Proctor : October 2016
19 PROCTOR | October 2016 confirmed whether Crown had in fact changed its position with respect to the prospect of a renewal of the leases. As to the enforceability of the obligation which may have arisen from the statement, the High Court found difficulty not with the uncertainty of the contractual terms, but rather, the lack of them. The court noted that: “On basic principles, there can be no enforceable agreement to renew a lease, breach of which sounds in damages, unless at least the essential terms of such a lease have been agreed upon.” 9 Finally, on the question of estoppel, the High Court emphasised that in order to ground a claim for estoppel, a representation must be clear, precise and unambiguous. 10 Additionally, the words used must be capable of misleading a reasonable person in the way that the person relying on the estoppel claims to have been misled. Gageler and Gordon JJ dissented, finding that a collateral contract did exist requiring Crown to renew the leases. Lessons from the decision The different outcomes throughout the matter’s litigation history and the dissenting judgments in the High Court demonstrate how difficult it can be to determine when a representation can amount to a contractual promise or form the basis of an estoppel. The decision serves as a timely reminder of the importance of the terms of a written contract when there is one. It is often difficult to prove that the parties intended there to be more to a contract than what is in it if they have gone to the trouble of recording their agreement in writing. Some other general points that emerge from the High Court’s reasoning are that: • A statement must be promissory to have contractual force. • To form part of a contract, the parties must have (objectively) intended the representation to be contractually binding. • The essential terms of a contract must be agreed upon before it can be binding. • A representation must be clear, precise and unambiguous in order to found an estoppel. Where a party intends to rely on a promise that is not part of a written contract between the parties, it is highly advisable that it be included in a written contract that has regard to the contract already on foot, prior to any steps being taken on that reliance. Contract law Borcsa Vass is a Brisbane barrister. Notes 1 Despite other assurances having been allegedly made, this was the only assurance found by VCAT to have been proved. See Cosmopolitan Hotel (Vic) Pty Ltd v Crown Melbourne Ltd  VCAT 225 at . 2 Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd  VSC 614 at  per Hargrave J. 3 French CJ, Kiefel, Bell, Keane and Nettle JJ. 4 At . 5 At  per French CJ, Kiefel and Bell JJ and at  per Nettle J citing Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd  VSC 614 at . 6 Cosmopolitan Hotel (Vic) Pty Ltd v Crown Melbourne Ltd (2014) 45 VR 771 at - per Warren CJ,  per Whelan JA and  per Santamaria JA. 7 At . 8 At . 9 At  per French CJ, Kiefel and Bell JJ. 10 At  per French CJ, Kiefel and Bell JJ and at  per Keane J.