Bertinin Italian Restaurant Vs Garland Properties Pty Ltd

Question: Diference Beetween Bertinin Italian Restaurant Vs Garland Properties Pty Ltd? Answer: Introduction The concepts of collateral contract, promissory estoppel and remedies as used in the law of contract on many occasions have remained the bone of contention in many of the cases adjudicated in the courts today. Perhaps this is because many of the parties that enter into contract clearly do not understand their role in it and the issues that must be agreed upon before entering into a contractual relationship (Knowler, 2011, Stephenson, 2014 and Young, 2016). The case at hand is one example where the parties are not very sure of what step to take after the notice terminating the tenancy relationship had been issued. The analysis of this case will advise the two parties about their standing points about the collateral contract, promissory estoppel, and remedies. The security contract also known as a side contract, is entered into outside the main contract even it is has a strong relationship with the original one (McKendrick, 2015). The side contract is normally accepted because the issu es concerned can conflict the original contract. On the other hand, the doctrine of Promissory Estoppel is considered an equitable discipline that is aimed at preventing any injustice (Macdonald et al. 2014). The concept is neither an agreement nor estoppels but a principle that is normally invoked when one breaches a contract (Knowler, 2011). Finally, remedies refer to damages one stands to be paid as a result of the other party breaching the contract. All these concepts will be the guiding rules in the analysis. Bertin Collateral contract, promissory estoppel, and remedies Even though it was not put in writing the two parties in the contract did enter into what was believed to be a collateral contract by the plaintiff. The plaintiff in the case had been leasing the restaurant space from Garland Properties Pty Ltd on a monthly basis thus implying that contract was being entered into every month. However, the accuser did develop an interest to lease the property for ten years with a possibility of five years renewal. This means that a long-term contract had to be signed between the two parties (Green, 2014. This did not go as planned since the owner of the property, was only willing to lease the property for five years. Even though the two parties had not agreed on the way forward, leaser did indicate that they will look after the tenant at the renewal of the lease after five years if the leasee could undertake a major refurbishment of the restaurant space. It was a massive project costing the plaintiff approximately $2 million. The landlord did also mak e statements that if the refurbishment could be done and completed before a major Melbourne Expo was held, the tenant could be considered for renewal after the five years period. Now, considering the statements that were being made by the landlord, they were amounting to a collateral contract which was part of the original contract according to the complainant (Macdonald et al. 2014). Because of that, the tenant decided to make a commitment of resources to refurbish the restaurant with the hope that the contract will be renewed after five years and that will be able to $300,000 both from ordinary profits and other exceptional profits. This was only possible with a new contract. However, this did not happen since they were given six months to vacate the premises. This becomes the damage they suffered as result of the landlords decision (McKendrick, 2015). Worth noting, however, is the fact that when the five-year contract was signed, some contractual issues were agreed upon. First, the landlord was free to renew the lease and given the terms of the new lease. They could also allow the tenant to enter into a month-to-month basis. Lastly, they could choose to te rminate the contract and give the notice of vacation. The latter happened. The promissory estoppel happens when a party in the contract makes a certain decision by relying on the statements or bids made by the other party. It is one concept that many legal scholars have come to identify with the modern business environment. It is therefore expected that one party must reasonably induce the forbearance and character that substantially causes a certain action and should remain to bind (Green 2014, Hugh, 1996, Kidd, 1990 and McKendrick, 2015). In simple terms, the statement that leads one person to do something, justice can only be done if what was promised is done. In this case, the plaintiff relied on the statements that were made by the landlord to engage in refurbishing the restaurant. He hoped that after the renewal, the business would recover and make profits out of the ten year period. In this case, the owner of the property was making indicative promises to the tenant. Based on the evidence provided for in the case, clearly, there is no evidence for a collateral contract (Morgan, 2015). However, what was being done by the landlord did show intention to promise something to the tenant something that triggered their action. Considering what the tenant had done and what had been promised to them, it is important to point out that legally speaking, there is no clear promise that the lease will be renewed. The leasee stands to lose about $300,000. This is the damage that could be considered if the court granted the plaintiff requests. Based on the scenario under which the refurbishment was done, the plaintiff does not stand to get any remedies as a result of damage. First there is no clear collateral contract, and secondly, there is no clear promissory estoppel. This could be well illustrated by the case of Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd. The case was about the leasing of a residential house for tenants from Crown by Cosmopolitan (Hotel, 2016). In this case, Crown had leased the house to Cosmopolitan, and after some time, Crown thought of making some major refurbishments on the two premises. The lease was for five years, and after the understanding, Crown did make a statement that the tenants will be looked after at the time of the renewal if the tenant did the quality refurbishment. Cosmopolitan did go ahead and did the refurbishment. After the five years elapsed, Crown declined to renew the leasehold and Cosmopolitan were expected to vacate the premises. Based on the action by the owner, the case ended in the Victorian Civil and Administrative Tribunal. After reviewing the case and the facts surrounding it, the tribunal stated that if the refurbishing were of good quality would think of renewing the lease for Cosmopolitan, amounted to an unenforceable collateral contract (Green, 2014). In clear terms, it looked like a promise, and therefore the tenant was convinced by the statements. Feeling that justice had not been done, the landlord did go for appeal both in the Court of Appeal and the Victorian Supreme Court. The two courts did reject the conclusions by the tribunal. The courts held that statements made were neither a collateral contract nor promissory estoppel meaning that it was void and cannot bind somebody in the court of law. Various courts could also allow the appeal and dismiss the so-called the cross-sectional appeal. Three rulings by three separate courts did uphold that there was no collateral contract in the case (Knowler, 2011). The statement that by the crown that the tenants would be looked after during renewal according to the courts never amounted to an agreement and a binding relationship. The statements did not have the quality required to the case in the court and claim for damages (Schwartz and Scott, 2003. In essence, the courts did indicate that there was no clear obligation on the side of the owner in renewing the lease. The terms that were used were not clear and lacked legal obligations at all. What this implies, is that even though someone could truly depend on certain statements to take a certain action, the bottom-line is that it must be clear and if possible put in writing. The concept could be wrongly used and for an exploitative reason for those who may think they are in a collat eral contract while they are not. In the case, the court did maintain that for Estoppel to work there must be a clear representation of facts, precise and free from any ambiguity (Macdonald et al. 2014). The estoppel must make sense to the person it is addressed to so that a one does not act based on assumptions which are detrimental. The phrase that confused the whole case is that the "tenants would be looked after the lease. "Legally speaking, that does not indicate the renewal of the lease," the court argued. It is this statement that the Hotel assumed to mean that they will get a renewal. Consider the case of Bertin Italian Restaurant v Garland Properties Pty Ltd. There is no collateral contract. Perhaps, one could argue that there is an estoppel but going as per the precedent case; there is no promissory estoppel either. These are two related cases with the same background. Bertin did rely on the statement from the landlord that they will consider renewing the lease if the refurbishment could be completed the expected before the major Melbourne Expo. Actually, this phrase is similar to the one in the precedent case was used, he will be looked after at the renewal time. This case, if someone relies on the previous one that had been decided, would conclude that it does not meet the threshold of being considered a collateral contract (Graw, 2015). It is ambiguous in nature. Someone cannot explain what it means by the statement that, the tenants will be looked after. This statement could be interpreted and give different meanings (Guenter, 2003). For example, the stateme nt could be used to mean that the owner will organize for the hotel to get another place or even make some little compensation because of the drastic measure that may be taken. In this case, there is no clear ground to argue for collateral contract and promissory estoppel. The implication of this, therefore, is that Bertin will not succeed in a court of law in claiming any damages he feels have been caused to him (Knowler, 2011). He will have to prove what the statements by the landlord meant to qualify for a remedy. This is because he did rely on the information that was not clear. The court cannot make a ruling based on the assumptions. It, therefore, stands that Bertin he only speculated about the intention of the other part (Radin, 2012, Robertson, 2005, Roy, 2007 and Sirko, 2011). Since the collateral contract does not exist, it means that the landlord can continue with other businesses and look for other tenants whom he can negotiate better deals. In general, as pertains to this case, Bertin is not by any means in a collateral contract. A collateral contract must be made by two original parties or any other third part. For a relationship to qualify to be a collateral contract, it must have clear terms outside the original ones; it must demonstrate evidence why it is formed, and it must show how it is complementing on the original contract (Morgan, 2015). The contract is normally alongside the main contract, and it is not something that should be guessed but something the two parties must be aware off (Buckley, 2005, David, 1996, Jack and Daniel, 1997, Woodroffe and Lowe, 2013). Also, for a promissory estoppel to qualify in a court of law, it must have the following five elements: First and foremost, there is must be a contractual relationship. Parties were planning to enter into a contractual relationship also may apply the principle to help ensure that a promise can be fulfilled if the requirements have not been satisfied (Knowler, 2011). The intention here is to ensure that a contract has been entered into even though the exact rules of forming a contract have not been followed. Two, the promissory estoppel must also act as a representation or a promise by one party to the contract (Morgan, 2015). In the past, estoppels could be used to make a representation on the existing contract only. However, after the ruling of the case on Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, it could be used to refer to the conduct in a contract and the expected contractual obligations. It, therefore, means that a promissory estoppel is given in a situation where a promise is made under certain conditions that will cause the other party to assume that the promi se will be fulfilled. Third, the party relying on the information given as a promise must suffer detriment to qualify for any damage. Fourth, it should be confirmed that the party that was given a promise did suffer some detriment and one he/she is in some mess. Finally, there is nothing that binds one from breaking the promise made earlier. Before an action can be taken, it must be surely be demonstrated that it is fair and just (Doris, M 2014). After clearly highlighting these elements, it is now clear that Bertin did not engage the landlord in determining what his statements meant instead of assuming and acting on the assumptions. Once the statements made can be interpreted in different ways, then it becomes very difficult for the court to determine if for real there existed an estoppels (Morgan, 2015). From the facts of the case, the remedy for Bertin could be found in the Competition and Consumer Act 2010(cth). The Act clarifies on the need to present the facts as they are so that the other party can enter into a contractual relationship. If the plaintiff feels that he was offended and he can seek further address, the Act can be invoked to determine whether the facts were genuine presentations under the common law and if there could be any statutory measures. The Act also prohibits individuals from conducting themselves in a way that is deceiving, and that can mislead someone. Representations according to the Australian Law are based on pre-contractual terms. In some cases, not all statements amount to promissory and therefore cannot be used as a basis for entering into contractual relationships. However, what is more, important and that is anchored in the Australian law, statements that may prove to be false, then the party to whom they were directed at stands to get remedies under the common law or even under the statute (Terry Giugni, 2009. In this case, the common law will hold that the contract was entered into because one party gave false information to induce the other to enter into the contract. If falsehood is established in this case, then Bertin can ask for remedies. In section 18 of the Australian Consumer Law, different remedies misleading conduct, are provided. Taking the case of Shepperd v The Council of the Municipality of Ryde (1952) 85 CLR 1, High Court of Australia, could help explain how a collateral contract can be formed and how the plaintiff can succeed in a case. This scena rio was between the Shepperd and The Council Municipality of Ryde. Shepperd who is the plaintiff, in this case, did purchase a house from the defendant, the Council Municipality. During the contract information, the buyer was informed by the seller that the land directly opposite was to be a park. To confirm the same, the plaintiff did request for the municipal plans and brochures. After just one year, the defendant decided to subdivide the land into two small portions. The action did force the plaintiff to go to court to get an injunction stopping the same. The council plan was a good proof of a collateral contract, the court held. It was the intention of the two parties to rely on the plans to verify the facts. After looking at the plan, the court held that the contract was in order and that plaintiff was right in requesting for orders to stop the dividing the land because that was part of the agreement. Based on this case, therefore, it is confirmed that Bertin has very slim chan ces of getting any remedies from the defendant (Stephenson, 2014). It could have been easier for him if he had some evidence or confirmation that the defendant did promise to do something and that they were in a collateral kind of relationship. Garland Collateral contract, promissory estoppel, and remedies The law provides that for any remedy to be given, one party must suffer a loss or damage because of the other party failing to perform his or her obligation (Morgan, 2015). In this case, Garland was the owner of the premises, and he is the one who gave the notice to terminate the tenancy relationship with Bertin. To start with, Garland has not suffered any loss. Instead he did gain from the refurbishment that was done by Bertini. He did give an indication that if the refurbishment was done to the expected standards; Bertin could be looked after at renewal time. Further, the representatives of the defendant also did comment that the refurbishment was to make the restaurant building meet the minimum standards of the other complexes around. It is these two statements that made the tenant positive about having his lease renewed after five years and went ahead to do the refurbishment. However, this did not happen. Six months to the end of the five-year contract, he did give notice to Bertin asking him to plan to vacate the premise at the end of the contract. Ideally, based on these findings from the case, it is the conduct that was bringing the contractual relationship to an end willingly. However, what could not be established in just common terms is what the landlord meant when he said that Bert in will be looked after at the renewal time." It is this statement that will subject him to the court to elaborate what the statement. This is because he will be required to explain what his statements mean. The tussle for Garland will be to proof to the court that there was no mischief to have the tenant refurbish the house on his behalf. The tenant did incur that expenditure because he was expectant that he would recover the cost from the proceedings of ten years. However, this never happened. The Australian law does prohibit the misrepresentation of facts with the intention of inducing someone to enter into what is considered a contractual obligation that cannot bind. Referring to the case of Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd, the Garland is likely to be subjected to court proceedings to prove his contractual relationship with the tenant. Depending on what perspective the court will look at the case, the defendant must provide factual information to convince the court that he did not mean harm with his statements. Looking at the example case, the Victorian Civil and Administrative Tribunal did rule for the complainant. It did maintain that since Crown had indicate d that it would look after the tenants at the renewal of the contract, was satisfactorily prove that he was going to renew the contract (Stephenson, 2014). Surprising this was never the case after Cosmopolitan had invested heavily in the repairs of the two houses. The Tribunal was convinced that conduct of the defendant informed the plaintiff decision and as such, they were entering a contractual relationship. To add to this, two judges, Gageler and Gordon separately did make judgments which held that appeal cases could have been dismissed and the complainant plea upheld. The judges did reaffirm that the conduct of Crown amounted to collateral contract and they did that four main steps. First, the statement itself was promissory because it was meant to show that the landlord will renew the tenancy agreement. Second, the statement was relied on as demonstrated by the delivering of the leases by the tenants after the promises had been made. Third, the collateral contract could go hand in hand with leases, and nothing was inconsistent. Finally, the collateral contract was genuine (Latimer, 2015). The conduct of the defendant was an offer to make an agreement, and there was no reason could decline it. In general, the conclusion was that even the ruling had been made, a collateral contract was present, and that was informed by various contract principles of representation of facts and fulfilling obligations. The promissory estoppel is a principle that is aimed at ensuring equity. It is from this perspective that the Australian law upholds the need to have regard to facts as they transpire (Avtar, 2008, DiMatteo, 1998 and Khoury Yamouni, 2010). It principally seeks to create a background for negotiation and give rise to the binding effect to the promises. Under the common law, the estoppel was intended to give rise to certain measures that could be used stop what could otherwise be considered obvious conflicts. Where such principle is properly applied, such liabilities that are considered obvious will be acquainted (Stephenson, 2014). Because of equity and fairness, it will be court subject to clear the conduct of Garland. In pre-contractual statements, sometimes it is difficult to classify some statements whether oral or written that have been made available before entering into a contract (Bacon, 2001, Dan, 2008, Poole, 2016 and Schwartz and Robert, 2010). For example, in the case of a buying desktop computer from the market, one party may be induced to buy a second-hand machine after being informed that it had only been used by one buyer previously. You could also be induced to buy because of the year it was manufactured. In some cases, such statements turn out to be false. But the question one could ask is, did they prompt one to enter into some contractual relationships? This gives to contractual breach because of misrepresentations which may lead to agreements with no remedies or have no consequence for failing to fulfill the promise (Ben-Shahar and Bernstein, 2000). In general, Garland will only be required to clarify his statements and if they were intended to Bertin. This is an important step that will determine if Bertin can qualify for any remedy. Conclusion This analysis has critically analyzed the case of Bertini Italian Restaurant vs Garland Properties Pty Ltd with particular reference to Australian commercial and contract laws. The specific concepts that have been considered in the discussion include collateral contract, promissory estoppels. After referring to the preceding cases and other contract law principles, it has been established a contractual relationship that arises from a given promise, can only bear remedies if they are clear, precise and unambiguous. Based on this, therefore, giving of unclear statements by the defendant is likely to make the contractual relationship non-consequential or not binding. A contractual and binding relationship must have a genuine promissory estoppel and collateral contract. In general, the analysis has established that the concepts of collateral contract and promissory estoppel provide solutions to issues considered obvious in a contractual relationship. However, the terms of applying these terms are not clear and as such parties do not use them even when they could be using them to address simple problems in the contracts. Based on the facts provided in the case and what the law provides, the following are the remedies for each of the party to the case: For Bertin to get any remedy, he must proof to the court that the statement by the defendant actually was an estoppels. Garland will also have to convince the court that he did not mean collateral contract when he said that, Bertin will be look at during the agreement renewal. Based on the cases of the same nature and that have been decided, the remedies will be given based on the facts presented and the arguments of each party. Finally, the analysis has a given a challenge to the enterprises of today in regard to entering into contractual relationship. 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