Friday, December 14, 2012

Waltons Stores (Interstate) Ltd v. Maher case brief

Waltons Stores (Interstate) Ltd v Maher

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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