E. Waltons Stores (Interstate) Pty. v. Maher: Inching Toward Section 90

• Author: John D. McCamus
• Profession: Professor of Law. Osgoode Hall Law School, York University
• Pages: 289-293

Page 289

Apart from the exceptional case of proprietary estoppel, then, the current Anglo-Canadian position is that promissory estoppel may be deployed only defensively.⁴⁵In the typical case it will enable a person who might otherwise be considered to have breached a contract to rely on the other party’s undertaking that such action or inaction would not constitute a breach. In this respect, then, the Anglo-Canadian estoppel doctrine is radically different from its American counterpart. Section 90 of the Restatement⁴⁶ does provide a foundation for a cause of action to enforce promises and to seek damages or other appropriate remedies for their breach. This limitation on the role of Anglo-Canadian promissory estoppel is a source of criticism. Thus restricted, the doctrine appears to have little if any role outside the context of gratuitous contractual variations. And, indeed, in that context, the doctrine creates an artificial distinction between concessions granted and affirmative promises to provide greater value. As has been explained, only the former can be rendered effectively by the doctrine.⁴⁷Moreover, within the context of concessions, it is not even clearly established that the doc-

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trine will provide a defence in the fact situation illustrated by Foakes v.Beer.⁴⁸By comparison, then, the American doctrine appears to be a much more effective and elegant instrument for providing relief to individuals who have suffered from detrimental reliance on a broken promise that was intended to induce such reliance.

Considerations such as the foregoing may provide a foundation for the development of further exceptions or, indeed, of a more general modification of the sword versus shield doctrine. There is some evidence in the case law to this effect.⁴⁹The important decision of the Australian High Court in Waltons Stores (Interstate) Pty. Ltd. v. Maher⁵⁰ expanded upon the foundations of the proprietary estoppel doctrine to develop a more comprehensive basis for permitting promissory estoppel to serve as a sword and to provide a basis for a cause of action to enforce promises. The fact situation in Waltons provided an appealing context within which to consider such a development. The case involved very substantial detrimental reliance on a promise to enter a lease. Waltons had been negotiating with a view to leasing a property from Maher. Waltons had indicated that its requirements could be met only if the existing building on the premises were demolished and replaced by a new facility. Waltons was aware that if its projected date of occupancy was to be met, Maher would have to commence the demolition work virtually immediately. The parties’ respective solicitors reviewed a draft lease and reached an agreement on a set of amendments. Waltons’ solicitor prepared a fresh lease incorporating the amendments and indicated that although Waltons had not given specific agreement to each amendment, he believed that Waltons’ agreement would be forthcoming and that he would let Maher’s solicitor know of any amendments not agreed to the next day. Maher’s solicitor executed and returned the draft, understanding that no binding contract would be entered into until the lease was executed by Waltons. Hearing nothing further from Waltons, Maher believed that the execution of the lease was a mere formality and proceeded with the demolition work. That work was completed and 40...