The decisions of the High Court in Australian Financial Services and Leasing Pty Ltd v Hills Industries1 and Sidhu v Van Dyke2 raise questions as to how detriment is to be assessed in actions for restitution and proprietary estoppel.

Where money has been paid under mistake a plaintiff may commence action seeking restitution (that is, recovery of the money) from the recipient.3 The recipient may raise the ‘change of position defence’ where they have relied upon the receipt of the money and subsequently altered their position to their detriment.4 Where, as a result of the detrimental reliance, it would be inequitable for the plaintiff to recover part or all of the money, change of position will be a pro tanto (to the extent of the detriment) or complete defence respectively.5

Proprietary estoppel is an equity that binds a proprietor who has induced another person to believe they will be given an interest in property where that person has changed their position to their detriment in reliance on the expectation.6 As the nature of the subject matter is vastly different to restitution, the attempt to remedy injustice between the parties is much broader. A number of decisions support the position that the remedy must reflect the minimum relief necessary to ‘do justice’ between the parties,7 and in Sidhu v Van Dyke it was held that the ‘relief which is necessary … is usually that which reflects the value of the promise.’8

Both change of position and proprietary estoppel rely on the concept of ‘detriment.’ This encompasses a wide range of loss, from purely quantifiable loss to less concrete disadvantage. As Nettle JA explained in Donis v Donis: ‘detriment is no narrow or technical concept. It need not consist of expenditure of money or other quantifiable financial disadvantage so long as it is something substantial.’9 This view was taken by the majority in Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd with support from English authority.10

Realistically the detriment in relation to change of position in restitutionary actions is likely to always be financial or economic, including a loss of opportunity to recover a debt.11 Equity will not, however, ‘restrict the principle to economic misfortune’ and, reflecting Nettle JA’s explanation, may include ‘[m]ental distress, anxiety, inconvenience and interruption with one’s ordinary conduct.’12

Nettle JA’s description of detriment was approved by the majority in Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd: ‘Detriment has not been considered to be a narrow or technical concept in connection with estoppel. So long as it is substantial, it need not consist of expenditure of money or other quantifiable financial detriment.’13 Given that the change of position defence is a derivative of estoppel by representation,14 it is no surprise that the High Court has taken a very similar approach to detriment in estoppel and restitution cases.

Gageler J’s separate judgment in Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd provides further guidance on detriment in estoppel.15 In his Honour’s view, the detriment can be any ‘material disadvantage’ that would result from abandoning the assumption on which the disadvantage party relied.16 Although the material disadvantage does not need to be quantifiable to the same extent as an award of damages,17 it must still be substantial.18 Both the loss of a legal remedy19 and the chance of obtaining an economic or other benefit which ‘might have been obtained by ordinary diligence’20 will suffice.

Despite numerous illustrations, the High Court has not provided any guidance on what ‘substantial detriment’ actually means, or how it is to be determined. The question then is: how much detriment is necessary for it to be considered ‘substantial’ and thus attract the protection of equity?

Neither the change of position defence nor proprietary estoppel are available where there has been no detriment.21 That detriment must arise as a direct result of reliance upon some assumption or representation. For change of position this is an assumption that the recipient is entitled to the money paid22 and in proprietary estoppel it is the assumption that the proprietor will make good their representations or promises.23

A defendant may not use the change of position defence where there reliance is based on some other information.24 In Perpetual Trustees Australia Ltd v Heperu Pty Ltd the New South Wales Court of Appeal held that a recipient ‘must have information that entitles it (on the basis of the information) to deal with the receipt.’25 In regard to proprietary estoppel, it must have been the conduct of the proprietor that induced reliance and caused the detriment suffered,26 but it is not necessary for the estopped party’s conduct to be the sole inducement.27 Unless these conditions are met, the court will not protect an innocent recipient or compel a representor to make good their representations.

Once detrimental reliance has been established, the court may permit change of position as a pro tanto defence (allowing partial recovery). Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd provides an indication when it is appropriate to do so. Gageler J enunciates those conditions most clearly: firstly, the detriment must be financial or pecuniary; secondly, it must be able to be quantified; and thirdly, it must be less than the amount received.28

This view appears to be supported by French CJ29 and the majority did not accept the appellant’s argument that ‘a court presented with a change of position defence based on the discharge of a debt, or loss of an opportunity to recover payment of a debt, must place a value on the debt which is repaid, or upon the lost opportunity to recover the debt, because the defence operates only pro tanto to the extent of that proven value.’30 It seems to be a sound guiding approach that so long as Gageler J’s conditions are met and full recovery would be inequitable, partial recovery will be permitted.

Questions surrounding the substantiality of the detriment do not seem to be relevant where the detriment can be quantified: that the defendant has not returned the money in full implies that it maintains an entitlement to at least some portion and considers that portion to be of ‘substantial’ value if it is prepared to face litigation to retain it. However, applying Gageler J’s criteria, the value must be incontrovertibly quantifiable. The court is not amenable to discussing probability in these circumstances: the amount must be precise and certain.31 Estoppel cases may have a number of different outcomes, which bear no real relation to pro tanto operation: the court will tailor the remedy to the circumstances.32

Change of position will seemingly operate as a complete defence where all but the quantification requirements for pro tanto recovery are met.33 This does not reduce the substantiality requirement. However, it would seem from Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd that provided a detriment reasonably equatable with the received amount exists, the court will allow change of position as a complete defence. This reflects a general desire to protect the finality of transactions are encourage financial certainty.34

Proprietary estoppel cannot be said to operate in the same way. To begin with, it is not a defence per se. More importantly it deals with an expected benefit. This is comparing apples to oranges: proprietary estoppel has a wide range and combination of remedies available, while change of position in restitution can only answer whether the recipient should repay what it received, in part or in whole.

Although change of position and proprietary estoppel are vastly different, both form, along with misleading and deceptive conduct and no doubt others (especially other forms of estoppel), a class of cases that can referred to as ‘reliance cases.’ Reliance cases consist of three key elements: first, a representation by one party or mutual assumption of fact; secondly, a reliance by the other party on that representation or assumption, and thirdly a detriment suffered by that party as a result of their reliance. Where these conditions are met, the court may afford protection to the innocent recipient paid of money under mistake or compel a representor to make good their representations.

So far the nature of the detriment has been discussed in considerable detail; but how will a court determine whether that detriment is ‘substantial’? It seems that where the change of position defence applies or in an action for proprietary estoppel, the court will look firstly at whether the detriment suffered is quantifiable with certainty (as above). This may be significantly easier to determine in relation to the change of position defence given that detriment may often be purely financial.

The court will not, however, attempt to quantify the detriment to the same degree of care as an assessment of damages in tort.35 In Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd the High Court firmly rejected any argument that it should attempt to precisely calculate the monetary value of the detriment and award pro tanto recovery on that basis.36 It seems logical that if the court is presented with a definite value of detriment and the other conditions are met, an inquiry into the substantiality of the detriment is unnecessary.

A ‘substantial’ detriment in regard to change of position seems to be any detriment that is unquantifiable but reasonable to equate with the value of the loss. This step is quite a small one to make given the High Court acknowledges change of position as an equitable defence.37 It is perfectly logical that the court takes a flexible and case-by-case approach towards assessing detriment in view of equity’s primary goal of avoiding injustice.38

In Sidhu v Van Dyke the High Court remarked that ‘[i]f the respondent had been induced to make a relatively small, readily quantifiable monetary outlay on the faith of the appellant’s assurances, then it might not be unconscionable for the appellant to resile from his promises to the respondent on condition that he reimburse her for her outlay.’39 The court went on to quote Donis v Donis, however, that where ‘the detriment suffered is of a kind and extent that involves life-changing decisions with irreversible consequences of a profoundly personal nature … beyond the measure of money … the promisor’s conduct can only be accounted for by substantial fulfilment of the assumption upon which the respondent’s actions were based.’40 The Court also said that ‘in the circumstances of the present case, as in Giumelli, justice between the parties will not be done by a remedy the value of which falls short of holding the appellant to his promises.’41

These extracts point to a very clear reasoning. It can be deduced that a ‘readily quantifiable monetary’ detriment may be remedied by repayment of that amount. On the other hand, where it involves more than a mere financial outlay that goes ‘beyond the measure of money’, it would seem generally that holding the promisor to their promise would be the only appropriate remedy. It is important to note the High Court’s use of the phrase ‘in the circumstances.’

Proprietary estoppel may in some regards be compared to specific performance in contracts for sale of land. As Covell, Lupton and Forder write, specific performance ‘owes its development to the fact that damages may be an inadequate remedy for breach.’42 The rationale behind this is that substitutes are not readily found for the land the subject of the contract.43 ‘Damages at law … may not be a complete remedy to the purchaser, to whom the land may have a peculiar and special value.’44 Certainly this is true of proprietary estoppel if compared to Donis v Donis quoted above.45 As with specific performance, proprietary estoppel can ensure that a person expecting to receive a proprietary interest is given that interest where it would be inequitable to grant any other remedy.

There is no hard and fast rule for assessing detriment in reliance cases. It is fair to say that the High Court’s general view is that where detriment can be valued precisely without reference to probabilities and ‘consideration of more than one counterfactual’,46 to use French CJ’s words, or is a ‘relatively small, readily quantifiable monetary outlay’,47 then change of position or proprietary estoppel will only operate as far as that detriment goes.

In cases where the detriment is not readily quantifiable, the court will be called on to assess that detriment and determine whether it is ‘substantial.’ This is to be determined on a case-by-case bases. To adapt the words of Deane J in Commonwealth v Verwayen: ‘development on a case-by-case basis enables … adaption to meet changing circumstances and demands.’48 At the very core of change of position and estoppel is the notion of inequity. To attempt to pin down a precise principle by which to assess detriment is a fool’s errand: the court must fit the remedy to the circumstances, deciding what is necessary to do justice between the parties.



  1. (2014) 307 ALR 512.

  2. (2014) 308 ALR 232.

  3. Cmr of State Revenue (Vic) v Royal Insurance Australia Ltd (1994) 182 CLR 51, 75.

  4. David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353, 385.

  5. Ibid 392–3 (Brennan J); Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 307 ALR 512, 516, 528, 541–2, 559–61.

  6. Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387.

  7. Commonwealth v Verwayen (1990) CLR 324, 411; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 404; Crabb v Arun District Council [1976] Ch 179, 198.

  8. (2014) 308 ALR 232, 249.

  9. (2007) 19 VR 577, 583.

  10. (2014) 307 ALR 512, 540, citing Gilett v Holt [2001] Ch 210, 232–3.

  11. Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 307 ALR 512, 528, 533.

  12. John Juriansz et al, Equity and Trusts (Palgrave Macmillan, 2012) 163.

  13. (2014) 307 ALR 512, 540.

  14. This aspect is discussed extensively in TRA Global Pty Ltd v Kebakoska [2011] VSC 480.

  15. (2014) 307 ALR 512, 557.

  16. Thompson v Palmer (1933) 49 CLR 507, 547; Newbon v City Mutual Life Assurance Society Ltd (1935) 52 CLR 723, 734–5.

  17. Commonwealth v Verwayen (1990) 170 CLR 394, 448, 461–2.

  18. Donis v Donis (2007) 19 VR 577, 583.

  19. Greenwood v Martins Bank Ltd [1933] AC 51, cited in Thompson v Palmer (1933) 49 CLR 507, 549.

  20. Knights v Wiffen (1870) LR 5 QB 660, 665, cited in Thompson v Palmer (1933) 49 CLR 507, 527–8.

  21. David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353, 385.

  22. Ibid.

  23. Commonwealth v Verwayen (1990) 170 CLR 394, 444.

  24. See generally State Bank of New South Wales v Swiss Bank Corp (1995) 39 NSWLR 350.

  25. (2009) 76 NSWLR 195, 224.

  26. Commonwealth v Verwayen (1990) 170 CLR 394, 444.

  27. Amalgamated Investment & Property Co Ltd (in liq) v Texas Commerce International Bank [1982] QB 84 104–5, quoted in Sidhu v Van Dyke (2014) 208 ALR 232, 247.

  28. Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 307 ALR 512, 560.

  29. Ibid 516.

  30. Ibid 533. See also ibid 527, 538.

  31. Ibid 538–9, 527–8.

  32. Giumelli v Giumelli (1999) 196 CLR 101, 120; Yarrabee Chicken Company Pty Ltd v Steggles Ltd [2010] FCA 394 [135]; Delaforce v Simpson-Cook [2010] NSWCA 84.

  33. See generally Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 307 ALR 512.

  34. Ibid 541.

  35. Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 307 ALR 512, 527–8, 538–9, 557.

  36. Ibid.

  37. Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 307 ALR 512, 539.

  38. AMEV-UDC Finance Ltd v Austin (1986) 162 CLR 170, 197; Paget v Gee (1753) Amb 807, 810.

  39. (2014) 308 ALR 232, 249.

  40. (2007) 19 VR 577.

  41. Sidhu v Van Dyke (2014) 308 ALR 232, 249.

  42. Wayne Covell, Keith Lupton and Jay Forder, Principles of Remedies (LexisNexis Butterworths, 5th ed, 2012) 237.

  43. McIntosh v Dalwood [No 4] (1930) 30 SR (NSW) 415, 418; Pianata v National Finance & Trustees Ltd (1964) 38 ALJR 232.

  44. Adderley v Dixon (1824) 1 Sim & St 607, 610.

  45. (2007) 19 VR 577, 589.

  46. Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 307 ALR 512, 528.

  47. Sidhu v Van Dyke (2004) 308 ALR 232, 249.

  48. Commonwealth v Verwayen (1990) 170 CLR 394, 443.