Commonwealth of Australia v Verwayen

Commonwealth of Australia v Verwayen (1990) 170 CLR 394

Whether a right to pursue litigation can create an estoppel.

Facts:

The plaintiff was a naval officer who was injured when two navy ships, the HMAS Voyager and the HMAS Melbourne, collided during a combat exercise in 1964. The plaintiff did not sue for negligence because until that time is was widely believed that a member of the armed forces could not sue the government for the negligence of another member of the armed forces. By 1984 the position had changed and the plaintiff sued the government for negligence. The government wrote back to him stating that they admitted negligence and was not relying on the statute of limitations which would have time-barred the lawsuit and prevented the plaintiff from claiming. However, 10 months later following a policy review the government tried to raise both of these defences. The plaintiff appealed.

Issues:

The plaintiff argued that the government had waived its right to raise either of these defences or that the doctrine of estoppel would prevent them from going back on their former assurances.

Held:

The High Court of Australia held that the government was not free to raise the two defences. Two of the judges believed the government had ‘waived’ their rights. However, the other two judges believed there was an estoppel. The court held that reliance and detriment can include spending time, effort and money pursuing litigation. Stress, anxiety and inconvenience suffered can be taken into account. Mason CJ said [at 413] that the extent of the claimant’s equity must be proportionate

‘to the detriment which is its purpose to avoid.’