By Dr Katy Barnett
Napoleon Bonaparte said ‘the best way to keep one’s word is not to give it’. Perhaps the defendant in Sidhu v Van Dyke [2014] HCA 19 should have heeded those words, although the case came down not to the fact that Sidhu made and broke a promise, but to the fact that that the plaintiff, Van Dyke, relied upon the promise to her detriment (see the joint judgment at [58]).
Van Dyke had rented a cottage from Sidhu and his wife, who lived 100 metres away in the main homestead on the property. The property was jointly owned by Sidhu and his wife. Van Dyke and Sidhu commenced a sexual relationship which led to the breakdown of Van Dyke’s marriage. Sidhu told Van Dyke not to worry about getting a property settlement in the divorce, as he would subdivide the land belonging to him and his wife, and give the cottage to Van Dyke. However, when his relationship with Van Dyke ended some eight years later, Sidhu repudiated his earlier promises and Sidhu’s wife refused to consent to a subdivision. The High Court clarified that Australian law did not recognise Lord Denning’s ‘presumption of reliance’ in Greasley v Cooke [1980] 1 WLR 1306. In other words, Australian law does not presume reliance on the part of a representee (in this instance Van Dyke), and a representee is still required to make out detrimental reliance. Moreover, the burden of proof to establish detrimental reliance is always on the representee.
The Court unanimously concluded that Van Dyke had made out detrimental reliance and found that Sidhu was estopped from denying his promise to Van Dyke. But as the cottage had burned down and the subdivision had never taken place, Van Dyke was awarded equitable compensation reflecting the value of what she had lost. Continue reading