Bushby v Dixon Holmes du Pont Pty Ltd

Supreme Court of NSW|2010-03-10|Before: Rein J, Bruce J, Street CJ, Holland J

CITATION : Bushby v Dixon Holmes du Pont Pty Ltd [2010] NSWSC 234 This decision has been amended. Please see the end of the judgment for a list of the amendments.

DECISION : 1. Summons dismissed. 2. Plaintiff to pay the defendant's costs of the Summons.

CATCHWORDS : PROCEDURE - inferior courts - New South Wales - District Court - removal into Supreme Court - PROCEDURE - miscellaneous procedural matters - declarations - appropriate form of relief: discretion of court - futility of declaration - ESTOPPEL - promissory estoppel - whether promissory estoppel can be pleaded as an equitable defence as well as an equitable claim - whether District Court has jurisdiction to deal with promissory estoppel as an equitable defence - PROCEDURE - whether proceedings should be transferred to the Supreme Court pursuant to Civil Procedure Act s 140 due to the absence of injunctive relief for promissory estoppel, having regard to various factors relating to the utility of the claim, the availability of other remedies and relief under the Fair Trading Act and other claims, and the availability of transfer to the Supreme Court (and re-transfer to the District Court) under Civil Procedure Act s 144

Civil Procedure Act 2005 (NSW) County Courts Act 1959 (7 & 8 Eliz 2 c 22) District Court Act 1973 (NSW) LEGISLATION CITED : Fair Trading Act 1987 (NSW) Law Reform (Law and Equity) Act 1972 (NSW) Supreme Court Act 1970 (NSW) Supreme Court of Judicature Act 1873 (37 & 37 Vict c 66) Trade Practices Act 1974 (Cth)

Attorney-General v Australian Softwood Forests Pty Ltd [1979] 2 NSWLR 73 Batley v Local Court of New South Wales (unreported, Supreme Court of New South Wales, Bruce J, 4 February 1998) Central London Property Trust Ltd v High Trees House Ltd [1947] 1 KB 130 General Mutual Insurance Co Ltd v Forbes (unreported, Supreme Court of New South Wales, Street CJ in Eq, 24 April 1974) Hughes v The Metropolitan Railway Company (1876) 1 CPD 120 Kingswood Estate Co Ltd v Anderson [1963] 2 QB 169 Moriatic Pty Limited v Gordon [2007] NSWSC 5 CASES CITED : Pelechowski v The Registrar, Court of Appeal (NSW) (1999) 198 CLR 435 Taylor Farms (Aust) Pty Ltd v A Calkos Pty Ltd [1999] NSWSC 186 United Telecasters Sydney Ltd v Hardy (1991) 23 NSWLR 323 W K Robertson & Associated Pty Ltd v Suttons Motors (Homebush) Pty Ltd (unreported, Supreme Court of New South Wales, Holland J, 9 August 1975) Walsh v Lonsdale (1882) 21 Ch D 9 Waltons Stores (Interstate) v Maher (1988) 164 CLR 387 Wilson v Interhealth Energies Pty Ltd [2008] NSWSC 1137 Yahl v Bridgeport Customs (unreported, Supreme Court of New South Wales, Allen M J, 31 July 1984)

K R Handley, Estoppel by Conduct and Election (2006), Sweet & Maxwell, London TEXTS CITED : R P Meagher, W M C Gummow and J R F Lehane, Equity Doctrines and Remedies (2nd ed, 1984), Butterworths, Sydney R P Meagher, W M C Gummow and J R F Lehane, Equity Doctrines and Remedies (4th ed, 2002), Butterworths, Sydney P W Young, Declaratory Orders (2nd ed, 1984), Butterworths, Sydney

PARTIES : Phillip Andrew Bushby (Plaintiff) Dixon Holmes du Pont Pty Limited (Defendant)

COUNSEL : A J Grant (Plaintiff) M W Young (Defendant)

SOLICITORS : Holman Webb Lawyers (Plaintiff) Dixon Holmes du Pont Lawyers (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

Date of Hearing: 10 March 2010 Date of Judgment: 26 March 2010

2009/291770 Phillip Andrew Bushby v Dixon Holmes du Pont Pty Limited

JUDGMENT 1 REIN J: The plaintiff, Mr Bushby, seeks an order for the transfer to this Court of proceedings no. 5405 of 2009 in the District Court of New South Wales, in which he is the defendant and Dixon Holmes du Pont Pty Limited ("Dixon") is the plaintiff. Background

2 Dixon is the lessee of business premises known as Level 13, 99 Elizabeth Street, Sydney. Mr Bushby is a solicitor who entered into a licence agreement with Dixon to license a room on Level 13 ("the premises"). The licence was to last five years, at an agreed licence fee per week. 3 There is no dispute that in November 2009, Mr Bushby left the premises. Dixon claims that Mr Bushby's departure amounted to a repudiation of the licence agreement, which repudiation it accepted. Dixon's claim is for the balance of the licence fee until the room is re-licensed. If it is not re-licensed, Dixon's claim will be for approximately $109,000. 4 Mr Bushby claims that he vacated the premises pursuant to an agreement by which, in return for him forfeiting a bond that he had previously paid to Dixon and foregoing a claim in respect of his entry into the licence agreement, Dixon would accept that the licence agreement was at an end. Mr Bushby claims that Dixon made representations to him about the air conditioning and the elevators, which representations induced him to enter into the licence agreement and which he says were misrepresentations resulting in liability of Dixon under the Trade Practices Act 1974 (Cth). 5 The claims which Mr Bushby wishes to advance are found in a Defence and Cross-Claim prepared on his behalf, both of which have been verified. They have not as yet been filed in the District Court, but a copy of each document is annexed to the affidavit of Mr Bushby's solicitor, Mr D'Arcy Anthony Kelly, dated 22 February 2010. 6 There is no dispute that much of what is raised falls within the jurisdiction of the District Court, but Mr A J Grant of counsel, who appears for Mr Bushby, identified aspects of the Cross-Claim as matters in respect of which the District Court does not have jurisdiction. I set out these matters below. Relevant Legislation 7 The following legislative provisions were drawn to the Court's attention:

Civil Procedure Act 2005 (NSW) " 140 (1) The Supreme Court may, of its own motion or on application by a party to proceedings before the District Court or the Local Court, order that the proceedings, including any cross-claim in the proceedings, be transferred to the Supreme Court. (2) The District Court may, of its own motion or on application by a party to proceedings before the Local Court, order that the proceedings, including any cross-claim in the proceedings, be transferred to the District Court. (3) Proceedings in the District Court on a claim for damages arising from personal injury or death are not to be transferred to the Supreme Court under this section unless the Supreme Court is satisfied: (a) in the case of a motor accident claim or a workplace injury damages claim: (i) that the amount to be awarded to the plaintiff, if successful, is likely to be more than $1,000,000, and (ii) that the case involves complex legal issues or issues of general public importance, or (b) in any other case: (i) that the amount to be awarded to the plaintiff, if successful, is likely to exceed the jurisdictional limit of the District Court, or (ii) that there is other sufficient reason for hearing the proceedings in the Supreme Court. (4) Proceedings in the Local Court are not to be transferred to a higher court under this section unless the higher court is satisfied that there is sufficient reason for hearing the proceedings in the higher court. (5) This section extends to proceedings that have been transferred to the District Court or the Local Court pursuant to a previous transfer order under this Division or under Division 2 or 3." District Court Act 1973 (NSW) (" the DCA ") " 44 (1) Subject to this Act, the Court has jurisdiction to hear and dispose of the following actions: (a) any action of a kind: (i) which, if brought in the Supreme Court, would be assigned to the Common Law Division of that Court, and (ii) in which the amount (if any) claimed does not exceed the Court's jurisdictional limit, whether on a balance of account or after an admitted set-off or otherwise, other than an action referred to in paragraph (d) or (e), (b) (Repealed) (c) any action brought to recover an amount not exceeding $20,000, which is the whole or part of the unliquidated balance of a partnership account, or the amount or part of the amount of the distributive share under an intestacy or of a legacy under a will, (d) any motor accident claim, irrespective of the amount claimed, (d1) any work injury damages claim, irrespective of the amount claimed, (e) any proceedings transferred to the Court under section 146 (1) of the Civil Procedure Act 2005 , irrespective of the amount (if any) claimed in those proceedings.

46 (1) Without affecting the generality of Division 8, the Court shall, in any action, have power to grant any injunction (whether interlocutory or otherwise) which the Supreme Court might have granted if the action were proceedings in the Supreme Court. (2) In relation to the power of the Court to grant an injunction under this section: (a) the Court and the Judges shall, in addition to the powers and authority otherwise conferred on it and them, have all the powers and authority of the Supreme Court and the Judges thereof in the like circumstances, 134 (1) The Court shall have the same jurisdiction as the Supreme Court, and may exercise all the powers and authority of the Supreme Court, in proceedings for: (b) the specific performance, rectification, delivery up or cancellation of any agreement for: (i) the sale or purchase of any property at a price not exceeding $20,000, or (ii) the lease of any property the value of which does not exceed $20,000, as determined by the Court, (h) any equitable claim or demand for recovery of money or damages, whether liquidated or unliquidated (not being a claim or demand of a kind to which any other paragraph of this subsection applies), in an amount not exceeding the Court's jurisdictional limit." Supreme Court Act 1970 (NSW) (" the SCA ") " 68 Where the Court has power: (a) to grant an injunction against the breach of any covenant, contract or agreement, or against the commission or continuance of any wrongful act, or (b) to order the specific performance of any covenant, contract or agreement, the Court may award damages to the party injured either in addition to or in substitution for the injunction or specific performance." Law Reform (Law and Equity) Act 1972 (NSW) (" the Law Reform Act ") " 5 In all matters in which there was immediately before the commencement of this Act or is any conflict or variance between the rules of equity and the rules of common law relating to the same matter, the rules of equity shall prevail. 6 Every inferior court shall in every proceeding before it give such and the like effect to every ground of defence, equitable or legal, in as full and ample a manner as might and ought to be done in the like case by the Supreme Court under the Supreme Court Act 1970 . 7 This Act does not enlarge the jurisdiction of any court as regards the nature or extent of the relief available in that court, but any court may, for the purpose of giving effect to sections 5 and 6, postpone the grant of any relief, or grant relief subject to such terms and conditions as the nature of the case requires."

8 The Defence upon which Mr Bushby relies is that: (1) the written licence agreement was varied and/or discharged; (2) there was accord and satisfaction of the claims brought by Dixon by which its claims were discharged; (3) Dixon "has released the defendant from those claims in equity"; and (4) Mr Bushby acted in reliance on the representations (that is, that in return for forfeiture of the bond and his agreement not to claim in respect of alleged misrepresentations concerning the air conditioning and elevators, the licence agreement would be terminated) and Dixon is estopped from resiling from the representations. 9 By his Cross-Claim, Mr Bushby raises the following matters (continuing the numbering from above): (5) that Dixon made representations about the services to the building, which representations constituted misleading and deceptive conduct within the meaning of s 52 of the Trade Practices Act and s 42 of the Fair Trading Act 1987 (NSW) and caused Mr Bushby loss and damage; (6) that Dixon represented that if Mr Bushby forfeited the security bond, the licence agreement would be terminated on 30 November 2009 without further liability to him; that he acted in reliance on the representation in entering into a new lease of other premises; and that Dixon's resiling from the representation constituted conduct that was in all the circumstances "unconscionable in contravention of s 51AC of the Trade Practices Act ", as a result of which he suffered loss and damage, namely: "(a) Licence fees and other money due by the Cross-Claimant to the First Cross-Defendant under the Licence Agreement for the balance of its term to 30 November 2010 (b) Legal costs and disbursements in connection with these proceedings (c) Moving, stationery and other administrative expenses" ; and (7) a claim of equitable promissory estoppel; Mr Bushby alleges that: (a) Dixon represented that if he agreed to forfeit the security bond, the licence agreement would terminate on 30 November 2009 without further liability on his part; (b) Dixon induced him to adopt this assumption or expectation; (c) as a result he forfeited the bond, entered into a new lease of premises elsewhere, and forebore from suit; (d) Dixon knew or intended that he would do so; (e) he will suffer detriment if the assumption referred to above is not fulfilled; and (f) Dixon has failed to act to avoid that detriment. These are the elements of promissory estoppel enunciated by Brennan J (as his Honour then was) in Waltons Stores (Interstate) v Maher (1988) 164 CLR 387 at 428-429. 10 Mr Bushby has joined Mr Donald Martin Junn, a director of Dixon, as a party to the Cross-Claim, it being alleged that Mr Junn was a person involved in the contravention by Dixon and, it is alleged, the person who made the representations relied upon by Mr Bushby.

11 The claims which Mr Bushby says are outside the jurisdiction of the District Court are: (1) a declaration that the licence agreement was terminated and discharged on 30 November 2009; (2) a declaration that Mr Bushby has no further liability under or in connection with the licence agreement; (3) an order that Dixon is restrained from enforcing its alleged right under or in connection with the licence agreement; (4) equitable compensation; and (5) equitable damages pursuant to s 68 of the SCA . 12 Mr Grant submitted that all of these remedies are available to Mr Bushby, and that since the District Court has no power to deal with them, Mr Bushby is entitled to the order for transfer. 13 Mr M W Young of counsel, for Dixon, resisted the application. In essence, he submitted that Mr Bushby's seeking of declarations and reliance on promissory estoppel as a claim are unnecessary and are a contrivance to force transfer of the proceedings, and that Mr Bushby should not be permitted to enliven this Court's jurisdiction by pleading matters that do not need to be pleaded and seeking relief that does not need to be sought, making what is a simple case which largely revolves around what was said into something far more complex and expensive. 14 The District Court is a court of record created by the DCA. Apart from implied powers necessary to control its own processes, its only powers are those bestowed upon it by legislation: see Pelechowski v The Registrar, Court of Appeal (NSW) (1999) 198 CLR 435 and United Telecasters Sydney Ltd v Hardy (1991) 23 NSWLR 323 at 332-333 per Samuels AP (with whom Clarke and Meagher JJA agreed). The District Court has no power to grant declaratory relief. Its power to grant injunctive relief is found in s 46 and s 140 of the DCA. Section 140, it was agreed, is not relevant, as it deals with the power to grant temporary injunctions. 15 Mr Grant argued that s 46 is not relevant here because: (1) the power to grant an injunction there bestowed is only in "any action"; (2) the only action which the District Court is given power to hear is an action of a kind "which if brought in the Supreme Court would be assigned to the Common Law Division of that Court" (s 44(1)(a)(i)); and (3) a claim of the kind which Mr Bushby wishes to bring is not a claim that would have been assigned to the Common Law Division. 16 Dixon's claim is a claim for damages for breach of contract. It would be characterised as one which would be assigned to the Common Law Division if proceedings had been commenced in this Court. I have some doubt as to whether, if Mr Bushby had commenced the proceedings in this Court, the case would have been assigned to the Common Law Division. Had the proceedings been commenced in the Equity Division, I strongly doubt that they would have been transferred to the Common Law Division. I proceed on the basis that the claim that Mr Bushby wishes to bring does not fall within s 44 of the DCA, and hence that s 46 does not bestow on the District Court the power to grant an injunction. 17 Mr Grant argued that s 134(1)(h) of the DCA does not give the District Court jurisdiction because it is limited to proceedings for "any equitable claim or demand for recovery of money or damages", and he submitted that a claim for promissory estoppel is not an equitable claim or demand for recovery of money or damages, but rather it is a claim for injunctive relief with the possibility of equitable damages in lieu. 18 Mr Bushby's argument was based on the following propositions: (1) Although there are cases which have held that promissory estoppel is an equitable defence to which effect should be given by s 6 of the Law Reform Act (see Yahl v Bridgeport Customs (unreported, Supreme Court of New South Wales, Allen M J, 31 July 1984); Batley v Local Court of New South Wales (unreported, Supreme Court of New South Wales, Bruce J, 4 February 1998)), these cases were based on an outmoded view of promissory estoppel as a shield not a sword, a view rejected by modern Australian authority: see Waltons Stores ; (2) The view that promissory estoppel does not fall within of s 6 of the Law Reform Act has been adopted by Kirby J in Taylor Farms (Aust) Pty Ltd v A Calkos Pty Ltd [1999] NSWSC 186 and followed with approval by Adams J in Wilson v Interhealth Energies Pty Ltd [2008] NSWSC 1137; and (3) The true nature of promissory estoppel is as described by the Honourable Mr K R Handley AO QC (a Judge of Appeal of the Supreme Court of New South Wales for many years and now an Acting Judge of Appeal), the learned author of Estoppel by Conduct and Election (2006), Sweet & Maxwell, London at [13-007] p 202: "A promissory estoppel therefore is an equitable cause of action which entitles the promisee to an injunction to restrain enforcement of the right with the possibility of an award of equitable compensation or damages under Lord Cairns Act. It can also be a defence to proceedings in a Court of Equity to enforce an equitable right, or for equitable relief in aid of a legal right." At [17-008] p 308, Mr Handley writes: "A defendant who wishes to assert a promissory or proprietary estoppel will be relying, as we have seen, on an equitable cause of action which should be asserted by counter-claim." (4) Thus Mr Bushby cannot bring a claim for promissory estoppel in the District Court, because he cannot seek injunctive relief in that Court. 19 In Taylor Farms, Kirby J held that the Commercial Tribunal had no jurisdiction to hear a claim for promissory estoppel. In Wilson, Adams J followed Taylor Farms, held that the District Court had no jurisdiction to deal with a claim of promissory estoppel, and ordered the transfer of proceedings from the District Court to the Supreme Court. In Taylor Farms, the legislation establishing the Commercial Tribunal had no equivalent to s 134(1)(h) of the DCA. 20 I deal now with the matters referred to in [11] above.

21 It is clear that the District Court has no power to grant declaratory relief. However, I do not think that there is any scope for declaratory relief in this case. Mr Grant appeared to accept this. Dixon seeks to recover damages for breach of contract. If Mr Bushby's contentions are upheld, then Dixon will have no entitlement to damages and will fail in its claim. If Mr Bushby's contentions are rejected, then there will be found to have been no agreement to bring the licence agreement to an end. There is no utility or purpose in granting declaratory relief prefatory to dealing with the substantive matter in this type of case. An example of this approach can be seen in Attorney-General v Australian Softwood Forests Pty Ltd [1979] 2 NSWLR 73 at 76; and see also P W Young, Declaratory Orders (2nd ed, 1984), Butterworths, Sydney at [704] p 62 and the cases there cited (General Mutual Insurance Co Ltd v Forbes (Street CJ in Eq, 24 April 1974) and W K Robertson & Associated Pty Ltd v Suttons Motors (Homebush) Pty Ltd (Holland J, 9 August 1975)). Restraint (Head 3), Equitable Compensation (Head 4) and Equitable Damages (Head 5)

22 Mr Grant explained that the claim for equitable compensation relates solely to the settlement agreement. If Mr Handley is correct in his characterisation of promissory estoppel as an equitable claim, then the claim based on promissory estoppel brought by Mr Bushby is an equitable claim and under s 134(1)(h) of the DCA, the District Court has "the same jurisdiction as the Supreme Court, and may exercise all the powers and authority of the Supreme Court" in proceedings for that equitable claim. This means that the District Court has the same power to grant damages as the Supreme Court has. 23 I accept that s 134(1)(h) restricts the type of equitable claims for which jurisdiction is given. It does not include claims for an injunction, so that although damages can be given in lieu where an injunction is available by virtue of s 68 of the SCA (often referred to as Lord Cairns' Act damages), it would appear that damages are not available under s 134(1)(h). If the claim does not fall within s 134(1)(h), then the extension of power granted by the introductory words of s 134(1) does not apply. 24 In Wilson, Adams J held that s 134(1)(h) did not apply to a claim of equitable estoppel because the defendant's allegation was an allegation that the plaintiff could not make a claim on him (see [6]), which I take to mean that equitable estoppel was being asserted as a defence, not a claim. Promissory estoppel is a form of equitable estoppel, the other kinds of equitable estoppel being proprietary estoppel by standing by and proprietary estoppel by encouragement: see Handley, op cit at [1-002] p1.

25 It is clear that Kirby J in Taylor Farms did not take the view that promissory estoppel could not be used as a shield (see [84]), but rather his Honour's view was that if the Tribunal did not have the remedy of injunction open to it, this would circumscribe the options available. The Commercial Tribunal did not have jurisdiction to grant an injunction, and neither does the District Court in this context, for the reasons I have given. Kirby J described promissory estoppel as a flexible defence, and he postulated circumstances where a tenant seeks no more than the recognition of the fact that the level of rent for which he is liable is as promised, rather than as set out in the lease (see [83]). His Honour felt that a defendant should not be able to constrain the relief that a court might give by raising it in the inferior tribunal but, with respect, I do not see why it is not open to a defendant to do just that, provided what is advanced and the relief sought fall within the jurisdiction of the relevant tribunal or court. 26 If promissory estoppel is not a defence but is properly characterised as an equitable claim for injunctive relief with the possibility of damages in lieu, as Mr Handley propounds in his book, then it follows that s 6 of the Law Reform Act does not empower the District Court to deal with it as a defence and s 134(1)(h) of the DCA does not empower the District Court to deal with it as an equitable claim because of the unavailability of injunctive relief. 27 I acknowledge the considerable respect due to anything written by Handley AJA (as he is now), but I am disinclined to accept the view that promissory estoppel cannot be pleaded as a defence, and I do so for the following reasons: (1) The debate after Central London Property Trust Ltd v High Trees House Ltd [1947] 1 KB 130 was whether equitable estoppel could be used as a sword as well as a shield: see Waltons Stores at 400 per Mason CJ and Wilson J, at 425-426 per Brennan J. The conclusion that equitable estoppel is to be characterised as an equitable claim which must be pleaded as a cross-claim seems to move from accepting that the remedy is available as a sword to holding that it is not available as a shield. (2) In Estoppel by Conduct and Election at [13-007] p 308, it is noted that as a matter of procedure, the Supreme Court of Judicature Act 1873 (37 & 37 Vict c 66) and its successors permit equities against the enforcement of legal rights to be raised by a defence or an application for a stay. (3) Cited in support of the learned author's proposition are the words of James LJ in Hughes v The Metropolitan Railway Company (1876) 1 CPD 120 at 133 in the English Court of Appeal: "This case must be treated in the same way as if a bill in equity had been filed for relief against the forfeiture after a judgment had been obtained at law." However, Mellish LJ, after noting that the case was a remnant from the pre-Judicature Act era and that the defendants "probably had no real opportunity of raising this equity by pleading" (at 134), went on to say that: "it must not be supposed to follow that a party may in future omit such a defence from his pleading, and seek to set it up after verdict. The question therefore is whether the defendants are entitled to equitable relief." Baggallay JA and Mellor J expressed agreement with what had fallen from both Mellish and James LJJ. Thus in Hughes , the defendant, not having had the opportunity to plead the equitable defence, was permitted to raise it as a claim, but I do not think that the Court of Appeal (or the House of Lords) should be seen as denying the availability of promissory estoppel as a defence. (4) The foundation of promissory estoppel is unconscionable resiling from voluntary promises, and where a defendant asserts the estoppel, he is asserting that the plaintiff is estopped or precluded from otherwise making out his case at law. If the contention is made good, I do not see why an injunction is required. (5) Other forms of estoppel, such as estoppel by representation, deed, or convention are pleaded by way of defence: see Handley, op cit at [17-007] p 308. 28 It follows, in my view, that a defendant can plead promissory estoppel as a defence. I then need to deal with the question of whether s 6 of the Law Reform Act gives the District Court jurisdiction to deal with the equitable defence.

29 In Kingswood Estate Co Ltd v Anderson [1963] 2 QB 169, Willmer LJ (with whom Upjohn LJ and Russell LJ concurred) rejected an appeal from a County Court judge who had upheld a defence of an equitable lease based on the principles in Walsh v Lonsdale (1882) 21 Ch D 9. Section 74 of the County Courts Act 1959 (7 & 8 Eliz 2 c 22) had a provision that every county court, as regards any cause of action within its jurisdiction, should in any proceedings before it "give such and the like effect to every ground of defence or counterclaim equitable or legal (subject to the provision of section 65 of this Act); as ought to be granted or given in the like case by the High Court and in as full and ample a manner." The County Court had no jurisdiction to grant specific performance of the agreement to lease because the property in question exceeded the value set by the County Courts Act. Willmer LJ said that since the plaintiff's cause of action was within the jurisdiction of the County Court "the judge was bound to give the like effect to any equitable defence as would be given in the High Court" (at 184). Counter-claims were, his Lordship noted, subject to a different regime, but the Court was of the view that the defendant was not obliged to bring a cross-claim. 30 In Yahl, Master Allen, as his Honour then was, discussed Kingswood and noted that the learned authors of R P Meagher, W M C Gummow and J R F Lehane, Equity Doctrines and Remedies (2nd ed, 1984), Butterworths, Sydney, contended that the equitable forms of defence referred to in s 6 of the Law Reform Act and its analogues should be given a more limited meaning, that is, matters such as unclean hands or laches. Master Allen felt it unnecessary to decide the point, but held that "reliance", equitable estoppel and promissory estoppel were all within the category of defences that did not require independent relief. In Batley, Bruce J held that a defence of equitable estoppel could be dealt with by the Local Court.

31 I note that the latest edition (the fourth edition) of Meagher, Gummow and Lehane's Equity Doctrines and Remedies at [2-245] maintains the view that s 6 of the Law Reform Act does not have a wide operation and that Kingswood was, on one view of it, wrongly decided, although the focus seems to be that a Walsh v Lonsdale defence is based on the ability to obtain specific performance. In Yahl, Master Allen refrained from expressing a view as to whether Kingswood was correctly decided, and treated promissory estoppel as in a different class to a Walsh v Lonsdale defence. I too do not need to determine whether Kingswood was correctly decided in relation to the Walsh v Lonsdale point, but the approach taken by the English Court of Appeal provides support for the view that s 6 of the Law Reform Act should not be read down, and with respect to those who hold a different view, I do not accept that the words of s 6 of the Law Reform Act should be read narrowly. 32 In Wilson, Adams J rejected the applicability of s 134(1)(h) on the basis that promissory estoppel was asserted by the defendant. His Honour seemed to hold that promissory estoppel is a defence not a claim. If equitable estoppel used as a shield is an equitable defence, then s 6 of the Law Reform Act requires full effect to be given to it by the District Court (and see United Telecasters). I am of the view that in a case where it is the defendant that asserts promissory estoppel, it is in fact an equitable defence to which the District Court is empowered and required by s 6 to give full effect. It can be seen by s 7 of the Law Reform Act that the power of the District Court to grant relief is not expanded by virtue of s 6, but should the District Court come to the view that the only appropriate relief is injunctive relief, s 7 of the Law Reform Act specifically permits it to grant the relief it is able to give, subject to terms and conditions, or to postpone the grant of relief. For reasons which I shall explain below, in this case, that is a most unlikely prospect. 33 I am of the view that Yahl and Batley were correctly decided, and therefore that the District Court does have jurisdiction to deal with a defence of promissory estoppel by virtue of s 6 of the Law Reform Act.

34 I accept that a defendant could choose to issue a cross-claim to assert the promissory estoppel seeking injunctive relief, and that if pleaded that way, there is a lack of jurisdiction in the District Court to grant that relief. The conclusion that a claim for promissory estoppel cannot be heard in the District Court if pleaded as a cross-claim is a most unfortunate one from a practical point of view, and it may be desirable that amendment be made to the DCA giving the District Court express power to grant an injunction in any claim for promissory estoppel. The position is even more deserving of attention if it be correct that even a defence of promissory estoppel cannot be entertained in the District Court.

The Utility of the Promissory Estoppel Claim 35 By virtue of s 135 of the DCA, the District Court is given, up to the monetary limit of its jurisdiction, all the powers that the Supreme Court has where relief is sought under the Fair Trading Act. Section 135 provides: "The Court has the same jurisdiction as the Supreme Court, and may exercise all the powers and authority of the Supreme Court, in any proceedings in which relief is sought under the Fair Trading Act 1987 and where the amount of the claim concerned does not exceed the amount for the time being specified in section 44 (1) (a)." 36 Thus, in this case, in relation to the claim under s 42 of the Fair Trading Act, the District Court has all the powers of the Supreme Court.

37 As Mason CJ and Wilson J pointed out in Waltons Stores, the doctrine of promissory estoppel extends to the enforcement of voluntary promises on the footing that a departure from the basic assumption underlying the transactions must be unconscionable (at 406); see also the helpful discussion of the differences between equitable estoppel and estoppel in pais by Brereton J in Moriatic Pty Limited v Gordon [2007] NSWSC 5 at [32]-[33], where his Honour speaks of promissory estoppel as being focused on the conscience of the party said to be estopped so as "to prevent unconscionable (or unconscientious) insistence" on legal rights. Thus the foundation of the claim in promissory estoppel is the same as that of the claim under s 42 of the Fair Trading Act. There is no suggestion that the District Court could not grant appropriate relief if the agreement to vary or determine the licence agreement is found to be established, or if it were to find that Dixon has engaged in unconscionable conduct which would lead to Mr Bushby having no liability to Dixon.

38 I note that a claim for promissory estoppel is described in Estoppel by Conduct and Election at [13-001] p 197 as being "based on a voluntary promise that the promisor will not enforce his strict rights against the promisee, which induces the latter to change his position in a way that would expose him to detriment if the promisor were free to resile without notice from his promise. The promisor can generally revert to his strict rights once the promisee has been returned to his original position provided this is possible." What is pleaded in this case as a promissory estoppel does not meet the criteria for such a claim, since on Mr Bushby's case there was consideration for Dixon's promise not to pursue rent from him after November 2009. 39 These matters, and due regard for the need to avoid unnecessary expense in the conduct of litigation (see s 56 of the Civil Procedure Act), call into question the need in this case for any reliance on the claims of promissory estoppel and attendant relief as a matter of practicality. 40 Mr Grant argued that this Court was better placed to deal with the issues which arise, quite apart from any issue of jurisdiction. I do not accept Mr Grant's submission, particularly having regard to the amount in question. 41 In this case, consideration needs to be given by those advising Mr Bushby as to whether the claim for promissory estoppel is appropriately claimed, and if it is, whether it is of any practical utility. 42 During the course of argument, I queried whether or not there was a legislative provision which permitted a transfer of proceedings from the District Court to the Supreme Court, then transfer back to the District Court. There was in the previous legislative framework a provision of that kind, and it is now found as s 144 of the Civil Procedure Act. Section 144 is in the following terms: "(1) This section applies to proceedings under Subdivision 2 of Division 8 of Part 3 of the District Court Act 1973 . (2) If, during proceedings to which this section applies, the District Court decides that it lacks, or may lack, jurisdiction to hear and dispose of the proceedings, the District Court must order that the proceedings be transferred to the Supreme Court. (3) Proceedings that are transferred to the Supreme Court under subsection (2): (a) are to be continued in the Supreme Court: (i) as if the proceedings had been duly commenced in the Supreme Court on the date on which they were commenced in the District Court, and (ii) as if any cross-claim in the proceedings had been duly made in the Supreme Court on the date on which it was made in the District Court, or (b) if the Supreme Court so orders, are to be remitted to the District Court and continued in the District Court as if they had not been transferred. (4) The District Court has, and may exercise, jurisdiction to hear and dispose of proceedings the subject of an order by the Supreme Court under subsection (3) (b), including such jurisdiction as is necessary to determine any question arising in any such proceedings. (5) If, during proceedings to which this section applies, the District Court decides that it is appropriate to do so for any reason other than the reason referred to in subsection (2), the District Court may order that the proceedings be transferred to the Supreme Court. (6) Proceedings that are transferred to the Supreme Court under subsection (5), are to be continued in the Supreme Court: (a) as if the proceedings had been duly commenced in the Supreme Court on the date on which they were commenced in the District Court, and (b) as if any cross-claim in the proceedings had been duly made in the Supreme Court on the date on which it was made in the District Court. (7) Subject to the rules of court applicable in the Supreme Court, the power of the Supreme Court to make orders as to costs includes a power to make orders with respect to the costs of: (a) the application for, and the making of, an order under subsection (2) or (5), and (b) any step taken in the proceedings before an order under subsection (2) or (5) was made. (8) The making of an order under subsection (2) or (5) does not invalidate any order previously made by the District Court in the proceedings." 43 It will be observed that pursuant to s 144(2), the order for the transfer must be made by the District Court when it considers that it lacks or may lack jurisdiction. The proceedings here are proceedings under Subdivision 2 of Division 8 of Part 3 of the DCA (see s 144(1)). 44 If Mr Bushby wishes to persist in his claim for promissory estoppel and for injunctive relief in respect of it, then once the Defence and Cross-Claim are filed in accordance with orders previously made in the District Court, an application can be made for an order from the District Court for a transfer of the proceedings to this Court pursuant to s 144(2) of the Civil Procedure Act. I think that the District Court would be justified in making such an order given the divergence of views on the question of its jurisdiction, and that this Court would be justified in making an order pursuant to s 144(3)(b) of the Civil Procedure Act to remit the matter to the District Court, whereupon the District Court would be empowered to grant whatever relief this Court could grant.

Conclusion 45 Accordingly, I do not accept that it is appropriate to order a transfer of proceedings pursuant to s 140 of the Civil Procedure Act, and the Summons should be dismissed. The plaintiff should pay the defendant's costs of the Summons.

07/04/2010 - Typographical error - Paragraph(s) 31 01/06/2011 - Change word 'suggestion' to 'dispute'Change sub paragraph numbering - Paragraph(s) 6, 27

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& 8 Eliz 2 c 22) District Court Act 1973(NSW)

& 37 Vict c 66) Trade Practices Act 1974(Cth)

Trade Practices Act 1974(Cth)

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