executed and forwarded on 11/11 and assumed execution by Walton was a formality. The award (though very similar to an expectation interest, as if it were a contract that was enforced) was only meant to cover reliance. Because Maher had acted to his detriment, in reliance on the encouragement of Walton Stores, which had acted unconscionably, equity would intervene.

Mason CJ and Wilson J said the following

28. In Combe v Combe Denning L.J. limited the application of promissory estoppel, as he expounded the doctrine, to ensure that it did not displace the doctrine of consideration. His Lordship's solution of the problem was to hold that the promise should not itself be a cause of action, but merely the foundation of a defensive equity. He said (at p 220):

"Seeing that the principle never stands alone as giving a cause of action in itself, it can never do away with the necessity of consideration when that is an essential part of the cause of action. The doctrine of consideration is too firmly fixed to be overthrown by a side-wind."

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