Promissory Estoppel Running with Land

In GJA Kalra Pty Ltd v Amgade Pty Ltd [2023] NSWCA 119, in the course of unanimous dismissal of an appeal, one member of the New South Wales Court of Appeal, Brereton JA, wrote:

[4]  It is a fundamental element of a promissory estoppel that the representee, or person seeking to invoke the estoppel, has acted to its detriment in reliance upon the representation. For my part, I have little difficulty with the proposition that an estoppel can, in appropriate circumstances, run with the land. Illustrations of this are to be found in Ward v Kirkland [1966] 1 All ER 609; [1967] Ch 194; Plimmer v Wellington Corporation (1884) 9 App Cas 699; Hamilton v Geraghty (1901) 1 SR (NSW) Eq 81; (1901) 18 WN (NSW) 152 in this Court, and more recently in the decision of Needham J in Hill v AWJ Moore & Co Pty Ltd (1990) 5 BPR 11,359.

[5]  However, that does not mean that just because a promise concerning land is made, it somehow attaches to the land. In this case the appellant conducted the case on the basis that it, or at least a related company, had contracted to purchase the business and take an assignment of the lease on 10 June 2011, before it contends any relevant representation was made. If that contract be the relevant contract, and it contained a warranty by the vendor pertaining to relevant matters, then it is very difficult to see how a representation made after that contract could have been relied on by the appellant.

[6]  The appellant then contended that the representation became binding by reason of the first payment of rebate to the vendor of the business in August 2011. The problem with that proposition is that first, by that time, the promise had in any event been varied to be conditional upon prompt payment of rent and outgoings, which condition meant that any estoppel could not be enforced if it were not met: see, for example, the judgment of Needham J in Vinden v Vinden [1982] 1 NSWLR 618. Moreover, the allowance of a rebate by the landlord could not possibly be detrimental reliance by either the outgoing or incoming tenant such as to make the promise one from which the landlord could not resile.

[7]  The ultimate possible act of detrimental reliance was the completion of the purchase and taking of the assignment of the lease, apparently sometime in 2012; but by that time, not only had the promise been varied to make prompt payment of rent and outgoings a condition, but in addition, the appellant had specifically sought confirmation that it would receive a rebate, had not been given that confirmation, and entered into the assignment of the lease which contained terms quite inconsistent with any such promise.

A different scenario arises, however, in the event that the representor owner transfers their land and the transfer is registered, and the subject matter bears on the interest in land enjoyed by the representee.  An issue which will then arise concerns whether the plaintiff representee can invoke an exception to indefeasibility under a recognised cause of action arising out of the defendant proprietor’s conduct in acquiring or holding the registered interest eg deceit, misrepresentation, mistake, unconscionable conduct or duress.  Such proprietor’s conduct must amount to a breach of some obligation owed to the plaintiff, or otherwise be unconscionable:Farah Constructions Pty Ltd v Say-Dee Pty Ltd(2007) 230 CLR 89 at [193]-[195];  see also McGrath v Campbell (2006) 68 NSWLR 229 at [98].