Craine v Colonial Mutual Fire Insurance Company Limited [1920] HCA 64

Craine v Colonial Mutual Fire Insurance Company Limited [1920] HCA 64 - HCA 1920 case summary — Zoe

[96]

importance by both sides. It contains two paragraphs, carefully segregated by numbers, The first, marked (1), recalls the acknowledg- ment of the 26th " without prejudice," and adds "still under cover of this I now notify you that ' - and then follow what are indicated _ as defects in the claims, &c., actually delivered at three o'clock on the 26th. The second paragraph is marked (2), and certainly, so far as express connection with the " without prejudice" reference is concerned, is entirely free from that. It " calls upon " the plaintiff for further information. The next paragraph requires access to safes, kc. The next paragraph we regard as highly important. It is marked (4), and runs thus : - " It is my intention to make arrange- ments to sell or dispose of all salvage stock on account of whom it may concern. 'This refers to all stock, the subject of your general claim, but does not include the motor-cars which are specifically insured," &c. It concludes: " Failure on your part to give this information will involve the sale of such articles" (7.e., articles not insured) ''on account of whom it may concern in terms of condition 12 of the policy." In order to fully anderstand that letter, it is necessary to state that as early as 5th October it appears by a letter of Leslie to Craine that possession had been taken of the plaintiff's premises and all property in the building. Possession under clause 12 was retained in respect of all the plaintiff's property as well as his premises until 4th February 1918 - motor-cars included. The proposed sale mentioned in the letter of 30th October, however, under clause 12, did not extend to the motor-cars. On 14th November the defendants' solicitors, in reply to a letter threatening proceedings, wrote to the plaintiff's solicitor stating : - '* Mr. Leslie has handed us your letter of 13th instant. He is not prepared to advise the Companies to pay your client anything in settlement 'as he has not yet complied with the terms of the policies, and, as we have already informed you, nothing is payable until this is done." On 2nd February the defendants' solicitors wrote to plaintiff's solicitor a letter containing this passage: " Salvage - Our clients propose to withdraw from possession of the premises and the salvage therein at four o'clock on Monday next 4th instant." On that day _ they gave up possession. And from twelve o'clock on 26th October

[97]

1917 to 4th February 1918 - practically four months - the Company, with full knowledge of the facts as to condition 11, had retained possession of the premises and cars, and all property in the premises, in adversum, and in right of clause 12 of the conditions of the con- tract. During that time the plaintiff had submitted, both under the express provisions of clause 12 and obviously under fear of the proviso in clause 13 that hindrance and obstruction in relation to clause 12 would be a cause of forfeiture ; and it needs no evidence to establish either the plaintiff's " inducement " or his " prejudice" in relation to this conduct on the part of the Company. During that period, the Company was seeking, and the plaintiff was furnish- ing, proofs and information respecting his claim. Without intro- ducing any evidence beyond what we have referred to, it appears to us ample to enable a jury as men of the world to say the plaintiff as a reasonable man was not only likely, but extremely likely, to infer and did in fact infer from the attitude and acts of the Company that, whatever its original intention to deny liability was, it ulti- mately made up its mind - and gave him to understand that it had made up its mind - that its acts and dealings with him were on the basis of an existing liability, unimpaired by the want of strict compliance with clause 11. We attach in this connection great importance as a matter of evidence to what was done under clause 12. Whether the word " appraisement " which limits the relevant part of clause 19 includes action under clause 12, we do not think it necessary to determine. (See Perkins v. Potts (1) and Leeds v. Burrows (2).) To some extent, doubtless, that clause aids in adjust- ing the loss. But whether "appraisement" is identical with or includes adjustment we are not prepared to decide. We find it unnecessary. Certainly clause 12 goes beyond adjustment and appraisement. It modifies the common law position of the parties as to salvage (see per Blackburn J. in Rankin v. Potter (3), citing Randal v. Cockran (4)), and it operates to give control of the salvage to the Company pending adjustment, and enables it to get rid of the salvage, and to take - as it did take - possession of the building or premises where the loss happened. The rights under that clause,

[104]

The first argument for the defendant at this juncture was that the finding was not a representation of fact but of future intention, which could not raise estoppel. The principle that a representation to raise estoppel must be of an existing fact is firmly established (Jorden v. Money (1); George Whitechurch Ltd. v. Cavanagh (2) ). But a presently existing intention may be an existing fact. Actually doing a present act, such as demanding information and holding possession of another man's property, with a present stated intention, is very different from merely stating an intention to do something in the future. The intention in the first case is a quality attaching to the act presently in course of progress, and, if it exists, it at once determines the character of the act, no subsequent change of inten- tion can alter the nature of the act already done. The existence of intention coupled with the act is what is described in Pickard v. Sears (3) as " the existence of a certain state of things," in a passage adopted in Jorden v. Money (4). If Edgington v. Fitzmaurice (5) is right - and we conceive it to be right - and to be supported by the Privy Council case of Sarat Chunder Dey v. Gopal Chunder Laha (6), the defendant's contention as to this point fails. This brings us face to face with the respondent's contention that clause 19 is a bar to the appellant's claim. In saying that, we do not lose sight of the fact that the learned Chief Justice of Victoria rested his judgment on two grounds, and that the first was inde- pendent of clause 19. His Honor considered that, inasmuch as Leslie's letters of 26th and 30th October " made a distinct statement that the Company proceeded without prejudice," and none of the other letters in his Honor's opinion weakened that reservation, that ended the question of waiver. As already stated, we do not agree with the view taken that the jury could not come to the conclusion it did. But, apart from that, we do not agree with the position in point of law. A man is bound by what he does, and he

[117]

Estoppel by conduct is of comparatively recent development.

Commencing with Pickard v. Sears (1), the doctrine has gradually
been elucidated until its true principles have been placed on a distinct footing by the Privy Council in 1892 in the case of Sarat Chunder Dey v. Gopal Chunder Laha (2); Lord Shand (who spoke for Lord Watson, Lord Morris and Sir Richard Couch, as well as himself) stated the fundamental groundwork of estoppel in terms that entirely relieve this case of any doubt. When its true founda- tions are stated, it will be seen that estoppel is separated from waiver in point of principle by a very broad line of demarcation. First of all, the law of estoppel looks chiefly at the situation of the person relying on the estoppel; next, as a consequence of the first, the
knowledge of the person sought to be estopped is immaterial ; thirdly, as a further consequence, it is not essential that the person sought to be estopped should have acted with any intention to
deceive ; fourthly, conduct, short of positive acts, is sufficient. Lord Shand said (3) : - '' The law of this country gives no coun-
tenance to the doctrine that in order to create estoppel the person whose acts or declarations induced another to act in a particular way must have been under no mistake himself, or must have acted with an intention to mislead or deceive. What the law and the Indian statute mainly regard is the position of the person who was _ induced to act ; and the principle on which the law and the statute rest is, that it would be most inequitable and unjust to him that if another, by a representation made, or by conduct amounting to a repre- sentation, has induced him to act as he would not otherwise have done, the person who made the representation should be allowed to deny or repudiate the effect of his former statement, to the loss and injury _ of the person who acted on it. If the person who made the state- ment did so without full knowledge, or under error, sibi imputet. It may, in the result, be unfortunate for him, but it would be unjust, ~ even though he acted under error, to throw the consequences on the _ person who believed his statement and acted on it as it was intended

At a glance

Court

Decision date

Source

Judgment (134 paragraphs)