ON 5 SEPTEMBER 1990, the High Court of Australia delivered Commonwealth v Verwayen (“Voyager case”) [1990] HCA 39; (1990) 170 CLR 394 (5 September 1990).

Estoppel – Waiver – Action against Commonwealth by serviceman injured in collision between Australian naval vessels engaged in combat exercises – Defence – Failure to plead expiration of limitation period or absence of duty of care – Statements by Commonwealth that it would not rely on either defence – Subsequent amendment of defence to plead both grounds – Whether Commonwealth estopped from relying on defences – Whether defenced waived – Limitation of Actions Act 1958 (Vict.), s. 5(6).

In 1964, the Australian Navy ships Melbourne and Voyager collided whilst performing exercises off Jervis Bay. Hundreds of servicemen were injured and 82 died.

Verwayen was one of the many servicemen who claimed damages for personal injury against the Commonwealth. His action was brought many years after the limitation period expired.

Verwayen’s solicitor acted for a number of servicemen. In another claim, the solicitor was assured in writing by the solicitor for the Commonwealth and the Minister of Defence that the Commonwealth would not be invoking the limitation defence. In other words, the Commonwealth would not be defending the case on the basis that the proceedings were barred because they were commenced after the expiry of the three year time limit.

The solicitor sought the same assurances from the Commonwealth before commencing Verwayen’s proceedings.  The assurances were subsequently given after the proecceings were issued and the Commonwealth filed a defence pleading that the Commonwealth did not owe a duty of care because the harm occurred in combat exercises. The Commonwealth did not plead the limitation defence.

About 18 months after the proceedings were issued and 14 months after the defence was filed, the Commonwealth filed an amended defence pleading the limitation defence.

By a majority of 4:3, the High Court held that the Commonwealth could not plead the limitation defence.

Deane and Dawson JJ held that the appeal be dismissed applying the principle of estoppel by conduct. Both inferred that Mr Verwayen had prepared and prosecuted his action in reliance upon the representations made by the Commonwealth. The Commonwealth’s conduct raised an equity that could only be accounted for by holding it to the assumed state of affairs.

Toohey and Gaudron JJ held that the appeal be dismissed because the Commonwealth had waived its right to rely upon the defence.

Mason CJ, Brennan, Deane, Dawson and McHugh JJ were of the view that reliance upon a representation was fundamental to the establishment of an estoppel, but only Deane and Dawson JJ held that an estoppel could be applied in this case.

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