Waltons
Stores (Interstate) Ltd v Maher
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FactsWaltons
Stores negotiated with Mahers for a lease of land owned by the
Mahers. Waltons proposed the demolition and replacement of an
existing building. There was a sense of urgency, as construction
according to target date required immediate demolition. Waltons
solicitor indicated he had received verbal instructions to accept
amendments proposed by Mahers, and followed up with a letter
indicating that he believed approval would be forthcoming and they
would be notified if any amendments were not agreed to. The Mahers
were not notified of any objections and proceeded with demolition and
partial construction. During this time they sent a new copy of the
amended proposed lease, which was returned at a later date indicating
Waltons no longer intended to enter the leasing arrangement. The
Mahers sued for a declaration that a binding contract existed,
specific performance or damages in the alternative.
IssueWas
Waltons entitled to remain silent knowing that the Mahers were
proceeding with demolition and construction on the understanding that
they had an agreement and that the completion of the exchange was a
mere formality?
RatioWaltons
is estopped from escaping the implied promise to complete the
contract. While the mere exercise of the legal right not to contract
with the Mahers was not unconscionable on its own, two additional
factors were considered. First, the urgency of the situation was
considered. Waltons was fully aware of the need for an immediate
response, but nonetheless chose to reserve a response until two
months later. Secondly, the Mahers were given the impression that the
necessary exchange was a mere formality. Thus, Waltons had an
obligation to communicate their intentions after the initial
correspondence, and even more so after receiving the executed
counterpart deed on 10 December.
HeldAppeal
dismissed. Judgment for Maher. Prior judgments upheld.
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