Commonwealth v Verwayen

170 CLR 394
95 ALR 321

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(Judgment by: McHUGH J)

Between: COMMONWEALTH
And: VERWAYEN

Court:

Judges: Mason C.J.
Brennan J.
Deane J.
Dawson J.
Toohey J.
Gaudron J.
McHugh J.

Subject References:
Estoppel

Judgment date: 5 September 1990

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Judgment by:
McHUGH J

The Commonwealth of Australia appeals against an order that an action brought against it by Bernard Leonardus Verwayen ("the plaintiff") be remitted for trial by jury on the issues of negligence and damages. The order, made by the Full Court of the Supreme Court of Victoria (Kaye and Marks JJ., King J. dissenting), set aside a judgment made by O'Bryan J. in favour of the Commonwealth. His Honour had entered judgment for the Commonwealth upon the ground that the plaintiff's action was barred by s 5 of the Limitation of Actions Act 1958 (Vict.) ("the Limitation Act"). The issue in the appeal is whether the Commonwealth waived its right to rely on the Limitation Act and its right to rely on a defence that it owed no duty of care to the plaintiff or, alternatively, whether it is estopped from relying on those two defences.

The history of the proceedings

In his action the plaintiff claimed damages for personal injury suffered as a result of a collision at sea on 10 February 1964 between H.M.A.S. Melbourne and H.M.A.S. Voyager. The action was commenced on 2 November 1984 - over twenty years after the collision. On 14 March 1985, the Commonwealth filed its defence and admitted all the allegations in the statement of claim except the allegation that the plaintiff was injured and had suffered loss and damage. It did not plead that the action was barred by the effluxion of time, as it might have done relying on the Limitation Act. However, by an order made by the Master on 29 May 1986, the Commonwealth was given leave to file an amended defence. The amended defence denied that the collision between the Melbourne and Voyager was caused by the negligence of the officers or crew of those ships or by any other officer or servant of the Commonwealth of Australia. Indeed, par.4 alleged that any injury suffered by the plaintiff occurred during the currency of or as a consequence of combat exercises and that consequently the naval personnel participating in the exercise owed no duty of care to the plaintiff. The amended defence also alleged that the plaintiff's action was barred by Limitation Act.

On 5 June 1986 the plaintiff delivered his reply which joined issue, denied that par.4 of the amended defence disclosed any defence to the action, and asserted that, if the defence of no duty of care or Limitation Act was otherwise a defence to the action, the Commonwealth "agreed to and did waive any such defence".

Before empanelling a jury, O'Bryan J. determined the questions of law raised by the defence of no duty of care and the allegation of waiver upon the basis that the facts relied on in respect of these matters were not in issue or would not be seriously disputed at the trial. His Honour held that the defence of no duty of care was not made out and that neither the doctrine of waiver nor the doctrine of estoppel provided the plaintiff with an answer to the defence based on Limitation Act. Consequently, he entered judgment in the action for the Commonwealth without empanelling a jury.

At the trial, counsel for the plaintiff identified three matters upon which he relied to constitute waiver and estoppel. They were:

(1)

A letter dated 6 September 1984 from the plaintiff's solicitors to the Secretary, Department of Defence, together with copies of other letters. The letter of 6 September stated that the plaintiff's solicitors acted on behalf of five named ex-naval personnel including Mr Verwayen. It went on to say:

"These men are in the same position as their shipmate Mr. Robert Palmer of whom we wrote to you on the 4th of July, 1983. You graciously waived the Statute of Limitations as regards Mr. Palmer and also admitted liability.

...

We request you treat these men the same and waive the Statute to allow us to proceed on their behalf."

The copy letters enclosed with the letter of 6 September related to another person in respect of whom the solicitor for the Commonwealth had advised the plaintiff's solicitors on 21 November 1983 "that the Commonwealth will not rely on the Statute of Limitations in this action".

(2)

A conversation on 25 January 1985, between an employee of the Australian Government Solicitor and the plaintiff's solicitors, in which the employee advised that the Commonwealth proposed to admit liability and waive the Limitation Act in the plaintiff's action.

(3)

The delivery of the defence on 14 March 1985 in which liability was admitted and the Limitation Act was not pleaded .

Two other matters, which do not seem to have been relied on at the trial, should be mentioned. First, on five occasions, the Australian Government Solicitor joined with the plaintiff's solicitors in applications for an expedited hearing of the claim on the ground that liability was not an issue. Secondly, on 27 November 1985 the Minister Assisting the Minister for Defence wrote to the plaintiff stating, inter alia:

"As you have pointed out, the Commonwealth has admitted negligence and is not pressing the statutory limitation period as a defence. Nevertheless, it still expects claimants to show that they have suffered injury as a result of the collision between HMAS Voyager and HMAS Melbourne, and to prove the extent of their injuries and resultant loss, in order to justify an award of damages."

The reasoning of the trial judge and the Full Court

The learned trial judge held that waiver "not supported by consideration and not in respect of a valid and subsisting claim is unilateral and revocable at any time". He thought that the waiver relied upon in the present case was unilateral and voluntary and that the Commonwealth was entitled to withdraw the promise not to plead the defences. His Honour, who gave his decision before this Court's decision in Waltons Stores (Interstate) Ltd. v. Maher (1988) 164 CLR 387 also rejected the claim of estoppel. He did so on the ground, inter alia, that promissory estoppel operates only in the course of an existing contractual relationship.

In the Full Court, Kaye and Marks JJ. said that "(t)he law has not recognised nor come to recognise 'waiver' as a concept independent of 'forbearance', waiver agreements, election, estoppel and promissory estoppel". Accordingly, their Honours held that, if the plaintiff was to succeed, he had to rely on estoppel or promissory estoppel. They held that the Commonwealth had led the plaintiff to understand that his claim would be met, that the Limitation Act would not be pleaded and that, to the knowledge of the Commonwealth, the plaintiff had relied on that promise. Their Honours said that "the application of the principles affirmed by the High Court in Waltons Stores to the facts of the present case lead to the conclusion that the respondent is not to be allowed to resile from its promise not to plead the statute". King J. held that there was no procedure whereby a right can be irrevocably abandoned "in the absence of consideration or the presence of estoppel" and that the claim of waiver failed. On the issue of estoppel, his Honour thought that the injustice to the plaintiff arising from the Commonwealth's change of position would be satisfied by "an inquiry into the out-of-pocket costs and expenses" suffered by the plaintiff as the result of that change. Subject to the payment of these sums, he held that the Commonwealth was not estopped.

Waiver

In this Court counsel for the plaintiff approached the matter differently from the way in which the majority of the Full Court approached the matter. He contended that there had been a true waiver or abandonment by the Commonwealth of the right to plead the Limitation Act and "that (had) been the forefront of (his) case all along". He relied on estoppel only as an alternative answer to the defences of the Commonwealth.

Most cases which purport to apply the doctrine of waiver are really cases of contract, estoppel or election: cf. Ewart, Waiver Distributed, (1917), at p 4. Thus, for example, in Matthews v. Smallwood (1910) 1 Ch 777, where a lessee had breached the condition in the lease, the question for decision was whether the lessor had abandoned his right of re-entry. Parker J. applied what he called the law of waiver and said (at p 786):

"I think that the law on the subject of waiver is reasonably clear. ... Waiver of a right of re-entry can only occur where the lessor, with knowledge of the facts upon which his right to re-enter arises, does some unequivocal act recognizing the continued existence of the lease."

In Sargent v. AS.L Developments Ltd. (1974) 131 CLR 634 , Stephen J. (at p 646), correctly in my opinion, treated this case as one of election. See also Kammins Co. v. Zenith Investments (1971) AC 850.

Nevertheless, there are a number of cases in England and Australia which appear to hold that a party may waive a statutory condition conferred for his or her benefit. At least, some of them cannot accurately be categorised as cases of contract, estoppel or election. An early illustration is Graham v. Ingleby (1848) 1 Ex 651 (154 ER 277) where it was held that the plaintiff had waived the benefit of a statutory provision requiring a plea of abatement to be verified by affidavit. The defendant's affidavit in support of his plea of abatement was defective. However, by his replication the plaintiff traversed the plea, joined issue and delivered a notice of trial. The defendant then struck out the joinder of issue and delivered a demurrer to the replication. The plaintiff, after an unsuccessful application to set aside the demurrer, obtained two separate summonses for time to join issue on the demurrer. But before the time granted expired, he signed judgment in the action for want of a plea. The Court of Exchequer held that he had waived his right to treat the defendant's plea as a nullity. Parke B. said (at p 656 (p 279 of ER)):

"It follows, that although an affidavit is so defective as to amount to no affidavit, a plaintiff may, if he choose, waive the benefit of his right, and join issue on the plea and go to trial; and if he does so, he cannot afterwards avail himself of the provisions of the statute. So, if he should demur to the plea, he would, in like manner, waive the benefit of the statute. If it were otherwise, the inconvenience would be great ..."

Graham v. Ingleby was followed in Park Gate Iron Co. v. Coates (1870) LR 5 CP 634 which involved a statute obliging an appellant to give written notice of appeal and security for costs within ten days. Although the respondent in the case was aware that the appellant had not complied with the statute, he proceeded to settle a special case in concert with the appellant. The Court of Common Pleas held that the respondent had waived his right to rely on the statutory requirement as to notice and the giving of security within ten days. Bovill C.J. said (at p 637):

"The provisions of s 14, that there shall be notice of appeal and security, seem to me more in the nature of procedure and practice, and to have been intended for the benefit of the respondent. It is not a matter with which the public are concerned. If this be so, it falls within the rule that either party may waive provisions which are for his own benefit ... where the provisions of the Act are entirely for the benefit of the respondent, we may hold him able to dispense with their fulfilment."

Brett J. said (at p 639):

"If they are conditions precedent to the jurisdiction of the Court to hear the appeal, it is clear that they cannot be waived; but if they are mere matters of procedure, and enacted entirely for the benefit of the respondent, this being a civil matter, they might be waived."

In Ward v. Raw (1872) LR 15 Eq 83, the defendant appealed against an order made against him but failed to give notice of his appeal within the time required. The parties appeared before a judge to settle a case for the appeal. On appeal, the plaintiff raised a preliminary objection as to the competency of the appeal. Sir Richard Malins V.C. said (at p 85):

"Nothing is more clear to my mind than that the parties, by consenting to have the case settled and signed, have waived the objection as to time."

In Ex parte Moore; In re Stokoe (1876) 2 Ch D 802, pursuant to s 24 of the Bankruptcy Act 1869 (UK), lessors gave a trustee in liquidation a notice calling on him to disclaim a lease held by the debtor "within the usual time" (that is, 28 days). On the day before the 28 days expired, the lessors wrote to the trustee and asked for a reply to their letter "at (his) earliest convenience". After the 28 days had expired, the trustee applied to the Court for leave to disclaim the lease. The Court of Appeal held that, by asking for a reply "at (his) earliest convenience", the lessors had waived their right to insist on an answer within 28 days. Leave to disclaim was given. However, the case is really one of estoppel as the trustee obviously relied on the statement of the lessors in not answering within 28 days .

In Phillips v. Martin (1890) 11 NSWLR 153, the Full Court of the Supreme Court of New South Wales held that a party may waive a statutory right conferred for his benefit. Phillips lodged an application to bring lands under the Real Property Act 1862 (NSW). Within the proper time, Martin lodged a caveat to this application. Consequently, it became the duty of Phillips to state a case for the opinion and direction of the Supreme Court. Martin also had a duty to apply to the Court within three months for an order to restrain the Registrar-General from proceeding until the further order of the Court. Phillips stated his case, but Martin did not obtain an order against the Registrar-General within the specified period. After the expiration of the three-month period Phillips could have called on Martin to show cause why the caveat should not be removed. Instead, Phillips asked that Martin state a case in support of her caveat. In the case, Martin alleged that the two deeds on which Phillips relied were forgeries. These issues were tried before a jury which found the deeds were forgeries. Phillips then applied to the Full Court and subsequently to the Privy Council for a new trial but his applications failed. He then brought a summons for an order that the caveat be removed on the ground that Martin had failed to take action against the Registrar-General as required by the Act. Darley C.J. said (at p 158):

"Here there is abundant evidence of waiver, and it is quite clear that a man may by his conduct waive a provision of an Act of Parliament intended for his benefit. The caveator was not brought into Court in any way until the caveat had lapsed. And now the applicant, after all these proceedings have been taken by him, after, doubtless, much expense has been incurred on the part of the caveator, and after lying by and hoping to get a judgment of the Court in his favour - asks the Court to do that which but for some reasons known to himself he might have asked the Court to do before any other step in the proceedings had been taken. I think he is altogether too late. It is to my mind a clear principle of equity, and I have no doubt there are abundant authorities on the point, that equity will interfere to prevent the machinery of an Act of Parliament being used by a person to defeat equities which he has himself raised, and to get rid of a waiver created by his own acts."

The judgment of the Chief Justice seems to be based on some form of equitable estoppel. His Honour said (at p 157) "we are now sitting as a Court of equity". Innes J. and Foster J. in their judgments referred to Phillips as being "estopped" from taking the point.

Phillips v. Martin was approved by the Judicial Committee in Wilson v. McIntosh (1894) AC 129 upon which counsel for the plaintiff in the present case placed much reliance. There the appellant had lodged a caveat against land being brought under the provisions of the Real Property Act 1862 (NSW). More than three months after the lodging of the caveat, the respondent stated and filed a case for the opinion and direction of the Supreme Court. Later, the respondent applied for and obtained an order directing the appellant to state and file a case on her behalf. The appellant did so. No steps were taken by the respondent to obtain the decision of the Court on the questions raised between the parties. Over two years later, however, the respondent sought to have the appellant's caveat removed on the basis that she had failed to take any proceedings within three months of filing of the caveat as required by the Act and that the caveat had consequently lapsed. The Judicial Committee held that, by requiring the appellant to state her case, the respondent had waived his right to rely on the three-month limitation period. After citing the observations of Darley C.J. in Phillips v. Martin, the Judicial Committee said that they agreed with them and thought they applied to the instant case. Their Lordships went on to say (at pp 134-135):

"The respondent in the present case invoked the jurisdiction of the Court to compel the appellant to state her case, and the appellant did so, and no doubt incurred costs in doing so, and all the risk involved in shewing her title. If it be once admitted that an applicant may waive the lapse, it is a question of fact on the circumstances of each case whether there has been a waiver or not."

In Toronto Corporation v. Russell (1908) AC 493, a plot of land owned by the plaintiff, an alderman of the Toronto Council, was advertised by the Council for sale for arrears of taxes. After an adjournment of the sale, the land was bought by the Council. The Council, during the adjournment, had advertised its intention to purchase the land if the amount bid was less than the arrears due but it omitted to give the plaintiff a notice in writing to this effect as required by legislation. Some years later, the plaintiff brought an action to set aside the sale on the ground, among others, that he had not received the notice. However, on the day before the land had been advertised for sale, the plaintiff, in his capacity as an alderman, had attended a meeting of the Council in which it was decided that, if the land was not sold for the arrears owing, it would be purchased by the Council at a later sale. The Judicial Committee said (at p 501):

"There is no evidence to shew that the plaintiff, up to a short time before bringing this action, ever complained that he had not received the notice which his counsel now insist was a condition precedent to a valid sale, or that the sale was invalid for any reason. On the contrary, he treated the sale as valid, but mistook the effect of it on his right to redeem. Their Lordships think that, in the absence of all explanation by the plaintiff other than that given in his evidence on discovery, the legitimate inference to be drawn is that he consented to dispense with this notice - that is, he waived it."

The basis of this decision seems to be that, at the meeting when it was decided that the Council would purchase the land if necessary, the plaintiff "had himself joined in" in conferring the power on the Council (at p 499). Accordingly, he waived his right to prior notice of the sale.

In Evans Pty. Ltd. v. Hawthorn (1967) VR 212, the Full Court of the Supreme Court of Victoria held that a municipality had waived its right to object that a notice of intention to appeal, given by an aggrieved ratepayer, was not in accordance with a section of the Local Government Act 1958 (Vict.). The Full Court said (at p 218) that the requirement of notice was intended to ensure that the municipality should not be taken by surprise. It was open to the municipality, however, to elect to proceed without the information which the notice must give .

In Bock v. Don-Rex Furniture (Qld) (1981) Qd R 326, relying on Wilson, Sheahan J. held that the Workers' Compensation Board had waived its right to insist on strict compliance by the plaintiff with a section of the Workers' Compensation Act 1916 (Q.). However, his Honour expressly found that the plaintiff suffered detriment which was a finding unnecessary to support a claim of waiver but essential to support a claim of estoppel .

The principle that statutory conditions enacted solely for the benefit of individuals and not for the public can be waived has also been recognised in this Court on a number of occasions: see Sandringham Corporation v. Rayment (1928) 26 CLR 348 , at p 365; Brown v. The Queen (1986) 160 CLR 171 , at pp 178, 208. In each of those cases, however, the defence of waiver failed on the facts or because the right was one enacted for the benefit of the public and not for the benefit of individuals.

In my opinion, the cases to which I have referred do not establish any principle which supports the claim of waiver in the present case. Ex parte Moore and Bock, and perhaps Phillips v. Martin and Wilson v. McIntosh, are really cases of estoppel. Indeed, in Kammins Co. v. Zenith Investments Lord Diplock thought that all cases of the type to which I have referred were better categorised as estoppel cases. His Lordship said (at pp 882-883):

"'Waiver' is a word which is sometimes used loosely to describe a number of different legal grounds on which a person may be debarred from asserting a substantive right which he once possessed or from raising a particular defence to a claim against him which would otherwise be available to him. We are not concerned in the instant appeal with the first type of waiver. This arises in a situation where a person is entitled to alternative rights inconsistent with one another. If he has knowledge of the facts which give rise in law to these alternative rights and acts in a manner which is consistent only with his having chosen to rely on one of them, the law holds him to his choice even though he was unaware that this would be the legal consequence of what he did. He is sometimes said to have 'waived' the alternative right, as for instance a right to forfeit a lease or to rescind a contract of sale for wrongful repudiation or breach of condition; but this is better categorised as 'election' rather than as 'waiver'. It was this type of 'waiver' that Parker J. was discussing in Matthews v. Smallwood (1910) 1 Ch 777.

The second type of waiver which debars a person from raising a particular defence to a claim against him, arises when he either agrees with the claimant not to raise that particular defence or so conducts himself as to be estopped from raising it. This is the type of waiver which constitutes the exception to a prohibition such as that imposed by Landlord and Tenant Act, 1954, and other statutes of limitation. The ordinary principles of estoppel apply to it."

Some of the cases which debar "a person from raising a particular defence to a claim against him", however, stand outside the categories of election, contract and estoppel. They are sui generis. They are cases where a statute has conferred a right on A, subject to the fulfilment of a condition for the benefit of B, and B has waived the condition by taking the next step in the course of procedure without insisting on A fulfilling the condition. In my opinion, the true basis of the decisions in these cases is that, where the existence of a statutory right depends upon the fulfilment of a condition precedent, a person entitled to insist on the fulfilment of that condition may dispense with its compliance unless it is enacted for the benefit of the public, and that person will be held to have waived compliance with the condition if he or she knowingly takes or acquiesces in the taking of a subsequent step in the course of procedure laid down by the statute after the time for the other person to fulfil the condition has passed. These cases are also, to a certain extent, anomalous. They should be strictly confined so as not to conflict with the more established doctrines of election, contract and estoppel.

The present case, however, is far removed in nature and principle from the various cases which have given effect to the principle of waiving a statutory condition. Section 5 is not a condition precedent to the obtaining or maintaining of a statutory right by the plaintiff. Nor is the common law right of the plaintiff to sue the Commonwealth subject to the statutory condition that he commence his action within the period set by s 5 of the Limitation Act. There is, of course, a fundamental difference between a true statute of limitation, such as s 5, which bars stale claims and a limitation period annexed by a statute to a right which it creates. In the latter class of case, the limitation period will generally be of the essence of the right: see Australian Iron and Steel Ltd. v. Hoogland (1962) 108 CLR 471 at pp 488-489. It is not a condition precedent to the right but part of it. However, neither is a true statute of limitation a condition precedent to the right which it bars. It is a plea in confession and avoidance of that right and not a condition precedent to its exercise. Accordingly, the plaintiff's common law right to bring the present action was not subject to any condition precedent that it be exercised within the period specified by s 5 of the Limitation Act.

The deliberate act of the Commonwealth in not raising the Limitation Act or, if it matters, renouncing the defence based on that Act is not enough to attract the principle of waiver enshrined in the cases to which I have referred. That principle has nothing to say about a case where a party has done no more than consciously refuse to plead a defence or a cause of action. If, having decided not to plead a cause of action or defence, a party then seeks to amend his or her pleading before verdict, the right to amend will be governed by the principles expounded in such cases as Leotta v. Public Transport Commission (NSW) (1976) 50 ALJR 666; 9 ALR 437 and Ketteman v. Hansel Properties (1987) AC 189. If the party seeks to raise the defence or cause of action after verdict, the right to amend will be governed by the principles expounded in cases such as Suttor v. Gundowda Pty. Ltd. (1950) 81 CLR 418 and Coulton v. Holcombe (1986) 162 CLR 1 . In neither case, however, will the deliberate decision not to raise the point by itself be a fatal bar to the grant of a subsequent amendment or the right to raise the defence or cause of action, and this will be so even if the party seeking to amend had previously announced his or her intention not to raise the point. In Adams v. Chas. S. Watson Pty. Ltd. (1938) 60 CLR 545 , this Court allowed a party to an appeal to raise a point which he had expressly conceded in the court below. Latham C.J. said, at p 548:

"The court is of the opinion that the objection should be overruled. It is entirely a question of law. I refer to George Hudson Ltd. v. Australian Timber Workers' Union ((1923) 32 CLR 413 , at p 426), per Isaacs J., where he says: 'In Ex parte Markham ((1869) 34 JP 150) the Court of Queen's Bench (Cockburn, C.J. and Blackburn, Mellor and Lush JJ.) held that a fatal objection in law may be taken in the appellate court, though not noticed before the justices, the condition being that it could not be cured by further evidence.' The principles there expressed by Isaacs J. appear to apply completely to this case. As Mr Ashkanasy has said, it is a matter which may be taken into account in considering the question of costs, but that will depend upon the view which the court takes of the whole matter."

In Lang v. Australian Consolidated Press Ltd. (1970) 2 NSWR 408, the Court of Appeal of New South Wales held that a trial judge erred in leaving a defamatory imputation to the jury even though counsel for the defendant had conceded at the trial that the imputation was open to the jury to find. This Court refused special leave to appeal against the order of the Court of Appeal: (1970) 124 CLR 681 .

Adams and Lang decide, therefore, that after verdict a party may raise a point that he has conceded in the court below. They deal with the conscious decision of counsel not to raise a point of law. It is difficult to see how they can be reconciled with the claim of "waiver" in the present case.

In the present case, the Supreme Court allowed the Commonwealth to amend its defence to plead the Limitation Act defence notwithstanding previous statements made on its behalf to the effect that the defence would not be pleaded. The facts relied on by the plaintiff in his reply of "waiver" provided no answer in point of law to that defence once it was raised. Consequently, the Supreme Court was correct in holding that the reply of "waiver" was no answer to the defence based on Limitation Act.

It necessarily follows from these reasons that the reply of "waiver" was also no answer to the defence based on "no duty of care".

Estoppel

The alternative ground upon which the plaintiff relied was that of estoppel. His counsel contended that common law and equitable estoppel are now unified. Reliance was placed on what was said by Mason C.J. in Foran v. Wight (1989) 64 ALJR 1 at p 12; 88 ALR 413 at p 430. See also Deane J. in Waltons, at pp 451-452. However, it is unnecessary to decide that point in this case: I do not think that the doctrine of common law estoppel advances the plaintiff's case any further than does the doctrine of equitable estoppel. Both common law and equity applied the principle of estoppel in pais. They both held that, if a person made a false representation to another about a past or present fact and the representee acted upon it, the representor was not allowed to assert the untruth of that representation: Jorden v. Money (1854) 5 HLC 185 at p 210 (10 ER 868 at p 880); Waltons, at pp 447-448. Accordingly, so far as any representation by the Commonwealth as to present or past facts is concerned, the common law doctrine of estoppel does not advance the plaintiff's case any further than the equitable doctrine does. But more importantly, in the present state of authority, the common law doctrine of estoppel does not, but the equitable doctrine of promissory estoppel does, extend to representations or assumptions concerning the future: Legione v. Hateley (1983) 152 CLR 406 at pp 432-435; Waltons at pp 398-399, 459. Hence any representations or assumptions concerning the future can be dealt with, and on the traditional view can be dealt with only, by equitable estoppel. Even if "there is no acceptable reason why the doctrine of promissory estoppel should be seen, in a fused system, as exclusively equitable", as Deane J. asserted in Waltons (at p 448), the equitable rules must prevail over the common law rules "concerning the same matter": Supreme Court Act 1986 (Vict.), s 29.

One important difference between the common law doctrine of estoppel in pais and the equitable doctrines of promissory and proprietary estoppel is that the common law doctrine is concerned with the rules of evidence, notwithstanding that a common law claim of estoppel must be pleaded, while the equitable doctrines are concerned with the creation of new rights between the parties. The common law will not permit "an unjust departure by a party from an assumption of fact which he has caused another party to adopt or accept for the purpose of their legal relations": Grundt v. Great Boulder Pty. Gold Mines Ltd. (1937) 59 CLR 641 at p 674. In so far as the assumed fact gives rise to a cause of action or alters the legal relationship between the parties, it does so because of the operation of the general law on the assumed fact either alone or in conjunction with other facts. Equity, like the common law, also will not permit an unjust departure from an assumption of fact which one person has caused another to adopt or accept for the purpose of their legal relations: Thompson v. Palmer (1933) 49 CLR 507 at p 547. But the equitable doctrines of estoppel create rights. They give rise to equities which are enforceable against the party estopped. The equitable doctrines result in new rights between the parties when it is unconscionable for a party to insist on his or her strict legal rights. It will be unconscionable for a party to insist on his or her strict legal rights if that party has induced the other party to assume that a different legal relationship exists or will exist between them, if he or she knew that the other party would act or refrain from acting on that assumption and if, as a result, the other party will suffer detriment unless the assumption is maintained. Hence, to avoid detriment to the party who has been induced to act or refrain from acting on that assumption, equity will require the parties to act on the basis of the relationship assumed by the innocent party until the detriment is removed or the innocent party otherwise compensated. The equitable right of the innocent party will take precedence over the strict legal rights of the party estopped. And because the doctrines of promissory and proprietary estoppel create equitable rights, they operate differently from the common law doctrine of estoppel in pais. The purpose of both the common law and equitable doctrines is "to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting": Grundt at p 674. But because the common law doctrine of estoppel in pais is a rule of evidence, it operates to preclude the party estopped from denying the assumption of fact whenever it is necessary to do so for the purpose of determining the rights of the parties. On the other hand, because the equitable doctrines create rights, they preclude the party estopped from denying the assumption of fact (or law) only as long as the equitable right exists. Once the detriment has ceased or been paid for, there is nothing unconscionable in a party insisting on reverting to his or her former relationship with the other party and enforcing his or her strict legal rights.

What will be required to satisfy the equity which arises against the party estopped depends on the circumstances: Waltons, per Mason C.J. and Wilson J. at p 404. Often the only way to prevent the promisee suffering detriment will be to enforce the promise. But the enforcement of promises is not the object of the doctrine of equitable estoppel. The enforcement of promises is the province of contract. Equitable estoppel is aimed at preventing unconscionable conduct and seeks to prevent detriment to the promisee. As Brennan J. pointed out in Waltons, "in moulding its decree, the court, as a court of conscience, goes no further than is necessary to prevent unconscionable conduct": at p 419. Consequently, a court of equity will only require the promise or assumption to be fulfilled if that is the only way in which the equity can be fulfilled: per Brennan J. at p 416. In Silovi Pty Ltd v. Barbaro (1988) 13 NSWLR 466 at p 472, Priestley J.A, writing for an unanimous Court of Appeal, said: "The remedy granted to satisfy the equity ... will be what is necessary to prevent detriment resulting from the unconscionable conduct."

The claim of estoppel fails

Despite the argument for the plaintiff to the contrary, I do not think that the present case involved any representation as to present or past facts. The Commonwealth did not represent that it had no right to plead the Limitation Act. At its highest what it did on 25 January 1985 and later was to represent that it would not plead the statute as a defence or take any steps in the future to amend its defence. If the plaintiff is to rely on estoppel, he must rely on promissory estoppel. In Waltons, Brennan J. set out (at pp 428-429) the matters which he thought a party must establish to prove a case of promissory estoppel. His Honour said:

"In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs."

For the purposes of the present case, I am content to adopt his Honour's analysis of the elements of equitable estoppel and I shall assume in favour of the plaintiff that the facts of this case establish the first requirement specified by his Honour. But even when that assumption is made in favour of the plaintiff, I do not think that he has made out a case of equitable estoppel.

(i) The "no duty" point

I do not think that it is possible to infer that the plaintiff was induced to continue his action and incur unnecessary costs or that he will otherwise suffer detriment by reason of the promise that the Commonwealth would admit liability. The terms of the statement of claim, which was issued before any assurance by the Commonwealth , and the course of events since the Commonwealth changed its mind suggest that the plaintiff would have commenced and continued his action even if the liability of the Commonwealth had been put in issue from the beginning. Moreover, there is no suggestion that the plaintiff has been prejudiced in the conduct of his case by the change of position on the part of Commonwealth. The claim of estoppel in respect of the defence of "no duty of care" must fail.

(ii) The Limitation Act point

In my opinion, the claim of estoppel in respect of the Limitation Act must also fail. Ordinarily, a statement that a party does not intend to rely on a particular defence will not give rise to an estoppel. One reason is that it is difficult for a party to rely on a voluntary and unilateral promise as giving rise to an estoppel "because the promisee may reasonably be expected to appreciate that he cannot safely rely upon it": Waltons, per Mason C.J. and Wilson J. at p 406. Another reason is that, if the representation is confined to the party's present intention, it cannot found a promissory estoppel unless the representation, expressly or implicitly, also makes it clear that that party does not intend to change his or her mind in the future: cf. Waltons, per Deane J. at p 450. A statement by a party that he or she does not intend to rely upon a particular cause of action or defence cannot be regarded as anything more than a statement of present intention. Pleadings may be amended, with the leave of the court, right up to verdict. Hence, ordinarily a party cannot reasonably rely on a statement that his or her opponent will not be relying on a particular defence or cause of action to found an estoppel. Still less can the filing of statement of claim or statement of defence which omits to raise a particular cause of action or ground of defence give rise to an estoppel. The present case, however, is exceptional. First, the statement was made against the background that, in the action brought by Mr Palmer, the Commonwealth had admitted liability and not sought to rely on the Limitation Act defence. Secondly, the statement of the Commonwealth on 25 January 1985 was made in answer to a request to "waive the Statute". The request was made before the plaintiff commenced his action. Thirdly, the Commonwealth confirmed the statement of 25 January by not pleading the Limitation Act and by not denying negligence. Fourthly, the Commonwealth joined in a number of applications for an expedited hearing of the issues after the defences were not raised. Finally, the Minister Assisting the Minister for Defence wrote to the plaintiff on 27 November 1985 pointing out that the Commonwealth "has admitted negligence and is not pressing the statutory limitation period as a defence". In these circumstances, the inevitable conclusion to be drawn is that, by 27 November 1985 at the latest, the Commonwealth was representing that it had no intention then or in the future of filing defences denying negligence or pleading the Limitation Act.

Accordingly, it is proper to infer that the plaintiff assumed from at least 27 November 1985 that his relationship with the Commonwealth as plaintiff and defendant was one in which no issue arose between them concerning the Limitation Act. I think that it is also proper to infer that the plaintiff continued his action, and incurred a liability for legal costs which he would not otherwise have incurred, because of the assurance which the Commonwealth gave concerning the Limitation Act, and that the Commonwealth knew of these matters. It follows, therefore, that, if the Commonwealth can rely on the Limitation Act to defeat the plaintiff's action, he will suffer detriment .

The plaintiff led no evidence of any particular detriment that he has suffered or will suffer by reason of being induced to alter his position as the result of the conduct of the Commonwealth. The only detriment that one can infer is that of unnecessarily incurring legal costs between the date of the assurance by the Commonwealth that it would not plead the statute and the date when the Commonwealth changed its policy. That detriment to the plaintiff can be avoided by an order for costs. It is possible that the plaintiff has suffered more worry and stress as the result of the assurance of the Commonwealth than he would otherwise have suffered if the Commonwealth had not given the assurance which it did. But the plaintiff led no evidence to this effect, and I do not think that it can be inferred. In any event, even if the plaintiff had sought to make out a case along these lines, his equity would be satisfied by an award of compensation for that additional worry and stress and would not require that the Commonwealth be estopped from relying on the Limitation Act. However, counsel for the plaintiff did not seek to make out any case for compensation on this basis. Nor did he seek an inquiry as to out-of-pocket costs and expenses as suggested by King J. He relied on estoppel as absolutely precluding the Commonwealth from relying on the Limitation Act . But, for the reasons I have given, such a claim cannot succeed. Any equity in favour of the plaintiff arising from the conduct of the Commonwealth can be satisfied by means less drastic than an order precluding the Commonwealth from relying on the Limitation Act.

Order

The appeal should be allowed, the order of the Full Court set aside and the order of O'Bryan J. restored.