Proctor : October 2016
17 PROCTOR | October 2016 High Court revisits promissory statements, collateral contracts and estoppel On 20 July 2016, a majority of the High Court allowed the appeal in Crown Melbourne Limited v Cosmopolitan Hotel (Vic) Pty Ltd & Anor  HCA 26. The court found that there was no collateral contract or estoppel requiring Crown Melbourne Limited (Crown) to renew the leases of two tenants, Cosmopolitan Hotel (Vic) Pty Ltd and Fish and Company (Vic) Pty Ltd (the tenants), in the Crown casino complex in Melbourne. Background The tenants operated restaurants in the complex and had entered into five-year leases in 2005. The leases contained no option to renew but required the tenants to undertake significant refurbishment works at the commencement of the term. Those refurbishments ultimately cost the tenants $1.8 million and $2.85 million, respectively. The tenants proceeded with the refurbishments based on the assumption that a further term of at least five years would be granted. The assumption was based on a statement by Crown that, if they undertook the refurbishments, they would be “looked after at renewal time”. 1 When Crown delivered notices to vacate towards the end of the five-year leases, the tenants brought proceedings in the Victorian Civil and Administrative Tribunal (VCAT) arguing that they were entitled to a renewal of their leases based on a collateral contract or estoppel. Contract law Crown Melbourne Limited v Cosmopolitan Hotel (Vic) Pty Ltd & Anor  HCA 26 The High Court’s decision on this dispute reminds all practitioners that once a written contract is agreed, it is unlikely that any other promises will be enforceable. Report by Borcsa Vass.