Shepperd v The Council of the Municipality of Ryde
(1952) 85 CLR 1, High Court of Australia
Plaintiff purchased house from defendant. During pre-contractual discussions P was told (by reference to plans/brochures) that the land opposite the house would become a park. P made clear to D how important this was to them. A year after contractual completion D decided instead to sub-divide the land. P sought an injunction to stop them using the land from anything other than a park.
The assurances in the council plan and brochure gave rise to a collateral contract between the parties. It was their intention that P should rely on these documents and he had done so. The reluctance of the courts to find a collateral contract where a statement in question could have been included in the main contract was displaced here because it was not unnatural for the parties to treat the contract as devoted only to the purchase of the land. The plaintiff's action succeeded.