Law Quarterly Review 2009 Quantum meruit, estoppel, and the primacy of contract Joshua Getzler Subject: Contracts. Other related subjects: Restitution Keywords: Australia; Construction contracts; Estoppel; Planning permission; Proprietary estoppel; Quantum meruit; Restitution; Unjust enrichment *L.Q.R. 196 IN decisions delivered just over a month apart, the House of Lords and the High Court of Australia grappled with the correct use of equitable and restitutionary doctrines augmenting the operation of contract law in commercial relationships. In Yeoman's Row Management Ltd v Cobbe [2008] UKHL 55; [2008] 1 W.L.R. 1752 the House of Lords held that there could be no route to a remedy protecting expectations or reliance via proprietary estoppel in a case where a rather nebulous agreement failed to materialise into a contract; a quantum meruit award was instead granted to cover the cost of pre-contractual services. The High Court of Australia in Lumbers v W Cook Builders Pty Ltd (in liquidation) [2008] HCA 27; (2008) 232 C.L.R. 635 HC (Aus) held that common-law unjust enrichment claims should not be allowed to change the obligations and assumptions of risk brokered within contractual relationships. The results of these appeals, each reversing decisions of lower courts, were unexceptional, but the reasoning offered consciously narrowed the operation of equitable estoppel in England and unjust enrichment doctrine in Australia. The cases covered dissimilar doctrinal territory, but their comparison usefully demonstrates different approaches to unjust enrichment within the common law world. Proprietary estoppel and quantum meruit in the House of Lords Cobbe, an experienced property developer, was asked to assist Yeoman's, a private company, to develop a site owned by Yeoman's. Cobbe was to pursue the necessary planning permission at his own expense, and if this was successful the company agreed in principle to sell the land to Cobbe who would build on the site. Then, if the gross resale value exceeded twice the initial sale price, Cobbe would share with Yeoman's half of that excess as further profit. Cobbe thus agreed at the outset to bear the risk of laying out money and effort in pursuit of a planning permission that might not be granted, or that even if he won permission and developed the site, his net return might not meet all his development costs. The parties did not discuss when the various stages of work, payment and delivery of vacant possession would be performed and what security would be given for due performance; all of that was left to the future. Yeoman's encouraged and assisted Cobbe's efforts to win planning permission over a two-year period and further encouraged Cobbe to believe that a formal contract of sale filling in the missing performance details would be settled between them as soon as the application was successful. Cobbe seemed to believe that the agreement was binding in honour from the outset, and that in any case he would be paid for his pre-contractual work should Yeoman's not carry through with the project. Yeoman's took a different, perhaps more cynical view, deciding to offer *L.Q.R. 197 Cobbe less advantageous terms later down the line should development go ahead, whilst continuing to encourage Cobbe's outlays on the planning application. When the planning application was successful, Yeoman's offered Cobbe a contract sharply reducing his profit share. Cobbe insisted that a contract be concluded on the prior agreed basis. Yeoman's responded by breaking off the deal, taking the full benefit of the planning permission without paying Cobbe anything for his work, and excluding him from the development enterprise he had predicated that work upon. At trial Etherton J. held that Yeoman's had acted unconscionably in encouraging Cobbe's reliance on a forthcoming contract to acquire land, and was therefore estopped from denying Cobbe an interest in the land. The minimum equity required to do justice could be measured by Cobbe's reasonable expectations, amounting to an equal share in the uplift in the value of the property engendered by Cobbe's work to date. In the Court of Appeal Cobbe won again, but the ratio of the case was possibly expanded; Mummery L.J. suggested that the estoppel remedy coincided with a constructive trust of profits, arising where one member of a joint venture unconscionably undermines the expectations of another venturer who has relied on a sharing arrangement ([2006] EWCA Civ 1139; [2006] 1 W.L.R. Page1