Estoppel by Convention in Broadlex Case

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In the Broadlex case, silence played a crucial role in establishing mutual intention. The court weighed heavily on the defendant's silence regarding emails and cleaning plans, leading to a judgment in favor of the plaintiff based on estoppel by convention. The existence of an express clause further supported the plaintiff's entitlement to additional payment.

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Presentation Transcript

Estoppel by convention? The Sound of Silence Broadlex Services Pty Ltd v RCR Resolve FM Pty Ltd Claire Schneider Wednesday 7 August 2019 Liability limited by a Scheme approved under professional standards legislation

>> Case background In the Broadlex case, there existed the complication that one of the aspects of conduct relied upon by Broadlex to establish the existence of the mutual intention was silence on the part of Resolve. Regular emails sent by Broadlex to Resolve submitted cleaning plans - some of these plans included quotations for the periodic cleaning services that were in dispute.

>> In considering the effect of these emails and cleaning plans, McDougall J placed significant weight on Resolve s silence in: Not taking issue with the emails or cleaning plans within incorporated these additional quotations; Controverting the assertion that could be derived from those cleaning plans that the periodic cleaning services were not to be performed as part of the routine cleaning services with the scope of the contract; and Not disputing or querying any of the invoices submitted by Broadlex.

>> As to this third factor, Mr Justice McDougall observed that the contract contained an express clause clause 7.3 which contained a detailed mechanism by which Resolve could challenge the accuracy of invoices submitted to it, and in doing so trigger a review process between the parties in relation to the disputed invoices.

>> Combined with the other facts, Mr Justice McDougall held that Broadlex s conduct in submitting these invoices and Resolve s failure to do anything to challenge the invoices despite having the contractual right to do so supported the inference that both parties were administering the contract on the basis that periodic cleaning services were not covered by the fixed contract price; and that Broadlex was entitled to additional payment for providing these services. Mr Justice McDougall therefore held that Broadlex was entitled to succeed on its estoppel by convention case.